Third Substitute H.B. 24
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7 LONG TITLE
8 General Description:
9 This bill modifies Title 31A, Insurance Code, and other related provisions, to address
10 the regulation of insurance.
11 Highlighted Provisions:
12 This bill:
13 . amends definition provisions;
14 . provides for insurance fraud investigators being designated as law enforcement
15 officers;
16 . changes the date captive insurance companies are to pay a fee;
17 . addresses what constitutes a qualified insurer;
18 . modifies requirements for plan of orderly withdrawal from writing a line of
19 insurance;
20 . addresses notice requirements related to a request for a hearing;
21 . modifies calculations related to interest payable on life insurance proceeds;
22 . addresses uninsured and underinsured motorist coverage;
23 . addresses preferred provider contract provisions;
24 . addresses coverage of mental health and substance use disorders;
25 . modifies requirements for the uniform application form and the uniform waiver of
26 coverage form;
27 . amends language regarding the health benefit plan on the Health Insurance
28 Exchange;
29 . amends language regarding open enrollment provisions;
30 . modifies language regarding dental and vision policies being offered on the Health
31 Insurance Exchange;
32 . clarifies language related to the designated responsible licensed individual;
33 . clarifies references to the Violent Crime Control and Law Enforcement Act;
34 . modifies references to state of residence to home state;
35 . addresses requirements related to licensing when a person establishes legal
36 residence in the state;
37 . changes requirements related to the commissioner placing a licensee on probation;
38 . repeals language related to a voluntarily surrendered license that is reinstated upon
39 completion of continuing education requirements;
40 . modifies certain exemptions from continuing education requirements;
41 . clarifies training period requirements;
42 . changes a navigator license term to one year;
43 . provides for training periods for a navigator license;
44 . modifies continuing education requirements for a navigator;
45 . repeals the requirement that the commissioner publish a list of professional
46 designations whose continuing education requirements could be used for certain
47 circumstances related to navigators;
48 . modifies provisions related to inducements;
49 . addresses license compensation provisions;
50 . makes navigator licensees subject to unfair marketing practice restrictions;
51 . amends definitions specific to insurance adjusters' chapter;
52 . exempts an applicant for the crop insurance license class from certain requirements;
53 . modifies the definition of receiver;
54 . addresses the provisions related to the receivership court's seizure order;
55 . amends the purpose statement, definition, and applicability and scope provisions for
56 the Individual, Small Employer, and Group Health Insurance Act;
57 . addresses the surcharge for groups changing carriers;
58 . addresses eligibility for the small employer and individual market;
59 . modifies the provisions related to appointment of insurance producers and the
60 Health Insurance Exchange;
61 . modifies Health Insurance Exchange disclosure requirements;
62 . requires a captive insurance company, rather than an association captive insurance
63 company or industrial insured group, to file a specified report;
64 . corrects a reference to a covered employee;
65 . changes reference to a multiple coordinated policy to a master policy;
66 . includes reference to the defined contribution arrangement market into the Defined
67 Contribution Risk Adjuster Act;
68 . modifies definitions in the Small Employer Stop-Loss Insurance Act;
69 . addresses stop-loss insurance coverage standards, stop-loss restrictions, filing
70 requirements, and stop-loss insurance disclosure;
71 . modifies commissioner's rulemaking authority under the Small Employer Stop-Loss
72 Insurance Act; and
73 . makes technical and conforming amendments.
74 Money Appropriated in this Bill:
75 None
76 Other Special Clauses:
77 This bill provides an effective date.
78 This bill provides revisor instructions.
79 Utah Code Sections Affected:
80 AMENDS:
81 31A-1-301 , as last amended by Laws of Utah 2013, Chapter 319
82 31A-2-104 , as last amended by Laws of Utah 1999, Chapter 21
83 31A-3-304 (Superseded 07/01/15), as last amended by Laws of Utah 2011, Chapter
84 284
85 31A-3-304 (Effective 07/01/15), as last amended by Laws of Utah 2013, Chapter 319
86 31A-4-102 , as last amended by Laws of Utah 2008, Chapter 345
87 31A-4-115 , as last amended by Laws of Utah 2002, Chapter 308
88 31A-8-402.3 , as last amended by Laws of Utah 2004, Chapter 329
89 31A-16-103 , as last amended by Laws of Utah 2004, Chapter 2
90 31A-17-607 , as last amended by Laws of Utah 2001, Chapter 116
91 31A-22-305 , as last amended by Laws of Utah 2013, Chapter 460
92 31A-22-305.3 , as last amended by Laws of Utah 2013, Chapter 460
93 31A-22-428 , as enacted by Laws of Utah 2008, Chapter 345
94 31A-22-617 , as last amended by Laws of Utah 2013, Chapters 104 and 319
95 31A-22-618.5 , as last amended by Laws of Utah 2013, Chapter 319
96 31A-22-625 , as last amended by Laws of Utah 2012, Chapter 253
97 31A-22-635 , as last amended by Laws of Utah 2012, Chapters 253 and 279
98 31A-22-721 , as last amended by Laws of Utah 2011, Chapter 284
99 31A-23a-102 , as last amended by Laws of Utah 2013, Chapter 319
100 31A-23a-104 , as last amended by Laws of Utah 2012, Chapter 253
101 31A-23a-105 , as last amended by Laws of Utah 2013, Chapter 319
102 31A-23a-108 , as last amended by Laws of Utah 2012, Chapter 253
103 31A-23a-112 , as last amended by Laws of Utah 2008, Chapter 382
104 31A-23a-113 , as last amended by Laws of Utah 2012, Chapter 253
105 31A-23a-202 , as last amended by Laws of Utah 2013, Chapter 319
106 31A-23a-203 , as last amended by Laws of Utah 2012, Chapter 253
107 31A-23a-402.5 , as last amended by Laws of Utah 2013, Chapter 319
108 31A-23a-501 , as last amended by Laws of Utah 2013, Chapter 341
109 31A-23b-102 , as enacted by Laws of Utah 2013, Chapter 341
110 31A-23b-202 , as enacted by Laws of Utah 2013, Chapter 341
111 31A-23b-205 , as enacted by Laws of Utah 2013, Chapter 341
112 31A-23b-206 , as enacted by Laws of Utah 2013, Chapter 341
113 31A-23b-301 , as enacted by Laws of Utah 2013, Chapter 341
114 31A-23b-402 , as enacted by Laws of Utah 2013, Chapter 341
115 31A-25-208 , as last amended by Laws of Utah 2011, Chapter 284
116 31A-25-209 , as last amended by Laws of Utah 2008, Chapter 382
117 31A-26-102 , as last amended by Laws of Utah 2012, Chapter 151
118 31A-26-206 , as last amended by Laws of Utah 2011, Chapter 284
119 31A-26-207 , as last amended by Laws of Utah 2001, Chapter 116
120 31A-26-213 , as last amended by Laws of Utah 2011, Chapter 284
121 31A-26-214 , as last amended by Laws of Utah 2008, Chapter 382
122 31A-26-214.5 , as last amended by Laws of Utah 2009, Chapter 349
123 31A-27a-102 , as last amended by Laws of Utah 2008, Chapter 382
124 31A-27a-107 , as enacted by Laws of Utah 2007, Chapter 309
125 31A-27a-201 , as enacted by Laws of Utah 2007, Chapter 309
126 31A-27a-701 , as last amended by Laws of Utah 2011, Chapter 297
127 31A-29-106 , as last amended by Laws of Utah 2013, Chapter 319
128 31A-29-111 , as last amended by Laws of Utah 2012, Chapters 158 and 347
129 31A-29-115 , as last amended by Laws of Utah 2004, Chapter 2
130 31A-30-102 , as last amended by Laws of Utah 2009, Chapter 12
131 31A-30-103 , as last amended by Laws of Utah 2013, Chapter 168
132 31A-30-104 , as last amended by Laws of Utah 2013, Chapters 168 and 341
133 31A-30-106 , as last amended by Laws of Utah 2011, Chapter 284
134 31A-30-106.7 , as last amended by Laws of Utah 2008, Chapter 382
135 31A-30-107 , as last amended by Laws of Utah 2009, Chapter 12
136 31A-30-108 , as last amended by Laws of Utah 2011, Chapter 284
137 31A-30-207 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
138 31A-30-209 , as last amended by Laws of Utah 2011, Chapter 400
139 31A-30-211 , as last amended by Laws of Utah 2011, Second Special Session, Chapter 5
140 31A-37-501 , as last amended by Laws of Utah 2008, Chapter 302
141 31A-40-203 , as enacted by Laws of Utah 2008, Chapter 318
142 31A-40-209 , as enacted by Laws of Utah 2008, Chapter 318
143 31A-42-202 , as last amended by Laws of Utah 2011, Chapter 400
144 31A-43-102 , as enacted by Laws of Utah 2013, Chapter 341
145 31A-43-301 , as enacted by Laws of Utah 2013, Chapter 341
146 31A-43-302 , as enacted by Laws of Utah 2013, Chapter 341
147 31A-43-303 , as enacted by Laws of Utah 2013, Chapter 341
148 31A-43-304 , as enacted by Laws of Utah 2013, Chapter 341
149 53-13-103 , as last amended by Laws of Utah 2011, Chapter 58
150 REPEALS:
151 31A-30-110 , as last amended by Laws of Utah 2011, Chapters 284 and 297
152 31A-30-111 , as last amended by Laws of Utah 2002, Chapter 308
153 Utah Code Sections Affected by Revisor Instructions:
154 31A-22-305 , as last amended by Laws of Utah 2013, Chapter 460
155 31A-22-305.3 , as last amended by Laws of Utah 2013, Chapter 460
156
157 Be it enacted by the Legislature of the state of Utah:
158 Section 1. Section 31A-1-301 is amended to read:
159 31A-1-301. Definitions.
160 As used in this title, unless otherwise specified:
161 (1) (a) "Accident and health insurance" means insurance to provide protection against
162 economic losses resulting from:
163 (i) a medical condition including:
164 (A) a medical care expense; or
165 (B) the risk of disability;
166 (ii) accident; or
167 (iii) sickness.
168 (b) "Accident and health insurance":
169 (i) includes a contract with disability contingencies including:
170 (A) an income replacement contract;
171 (B) a health care contract;
172 (C) an expense reimbursement contract;
173 (D) a credit accident and health contract;
174 (E) a continuing care contract; and
175 (F) a long-term care contract; and
176 (ii) may provide:
177 (A) hospital coverage;
178 (B) surgical coverage;
179 (C) medical coverage;
180 (D) loss of income coverage;
181 (E) prescription drug coverage;
182 (F) dental coverage; or
183 (G) vision coverage.
184 (c) "Accident and health insurance" does not include workers' compensation insurance.
185 (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
186 63G, Chapter 3, Utah Administrative Rulemaking Act.
187 (3) "Administrator" is defined in Subsection [
188 (4) "Adult" means an individual who has attained the age of at least 18 years.
189 (5) "Affiliate" means a person who controls, is controlled by, or is under common
190 control with, another person. A corporation is an affiliate of another corporation, regardless of
191 ownership, if substantially the same group of individuals manage the corporations.
192 (6) "Agency" means:
193 (a) a person other than an individual, including a sole proprietorship by which an
194 individual does business under an assumed name; and
195 (b) an insurance organization licensed or required to be licensed under Section
196 31A-23a-301 , 31A-25-207 , or 31A-26-209 .
197 (7) "Alien insurer" means an insurer domiciled outside the United States.
198 (8) "Amendment" means an endorsement to an insurance policy or certificate.
199 (9) "Annuity" means an agreement to make periodical payments for a period certain or
200 over the lifetime of one or more individuals if the making or continuance of all or some of the
201 series of the payments, or the amount of the payment, is dependent upon the continuance of
202 human life.
203 (10) "Application" means a document:
204 (a) (i) completed by an applicant to provide information about the risk to be insured;
205 and
206 (ii) that contains information that is used by the insurer to evaluate risk and decide
207 whether to:
208 (A) insure the risk under:
209 (I) the coverage as originally offered; or
210 (II) a modification of the coverage as originally offered; or
211 (B) decline to insure the risk; or
212 (b) used by the insurer to gather information from the applicant before issuance of an
213 annuity contract.
214 (11) "Articles" or "articles of incorporation" means:
215 (a) the original articles;
216 (b) a special law;
217 (c) a charter;
218 (d) an amendment;
219 (e) restated articles;
220 (f) articles of merger or consolidation;
221 (g) a trust instrument;
222 (h) another constitutive document for a trust or other entity that is not a corporation;
223 and
224 (i) an amendment to an item listed in Subsections (11)(a) through (h).
225 (12) "Bail bond insurance" means a guarantee that a person will attend court when
226 required, up to and including surrender of the person in execution of a sentence imposed under
227 Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
228 (13) "Binder" is defined in Section 31A-21-102 .
229 (14) "Blanket insurance policy" means a group policy covering a defined class of
230 persons:
231 (a) without individual underwriting or application; and
232 (b) that is determined by definition without designating each person covered.
233 (15) "Board," "board of trustees," or "board of directors" means the group of persons
234 with responsibility over, or management of, a corporation, however designated.
235 (16) "Bona fide office" means a physical office in this state:
236 (a) that is open to the public;
237 (b) that is staffed during regular business hours on regular business days; and
238 (c) at which the public may appear in person to obtain services.
239 (17) "Business entity" means:
240 (a) a corporation;
241 (b) an association;
242 (c) a partnership;
243 (d) a limited liability company;
244 (e) a limited liability partnership; or
245 (f) another legal entity.
246 (18) "Business of insurance" is defined in Subsection (88).
247 (19) "Business plan" means the information required to be supplied to the
248 commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
249 when these subsections apply by reference under:
250 (a) Section 31A-7-201 ;
251 (b) Section 31A-8-205 ; or
252 (c) Subsection 31A-9-205 (2).
253 (20) (a) "Bylaws" means the rules adopted for the regulation or management of a
254 corporation's affairs, however designated.
255 (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
256 corporation.
257 (21) "Captive insurance company" means:
258 (a) an insurer:
259 (i) owned by another organization; and
260 (ii) whose exclusive purpose is to insure risks of the parent organization and an
261 affiliated company; or
262 (b) in the case of a group or association, an insurer:
263 (i) owned by the insureds; and
264 (ii) whose exclusive purpose is to insure risks of:
265 (A) a member organization;
266 (B) a group member; or
267 (C) an affiliate of:
268 (I) a member organization; or
269 (II) a group member.
270 (22) "Casualty insurance" means liability insurance.
271 (23) "Certificate" means evidence of insurance given to:
272 (a) an insured under a group insurance policy; or
273 (b) a third party.
274 (24) "Certificate of authority" is included within the term "license."
275 (25) "Claim," unless the context otherwise requires, means a request or demand on an
276 insurer for payment of a benefit according to the terms of an insurance policy.
277 (26) "Claims-made coverage" means an insurance contract or provision limiting
278 coverage under a policy insuring against legal liability to claims that are first made against the
279 insured while the policy is in force.
280 (27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
281 commissioner.
282 (b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent
283 supervisory official of another jurisdiction.
284 (28) (a) "Continuing care insurance" means insurance that:
285 (i) provides board and lodging;
286 (ii) provides one or more of the following:
287 (A) a personal service;
288 (B) a nursing service;
289 (C) a medical service; or
290 (D) any other health-related service; and
291 (iii) provides the coverage described in this Subsection (28)(a) under an agreement
292 effective:
293 (A) for the life of the insured; or
294 (B) for a period in excess of one year.
295 (b) Insurance is continuing care insurance regardless of whether or not the board and
296 lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
297 (29) (a) "Control," "controlling," "controlled," or "under common control" means the
298 direct or indirect possession of the power to direct or cause the direction of the management
299 and policies of a person. This control may be:
300 (i) by contract;
301 (ii) by common management;
302 (iii) through the ownership of voting securities; or
303 (iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
304 (b) There is no presumption that an individual holding an official position with another
305 person controls that person solely by reason of the position.
306 (c) A person having a contract or arrangement giving control is considered to have
307 control despite the illegality or invalidity of the contract or arrangement.
308 (d) There is a rebuttable presumption of control in a person who directly or indirectly
309 owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
310 voting securities of another person.
311 (30) "Controlled insurer" means a licensed insurer that is either directly or indirectly
312 controlled by a producer.
313 (31) "Controlling person" means a person that directly or indirectly has the power to
314 direct or cause to be directed, the management, control, or activities of a reinsurance
315 intermediary.
316 (32) "Controlling producer" means a producer who directly or indirectly controls an
317 insurer.
318 (33) (a) "Corporation" means an insurance corporation, except when referring to:
319 (i) a corporation doing business:
320 (A) as:
321 (I) an insurance producer;
322 (II) a surplus lines producer;
323 (III) a limited line producer;
324 (IV) a consultant;
325 (V) a managing general agent;
326 (VI) a reinsurance intermediary;
327 (VII) a third party administrator; or
328 (VIII) an adjuster; and
329 (B) under:
330 (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
331 Reinsurance Intermediaries;
332 (II) Chapter 25, Third Party Administrators; or
333 (III) Chapter 26, Insurance Adjusters; or
334 (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
335 Holding Companies.
336 (b) "Stock corporation" means a stock insurance corporation.
337 (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
338 (34) (a) "Creditable coverage" has the same meaning as provided in federal regulations
339 adopted pursuant to the Health Insurance Portability and Accountability Act.
340 (b) "Creditable coverage" includes coverage that is offered through a public health plan
341 such as:
342 (i) the Primary Care Network Program under a Medicaid primary care network
343 demonstration waiver obtained subject to Section 26-18-3 ;
344 (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
345 (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
346 101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.
347 (35) "Credit accident and health insurance" means insurance on a debtor to provide
348 indemnity for payments coming due on a specific loan or other credit transaction while the
349 debtor has a disability.
350 (36) (a) "Credit insurance" means insurance offered in connection with an extension of
351 credit that is limited to partially or wholly extinguishing that credit obligation.
352 (b) "Credit insurance" includes:
353 (i) credit accident and health insurance;
354 (ii) credit life insurance;
355 (iii) credit property insurance;
356 (iv) credit unemployment insurance;
357 (v) guaranteed automobile protection insurance;
358 (vi) involuntary unemployment insurance;
359 (vii) mortgage accident and health insurance;
360 (viii) mortgage guaranty insurance; and
361 (ix) mortgage life insurance.
362 (37) "Credit life insurance" means insurance on the life of a debtor in connection with
363 an extension of credit that pays a person if the debtor dies.
364 (38) "Credit property insurance" means insurance:
365 (a) offered in connection with an extension of credit; and
366 (b) that protects the property until the debt is paid.
367 (39) "Credit unemployment insurance" means insurance:
368 (a) offered in connection with an extension of credit; and
369 (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
370 (i) specific loan; or
371 (ii) credit transaction.
372 (40) "Creditor" means a person, including an insured, having a claim, whether:
373 (a) matured;
374 (b) unmatured;
375 (c) liquidated;
376 (d) unliquidated;
377 (e) secured;
378 (f) unsecured;
379 (g) absolute;
380 (h) fixed; or
381 (i) contingent.
382 (41) (a) "Crop insurance" means insurance providing protection against damage to
383 crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation,
384 disease, or other yield-reducing conditions or perils that is:
385 (i) provided by the private insurance market; or
386 (ii) subsidized by the Federal Crop Insurance Corporation.
387 (b) "Crop insurance" includes multiperil crop insurance.
388 (42) (a) "Customer service representative" means a person that provides an insurance
389 service and insurance product information:
390 (i) for the customer service representative's:
391 (A) producer;
392 (B) surplus lines producer; or
393 (C) consultant employer; and
394 (ii) to the customer service representative's employer's:
395 (A) customer;
396 (B) client; or
397 (C) organization.
398 (b) A customer service representative may only operate within the scope of authority of
399 the customer service representative's producer, surplus lines producer, or consultant employer.
400 (43) "Deadline" means a final date or time:
401 (a) imposed by:
402 (i) statute;
403 (ii) rule; or
404 (iii) order; and
405 (b) by which a required filing or payment must be received by the department.
406 (44) "Deemer clause" means a provision under this title under which upon the
407 occurrence of a condition precedent, the commissioner is considered to have taken a specific
408 action. If the statute so provides, a condition precedent may be the commissioner's failure to
409 take a specific action.
410 (45) "Degree of relationship" means the number of steps between two persons
411 determined by counting the generations separating one person from a common ancestor and
412 then counting the generations to the other person.
413 (46) "Department" means the Insurance Department.
414 (47) "Director" means a member of the board of directors of a corporation.
415 (48) "Disability" means a physiological or psychological condition that partially or
416 totally limits an individual's ability to:
417 (a) perform the duties of:
418 (i) that individual's occupation; or
419 (ii) [
420 training, or experience; or
421 (b) perform two or more of the following basic activities of daily living:
422 (i) eating;
423 (ii) toileting;
424 (iii) transferring;
425 (iv) bathing; or
426 (v) dressing.
427 (49) "Disability income insurance" is defined in Subsection (79).
428 (50) "Domestic insurer" means an insurer organized under the laws of this state.
429 (51) "Domiciliary state" means the state in which an insurer:
430 (a) is incorporated;
431 (b) is organized; or
432 (c) in the case of an alien insurer, enters into the United States.
433 (52) (a) "Eligible employee" means:
434 (i) an employee who:
435 (A) works on a full-time basis; and
436 (B) has a normal work week of 30 or more hours; or
437 (ii) a person described in Subsection (52)(b).
438 (b) "Eligible employee" includes, if the individual is included under a health benefit
439 plan of a small employer:
440 (i) a sole proprietor;
441 (ii) a partner in a partnership; or
442 (iii) an independent contractor.
443 (c) "Eligible employee" does not include, unless eligible under Subsection (52)(b):
444 (i) an individual who works on a temporary or substitute basis for a small employer;
445 (ii) an employer's spouse; or
446 (iii) a dependent of an employer.
447 (53) "Employee" means an individual employed by an employer.
448 (54) "Employee benefits" means one or more benefits or services provided to:
449 (a) an employee; or
450 (b) a dependent of an employee.
451 (55) (a) "Employee welfare fund" means a fund:
452 (i) established or maintained, whether directly or through a trustee, by:
453 (A) one or more employers;
454 (B) one or more labor organizations; or
455 (C) a combination of employers and labor organizations; and
456 (ii) that provides employee benefits paid or contracted to be paid, other than income
457 from investments of the fund:
458 (A) by or on behalf of an employer doing business in this state; or
459 (B) for the benefit of a person employed in this state.
460 (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
461 revenues.
462 (56) "Endorsement" means a written agreement attached to a policy or certificate to
463 modify the policy or certificate coverage.
464 (57) "Enrollment date," with respect to a health benefit plan, means:
465 (a) the first day of coverage; or
466 (b) if there is a waiting period, the first day of the waiting period.
467 (58) (a) "Escrow" means:
468 (i) a transaction that effects the sale, transfer, encumbering, or leasing of real property,
469 when a person not a party to the transaction, and neither having nor acquiring an interest in the
470 title, performs, in accordance with the written instructions or terms of the written agreement
471 between the parties to the transaction, any of the following actions:
472 (A) the explanation, holding, or creation of a document; or
473 (B) the receipt, deposit, and disbursement of money;
474 (ii) a settlement or closing involving:
475 (A) a mobile home;
476 (B) a grazing right;
477 (C) a water right; or
478 (D) other personal property authorized by the commissioner.
479 (b) "Escrow" does not include:
480 (i) the following notarial acts performed by a notary within the state:
481 (A) an acknowledgment;
482 (B) a copy certification;
483 (C) jurat; and
484 (D) an oath or affirmation;
485 (ii) the receipt or delivery of a document; or
486 (iii) the receipt of money for delivery to the escrow agent.
487 (59) "Escrow agent" means an agency title insurance producer meeting the
488 requirements of Sections 31A-4-107 , 31A-14-211 , and 31A-23a-204 , who is acting through an
489 individual title insurance producer licensed with an escrow subline of authority.
490 (60) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
491 excluded.
492 (b) The items listed in a list using the term "excludes" are representative examples for
493 use in interpretation of this title.
494 (61) "Exclusion" means for the purposes of accident and health insurance that an
495 insurer does not provide insurance coverage, for whatever reason, for one of the following:
496 (a) a specific physical condition;
497 (b) a specific medical procedure;
498 (c) a specific disease or disorder; or
499 (d) a specific prescription drug or class of prescription drugs.
500 (62) "Expense reimbursement insurance" means insurance:
501 (a) written to provide a payment for an expense relating to hospital confinement
502 resulting from illness or injury; and
503 (b) written:
504 (i) as a daily limit for a specific number of days in a hospital; and
505 (ii) to have a one or two day waiting period following a hospitalization.
506 (63) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
507 a position of public or private trust.
508 (64) (a) "Filed" means that a filing is:
509 (i) submitted to the department as required by and in accordance with applicable
510 statute, rule, or filing order;
511 (ii) received by the department within the time period provided in applicable statute,
512 rule, or filing order; and
513 (iii) accompanied by the appropriate fee in accordance with:
514 (A) Section 31A-3-103 ; or
515 (B) rule.
516 (b) "Filed" does not include a filing that is rejected by the department because it is not
517 submitted in accordance with Subsection (64)(a).
518 (65) "Filing," when used as a noun, means an item required to be filed with the
519 department including:
520 (a) a policy;
521 (b) a rate;
522 (c) a form;
523 (d) a document;
524 (e) a plan;
525 (f) a manual;
526 (g) an application;
527 (h) a report;
528 (i) a certificate;
529 (j) an endorsement;
530 (k) an actuarial certification;
531 (l) a licensee annual statement;
532 (m) a licensee renewal application;
533 (n) an advertisement; or
534 (o) an outline of coverage.
535 (66) "First party insurance" means an insurance policy or contract in which the insurer
536 agrees to pay a claim submitted to it by the insured for the insured's losses.
537 (67) "Foreign insurer" means an insurer domiciled outside of this state, including an
538 alien insurer.
539 (68) (a) "Form" means one of the following prepared for general use:
540 (i) a policy;
541 (ii) a certificate;
542 (iii) an application;
543 (iv) an outline of coverage; or
544 (v) an endorsement.
545 (b) "Form" does not include a document specially prepared for use in an individual
546 case.
547 (69) "Franchise insurance" means an individual insurance policy provided through a
548 mass marketing arrangement involving a defined class of persons related in some way other
549 than through the purchase of insurance.
550 (70) "General lines of authority" include:
551 (a) the general lines of insurance in Subsection (71);
552 (b) title insurance under one of the following sublines of authority:
553 (i) search, including authority to act as a title marketing representative;
554 (ii) escrow, including authority to act as a title marketing representative; and
555 (iii) title marketing representative only;
556 (c) surplus lines;
557 (d) workers' compensation; and
558 (e) [
559 recognize in the public interest.
560 (71) "General lines of insurance" include:
561 (a) accident and health;
562 (b) casualty;
563 (c) life;
564 (d) personal lines;
565 (e) property; and
566 (f) variable contracts, including variable life and annuity.
567 (72) "Group health plan" means an employee welfare benefit plan to the extent that the
568 plan provides medical care:
569 (a) (i) to an employee; or
570 (ii) to a dependent of an employee; and
571 (b) (i) directly;
572 (ii) through insurance reimbursement; or
573 (iii) through another method.
574 (73) (a) "Group insurance policy" means a policy covering a group of persons that is
575 issued:
576 (i) to a policyholder on behalf of the group; and
577 (ii) for the benefit of a member of the group who is selected under a procedure defined
578 in:
579 (A) the policy; or
580 (B) an agreement that is collateral to the policy.
581 (b) A group insurance policy may include a member of the policyholder's family or a
582 dependent.
583 (74) "Guaranteed automobile protection insurance" means insurance offered in
584 connection with an extension of credit that pays the difference in amount between the
585 insurance settlement and the balance of the loan if the insured automobile is a total loss.
586 (75) (a) Except as provided in Subsection (75)(b), "health benefit plan" means a policy
587 or certificate that:
588 (i) provides health care insurance;
589 (ii) provides major medical expense insurance; or
590 (iii) is offered as a substitute for hospital or medical expense insurance, such as:
591 (A) a hospital confinement indemnity; or
592 (B) a limited benefit plan.
593 (b) "Health benefit plan" does not include a policy or certificate that:
594 (i) provides benefits solely for:
595 (A) accident;
596 (B) dental;
597 (C) income replacement;
598 (D) long-term care;
599 (E) a Medicare supplement;
600 (F) a specified disease;
601 (G) vision; or
602 (H) a short-term limited duration; or
603 (ii) is offered and marketed as supplemental health insurance.
604 (76) "Health care" means any of the following intended for use in the diagnosis,
605 treatment, mitigation, or prevention of a human ailment or impairment:
606 (a) a professional service;
607 (b) a personal service;
608 (c) a facility;
609 (d) equipment;
610 (e) a device;
611 (f) supplies; or
612 (g) medicine.
613 (77) (a) "Health care insurance" or "health insurance" means insurance providing:
614 (i) a health care benefit; or
615 (ii) payment of an incurred health care expense.
616 (b) "Health care insurance" or "health insurance" does not include accident and health
617 insurance providing a benefit for:
618 (i) replacement of income;
619 (ii) short-term accident;
620 (iii) fixed indemnity;
621 (iv) credit accident and health;
622 (v) supplements to liability;
623 (vi) workers' compensation;
624 (vii) automobile medical payment;
625 (viii) no-fault automobile;
626 (ix) equivalent self-insurance; or
627 (x) a type of accident and health insurance coverage that is a part of or attached to
628 another type of policy.
629 (78) "Health Insurance Portability and Accountability Act" means the Health Insurance
630 Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended.
631 (79) "Income replacement insurance" or "disability income insurance" means insurance
632 written to provide payments to replace income lost from accident or sickness.
633 (80) "Indemnity" means the payment of an amount to offset all or part of an insured
634 loss.
635 (81) "Independent adjuster" means an insurance adjuster required to be licensed under
636 Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
637 (82) "Independently procured insurance" means insurance procured under Section
638 31A-15-104 .
639 (83) "Individual" means a natural person.
640 (84) "Inland marine insurance" includes insurance covering:
641 (a) property in transit on or over land;
642 (b) property in transit over water by means other than boat or ship;
643 (c) bailee liability;
644 (d) fixed transportation property such as bridges, electric transmission systems, radio
645 and television transmission towers and tunnels; and
646 (e) personal and commercial property floaters.
647 (85) "Insolvency" means that:
648 (a) an insurer is unable to pay its debts or meet its obligations as the debts and
649 obligations mature;
650 (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
651 RBC under Subsection 31A-17-601 (8)(c); or
652 (c) an insurer is determined to be hazardous under this title.
653 (86) (a) "Insurance" means:
654 (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
655 persons to one or more other persons; or
656 (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
657 group of persons that includes the person seeking to distribute that person's risk.
658 (b) "Insurance" includes:
659 (i) a risk distributing arrangement providing for compensation or replacement for
660 damages or loss through the provision of a service or a benefit in kind;
661 (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
662 business and not as merely incidental to a business transaction; and
663 (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
664 but with a class of persons who have agreed to share the risk.
665 (87) "Insurance adjuster" means a person who directs or conducts the investigation,
666 negotiation, or settlement of a claim under an insurance policy other than life insurance or an
667 annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
668 (88) "Insurance business" or "business of insurance" includes:
669 (a) providing health care insurance by an organization that is or is required to be
670 licensed under this title;
671 (b) providing a benefit to an employee in the event of a contingency not within the
672 control of the employee, in which the employee is entitled to the benefit as a right, which
673 benefit may be provided either:
674 (i) by a single employer or by multiple employer groups; or
675 (ii) through one or more trusts, associations, or other entities;
676 (c) providing an annuity:
677 (i) including an annuity issued in return for a gift; and
678 (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
679 and (3);
680 (d) providing the characteristic services of a motor club as outlined in Subsection
681 (116);
682 (e) providing another person with insurance;
683 (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
684 or surety, a contract or policy of title insurance;
685 (g) transacting or proposing to transact any phase of title insurance, including:
686 (i) solicitation;
687 (ii) negotiation preliminary to execution;
688 (iii) execution of a contract of title insurance;
689 (iv) insuring; and
690 (v) transacting matters subsequent to the execution of the contract and arising out of
691 the contract, including reinsurance;
692 (h) transacting or proposing a life settlement; and
693 (i) doing, or proposing to do, any business in substance equivalent to Subsections
694 (88)(a) through (h) in a manner designed to evade this title.
695 (89) "Insurance consultant" or "consultant" means a person who:
696 (a) advises another person about insurance needs and coverages;
697 (b) is compensated by the person advised on a basis not directly related to the insurance
698 placed; and
699 (c) except as provided in Section 31A-23a-501 , is not compensated directly or
700 indirectly by an insurer or producer for advice given.
701 (90) "Insurance holding company system" means a group of two or more affiliated
702 persons, at least one of whom is an insurer.
703 (91) (a) "Insurance producer" or "producer" means a person licensed or required to be
704 licensed under the laws of this state to sell, solicit, or negotiate insurance.
705 (b) (i) "Producer for the insurer" means a producer who is compensated directly or
706 indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
707 insurer.
708 (ii) "Producer for the insurer" may be referred to as an "agent."
709 (c) (i) "Producer for the insured" means a producer who:
710 (A) is compensated directly and only by an insurance customer or an insured; and
711 (B) receives no compensation directly or indirectly from an insurer for selling,
712 soliciting, or negotiating an insurance product of that insurer to an insurance customer or
713 insured.
714 (ii) "Producer for the insured" may be referred to as a "broker."
715 (92) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
716 promise in an insurance policy and includes:
717 (i) a policyholder;
718 (ii) a subscriber;
719 (iii) a member; and
720 (iv) a beneficiary.
721 (b) The definition in Subsection (92)(a):
722 (i) applies only to this title; and
723 (ii) does not define the meaning of this word as used in an insurance policy or
724 certificate.
725 (93) (a) "Insurer" means a person doing an insurance business as a principal including:
726 (i) a fraternal benefit society;
727 (ii) an issuer of a gift annuity other than an annuity specified in Subsections
728 31A-22-1305 (2) and (3);
729 (iii) a motor club;
730 (iv) an employee welfare plan; and
731 (v) a person purporting or intending to do an insurance business as a principal on that
732 person's own account.
733 (b) "Insurer" does not include a governmental entity to the extent the governmental
734 entity is engaged in an activity described in Section 31A-12-107 .
735 (94) "Interinsurance exchange" is defined in Subsection [
736 (95) "Involuntary unemployment insurance" means insurance:
737 (a) offered in connection with an extension of credit; and
738 (b) that provides indemnity if the debtor is involuntarily unemployed for payments
739 coming due on a:
740 (i) specific loan; or
741 (ii) credit transaction.
742 (96) "Large employer," in connection with a health benefit plan, means an employer
743 who, with respect to a calendar year and to a plan year:
744 (a) employed an average of at least 51 eligible employees on each business day during
745 the preceding calendar year; and
746 (b) employs at least two employees on the first day of the plan year.
747 (97) "Late enrollee," with respect to an employer health benefit plan, means an
748 individual whose enrollment is a late enrollment.
749 (98) "Late enrollment," with respect to an employer health benefit plan, means
750 enrollment of an individual other than:
751 (a) on the earliest date on which coverage can become effective for the individual
752 under the terms of the plan; or
753 (b) through special enrollment.
754 (99) (a) Except for a retainer contract or legal assistance described in Section
755 31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
756 specified legal expense.
757 (b) "Legal expense insurance" includes an arrangement that creates a reasonable
758 expectation of an enforceable right.
759 (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
760 legal services incidental to other insurance coverage.
761 (100) (a) "Liability insurance" means insurance against liability:
762 (i) for death, injury, or disability of a human being, or for damage to property,
763 exclusive of the coverages under:
764 (A) Subsection (110) for medical malpractice insurance;
765 (B) Subsection (138) for professional liability insurance; and
766 (C) Subsection [
767 (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
768 insured who is injured, irrespective of legal liability of the insured, when issued with or
769 supplemental to insurance against legal liability for the death, injury, or disability of a human
770 being, exclusive of the coverages under:
771 (A) Subsection (110) for medical malpractice insurance;
772 (B) Subsection (138) for professional liability insurance; and
773 (C) Subsection [
774 (iii) for loss or damage to property resulting from an accident to or explosion of a
775 boiler, pipe, pressure container, machinery, or apparatus;
776 (iv) for loss or damage to property caused by:
777 (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
778 (B) water entering through a leak or opening in a building; or
779 (v) for other loss or damage properly the subject of insurance not within another kind
780 of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
781 (b) "Liability insurance" includes:
782 (i) vehicle liability insurance;
783 (ii) residential dwelling liability insurance; and
784 (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
785 boiler, machinery, or apparatus of any kind when done in connection with insurance on the
786 elevator, boiler, machinery, or apparatus.
787 (101) (a) "License" means authorization issued by the commissioner to engage in an
788 activity that is part of or related to the insurance business.
789 (b) "License" includes a certificate of authority issued to an insurer.
790 (102) (a) "Life insurance" means:
791 (i) insurance on a human life; and
792 (ii) insurance pertaining to or connected with human life.
793 (b) The business of life insurance includes:
794 (i) granting a death benefit;
795 (ii) granting an annuity benefit;
796 (iii) granting an endowment benefit;
797 (iv) granting an additional benefit in the event of death by accident;
798 (v) granting an additional benefit to safeguard the policy against lapse; and
799 (vi) providing an optional method of settlement of proceeds.
800 (103) "Limited license" means a license that:
801 (a) is issued for a specific product of insurance; and
802 (b) limits an individual or agency to transact only for that product or insurance.
803 (104) "Limited line credit insurance" includes the following forms of insurance:
804 (a) credit life;
805 (b) credit accident and health;
806 (c) credit property;
807 (d) credit unemployment;
808 (e) involuntary unemployment;
809 (f) mortgage life;
810 (g) mortgage guaranty;
811 (h) mortgage accident and health;
812 (i) guaranteed automobile protection; and
813 (j) another form of insurance offered in connection with an extension of credit that:
814 (i) is limited to partially or wholly extinguishing the credit obligation; and
815 (ii) the commissioner determines by rule should be designated as a form of limited line
816 credit insurance.
817 (105) "Limited line credit insurance producer" means a person who sells, solicits, or
818 negotiates one or more forms of limited line credit insurance coverage to an individual through
819 a master, corporate, group, or individual policy.
820 (106) "Limited line insurance" includes:
821 (a) bail bond;
822 (b) limited line credit insurance;
823 (c) legal expense insurance;
824 (d) motor club insurance;
825 (e) car rental related insurance;
826 (f) travel insurance;
827 (g) crop insurance;
828 (h) self-service storage insurance;
829 (i) guaranteed asset protection waiver;
830 (j) portable electronics insurance; and
831 (k) another form of limited insurance that the commissioner determines by rule should
832 be designated a form of limited line insurance.
833 (107) "Limited lines authority" includes[
834 Subsection (106)[
835 [
836 (108) "Limited lines producer" means a person who sells, solicits, or negotiates limited
837 lines insurance.
838 (109) (a) "Long-term care insurance" means an insurance policy or rider advertised,
839 marketed, offered, or designated to provide coverage:
840 (i) in a setting other than an acute care unit of a hospital;
841 (ii) for not less than 12 consecutive months for a covered person on the basis of:
842 (A) expenses incurred;
843 (B) indemnity;
844 (C) prepayment; or
845 (D) another method;
846 (iii) for one or more necessary or medically necessary services that are:
847 (A) diagnostic;
848 (B) preventative;
849 (C) therapeutic;
850 (D) rehabilitative;
851 (E) maintenance; or
852 (F) personal care; and
853 (iv) that may be issued by:
854 (A) an insurer;
855 (B) a fraternal benefit society;
856 (C) (I) a nonprofit health hospital; and
857 (II) a medical service corporation;
858 (D) a prepaid health plan;
859 (E) a health maintenance organization; or
860 (F) an entity similar to the entities described in Subsections (109)(a)(iv)(A) through (E)
861 to the extent that the entity is otherwise authorized to issue life or health care insurance.
862 (b) "Long-term care insurance" includes:
863 (i) any of the following that provide directly or supplement long-term care insurance:
864 (A) a group or individual annuity or rider; or
865 (B) a life insurance policy or rider;
866 (ii) a policy or rider that provides for payment of benefits on the basis of:
867 (A) cognitive impairment; or
868 (B) functional capacity; or
869 (iii) a qualified long-term care insurance contract.
870 (c) "Long-term care insurance" does not include:
871 (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
872 (ii) basic hospital expense coverage;
873 (iii) basic medical/surgical expense coverage;
874 (iv) hospital confinement indemnity coverage;
875 (v) major medical expense coverage;
876 (vi) income replacement or related asset-protection coverage;
877 (vii) accident only coverage;
878 (viii) coverage for a specified:
879 (A) disease; or
880 (B) accident;
881 (ix) limited benefit health coverage; or
882 (x) a life insurance policy that accelerates the death benefit to provide the option of a
883 lump sum payment:
884 (A) if the following are not conditioned on the receipt of long-term care:
885 (I) benefits; or
886 (II) eligibility; and
887 (B) the coverage is for one or more the following qualifying events:
888 (I) terminal illness;
889 (II) medical conditions requiring extraordinary medical intervention; or
890 (III) permanent institutional confinement.
891 (110) "Medical malpractice insurance" means insurance against legal liability incident
892 to the practice and provision of a medical service other than the practice and provision of a
893 dental service.
894 (111) "Member" means a person having membership rights in an insurance
895 corporation.
896 (112) "Minimum capital" or "minimum required capital" means the capital that must be
897 constantly maintained by a stock insurance corporation as required by statute.
898 (113) "Mortgage accident and health insurance" means insurance offered in connection
899 with an extension of credit that provides indemnity for payments coming due on a mortgage
900 while the debtor has a disability.
901 (114) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
902 or other creditor is indemnified against losses caused by the default of a debtor.
903 (115) "Mortgage life insurance" means insurance on the life of a debtor in connection
904 with an extension of credit that pays if the debtor dies.
905 (116) "Motor club" means a person:
906 (a) licensed under:
907 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
908 (ii) Chapter 11, Motor Clubs; or
909 (iii) Chapter 14, Foreign Insurers; and
910 (b) that promises for an advance consideration to provide for a stated period of time
911 one or more:
912 (i) legal services under Subsection 31A-11-102 (1)(b);
913 (ii) bail services under Subsection 31A-11-102 (1)(c); or
914 (iii) (A) trip reimbursement;
915 (B) towing services;
916 (C) emergency road services;
917 (D) stolen automobile services;
918 (E) a combination of the services listed in Subsections (116)(b)(iii)(A) through (D); or
919 (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
920 (117) "Mutual" means a mutual insurance corporation.
921 (118) "Network plan" means health care insurance:
922 (a) that is issued by an insurer; and
923 (b) under which the financing and delivery of medical care is provided, in whole or in
924 part, through a defined set of providers under contract with the insurer, including the financing
925 and delivery of an item paid for as medical care.
926 (119) "Nonparticipating" means a plan of insurance under which the insured is not
927 entitled to receive a dividend representing a share of the surplus of the insurer.
928 (120) "Ocean marine insurance" means insurance against loss of or damage to:
929 (a) ships or hulls of ships;
930 (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
931 securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
932 interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
933 (c) earnings such as freight, passage money, commissions, or profits derived from
934 transporting goods or people upon or across the oceans or inland waterways; or
935 (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
936 owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
937 in connection with maritime activity.
938 (121) "Order" means an order of the commissioner.
939 (122) "Outline of coverage" means a summary that explains an accident and health
940 insurance policy.
941 (123) "Participating" means a plan of insurance under which the insured is entitled to
942 receive a dividend representing a share of the surplus of the insurer.
943 (124) "Participation," as used in a health benefit plan, means a requirement relating to
944 the minimum percentage of eligible employees that must be enrolled in relation to the total
945 number of eligible employees of an employer reduced by each eligible employee who
946 voluntarily declines coverage under the plan because the employee:
947 (a) has other group health care insurance coverage; or
948 (b) receives:
949 (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
950 Security Amendments of 1965; or
951 (ii) another government health benefit.
952 (125) "Person" includes:
953 (a) an individual;
954 (b) a partnership;
955 (c) a corporation;
956 (d) an incorporated or unincorporated association;
957 (e) a joint stock company;
958 (f) a trust;
959 (g) a limited liability company;
960 (h) a reciprocal;
961 (i) a syndicate; or
962 (j) another similar entity or combination of entities acting in concert.
963 (126) "Personal lines insurance" means property and casualty insurance coverage sold
964 for primarily noncommercial purposes to:
965 (a) an individual; or
966 (b) a family.
967 (127) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
968 (128) "Plan year" means:
969 (a) the year that is designated as the plan year in:
970 (i) the plan document of a group health plan; or
971 (ii) a summary plan description of a group health plan;
972 (b) if the plan document or summary plan description does not designate a plan year or
973 there is no plan document or summary plan description:
974 (i) the year used to determine deductibles or limits;
975 (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
976 or
977 (iii) the employer's taxable year if:
978 (A) the plan does not impose deductibles or limits on a yearly basis; and
979 (B) (I) the plan is not insured; or
980 (II) the insurance policy is not renewed on an annual basis; or
981 (c) in a case not described in Subsection (128)(a) or (b), the calendar year.
982 (129) (a) "Policy" means a document, including an attached endorsement or application
983 that:
984 (i) purports to be an enforceable contract; and
985 (ii) memorializes in writing some or all of the terms of an insurance contract.
986 (b) "Policy" includes a service contract issued by:
987 (i) a motor club under Chapter 11, Motor Clubs;
988 (ii) a service contract provided under Chapter 6a, Service Contracts; and
989 (iii) a corporation licensed under:
990 (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
991 (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
992 (c) "Policy" does not include:
993 (i) a certificate under a group insurance contract; or
994 (ii) a document that does not purport to have legal effect.
995 (130) "Policyholder" means a person who controls a policy, binder, or oral contract by
996 ownership, premium payment, or otherwise.
997 (131) "Policy illustration" means a presentation or depiction that includes
998 nonguaranteed elements of a policy of life insurance over a period of years.
999 (132) "Policy summary" means a synopsis describing the elements of a life insurance
1000 policy.
1001 (133) "PPACA" means the Patient Protection and Affordable Care Act, Pub. L. No.
1002 111-148 and the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and
1003 related federal regulations and guidance.
1004 (134) "Preexisting condition," with respect to a health benefit plan:
1005 (a) means a condition that was present before the effective date of coverage, whether or
1006 not medical advice, diagnosis, care, or treatment was recommended or received before that day;
1007 and
1008 (b) does not include a condition indicated by genetic information unless an actual
1009 diagnosis of the condition by a physician has been made.
1010 (135) (a) "Premium" means the monetary consideration for an insurance policy.
1011 (b) "Premium" includes, however designated:
1012 (i) an assessment;
1013 (ii) a membership fee;
1014 (iii) a required contribution; or
1015 (iv) monetary consideration.
1016 (c) (i) "Premium" does not include consideration paid to a third party administrator for
1017 the third party administrator's services.
1018 (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
1019 insurance on the risks administered by the third party administrator.
1020 (136) "Principal officers" for a corporation means the officers designated under
1021 Subsection 31A-5-203 (3).
1022 (137) "Proceeding" includes an action or special statutory proceeding.
1023 (138) "Professional liability insurance" means insurance against legal liability incident
1024 to the practice of a profession and provision of a professional service.
1025 (139) (a) Except as provided in Subsection (139)(b), "property insurance" means
1026 insurance against loss or damage to real or personal property of every kind and any interest in
1027 that property:
1028 (i) from all hazards or causes; and
1029 (ii) against loss consequential upon the loss or damage including vehicle
1030 comprehensive and vehicle physical damage coverages.
1031 (b) "Property insurance" does not include:
1032 (i) inland marine insurance; and
1033 (ii) ocean marine insurance.
1034 (140) "Qualified long-term care insurance contract" or "federally tax qualified
1035 long-term care insurance contract" means:
1036 (a) an individual or group insurance contract that meets the requirements of Section
1037 7702B(b), Internal Revenue Code; or
1038 (b) the portion of a life insurance contract that provides long-term care insurance:
1039 (i) (A) by rider; or
1040 (B) as a part of the contract; and
1041 (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
1042 Code.
1043 (141) "Qualified United States financial institution" means an institution that:
1044 (a) is:
1045 (i) organized under the laws of the United States or any state; or
1046 (ii) in the case of a United States office of a foreign banking organization, licensed
1047 under the laws of the United States or any state;
1048 (b) is regulated, supervised, and examined by a United States federal or state authority
1049 having regulatory authority over a bank or trust company; and
1050 (c) meets the standards of financial condition and standing that are considered
1051 necessary and appropriate to regulate the quality of a financial institution whose letters of credit
1052 will be acceptable to the commissioner as determined by:
1053 (i) the commissioner by rule; or
1054 (ii) the Securities Valuation Office of the National Association of Insurance
1055 Commissioners.
1056 (142) (a) "Rate" means:
1057 (i) the cost of a given unit of insurance; or
1058 (ii) for property or casualty insurance, that cost of insurance per exposure unit either
1059 expressed as:
1060 (A) a single number; or
1061 (B) a pure premium rate, adjusted before the application of individual risk variations
1062 based on loss or expense considerations to account for the treatment of:
1063 (I) expenses;
1064 (II) profit; and
1065 (III) individual insurer variation in loss experience.
1066 (b) "Rate" does not include a minimum premium.
1067 (143) (a) Except as provided in Subsection (143)(b), "rate service organization" means
1068 a person who assists an insurer in rate making or filing by:
1069 (i) collecting, compiling, and furnishing loss or expense statistics;
1070 (ii) recommending, making, or filing rates or supplementary rate information; or
1071 (iii) advising about rate questions, except as an attorney giving legal advice.
1072 (b) "Rate service organization" does not mean:
1073 (i) an employee of an insurer;
1074 (ii) a single insurer or group of insurers under common control;
1075 (iii) a joint underwriting group; or
1076 (iv) an individual serving as an actuarial or legal consultant.
1077 (144) "Rating manual" means any of the following used to determine initial and
1078 renewal policy premiums:
1079 (a) a manual of rates;
1080 (b) a classification;
1081 (c) a rate-related underwriting rule; and
1082 (d) a rating formula that describes steps, policies, and procedures for determining
1083 initial and renewal policy premiums.
1084 (145) (a) "Rebate" means a licensee paying, allowing, giving, or offering to pay, allow,
1085 or give, directly or indirectly:
1086 (i) a refund of premium or portion of premium;
1087 (ii) a refund of commission or portion of commission;
1088 (iii) a refund of all or a portion of a consultant fee; or
1089 (iv) providing services or other benefits not specified in an insurance or annuity
1090 contract.
1091 (b) "Rebate" does not include:
1092 (i) a refund due to termination or changes in coverage;
1093 (ii) a refund due to overcharges made in error by the licensee; or
1094 (iii) savings or wellness benefits as provided in the contract by the licensee.
1095 [
1096 (a) the date delivered to and stamped received by the department, if delivered in
1097 person;
1098 (b) the post mark date, if delivered by mail;
1099 (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
1100 (d) the received date recorded on an item delivered, if delivered by:
1101 (i) facsimile;
1102 (ii) email; or
1103 (iii) another electronic method; or
1104 (e) a date specified in:
1105 (i) a statute;
1106 (ii) a rule; or
1107 (iii) an order.
1108 [
1109 association of persons:
1110 (a) operating through an attorney-in-fact common to all of the persons; and
1111 (b) exchanging insurance contracts with one another that provide insurance coverage
1112 on each other.
1113 [
1114 consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
1115 reinsurance transactions, this title sometimes refers to:
1116 (a) the insurer transferring the risk as the "ceding insurer"; and
1117 (b) the insurer assuming the risk as the:
1118 (i) "assuming insurer"; or
1119 (ii) "assuming reinsurer."
1120 [
1121 authority to assume reinsurance.
1122 [
1123 liability resulting from or incident to the ownership, maintenance, or use of a residential
1124 dwelling that is a detached single family residence or multifamily residence up to four units.
1125 [
1126 assumed under a reinsurance contract.
1127 (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
1128 liability assumed under a reinsurance contract.
1129 [
1130 (a) an insurance policy; or
1131 (b) an insurance certificate.
1132 [
1133 (i) note;
1134 (ii) stock;
1135 (iii) bond;
1136 (iv) debenture;
1137 (v) evidence of indebtedness;
1138 (vi) certificate of interest or participation in a profit-sharing agreement;
1139 (vii) collateral-trust certificate;
1140 (viii) preorganization certificate or subscription;
1141 (ix) transferable share;
1142 (x) investment contract;
1143 (xi) voting trust certificate;
1144 (xii) certificate of deposit for a security;
1145 (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
1146 payments out of production under such a title or lease;
1147 (xiv) commodity contract or commodity option;
1148 (xv) certificate of interest or participation in, temporary or interim certificate for,
1149 receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
1150 in Subsections [
1151 (xvi) another interest or instrument commonly known as a security.
1152 (b) "Security" does not include:
1153 (i) any of the following under which an insurance company promises to pay money in a
1154 specific lump sum or periodically for life or some other specified period:
1155 (A) insurance;
1156 (B) an endowment policy; or
1157 (C) an annuity contract; or
1158 (ii) a burial certificate or burial contract.
1159 [
1160 exclusion from coverage in accident and health insurance.
1161 [
1162 provides for spreading its own risks by a systematic plan.
1163 (b) Except as provided in this Subsection [
1164 include an arrangement under which a number of persons spread their risks among themselves.
1165 (c) "Self-insurance" includes:
1166 (i) an arrangement by which a governmental entity undertakes to indemnify an
1167 employee for liability arising out of the employee's employment; and
1168 (ii) an arrangement by which a person with a managed program of self-insurance and
1169 risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
1170 employees for liability or risk that is related to the relationship or employment.
1171 (d) "Self-insurance" does not include an arrangement with an independent contractor.
1172 [
1173 (a) by any means;
1174 (b) for money or its equivalent; and
1175 (c) on behalf of an insurance company.
1176 [
1177 advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
1178 insurance, but that provides coverage for less than 12 consecutive months for each covered
1179 person.
1180 [
1181 during each of which an individual does not have creditable coverage.
1182 [
1183
1184 who:
1185 (a) employed [
1186 an average of 50 eligible employees on [
1187 calendar year; and
1188 (b) employs at least [
1189 [
1190 the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
1191 Portability and Accountability Act.
1192 [
1193 either directly or indirectly through one or more affiliates or intermediaries.
1194 (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1195 shares are owned by that person either alone or with its affiliates, except for the minimum
1196 number of shares the law of the subsidiary's domicile requires to be owned by directors or
1197 others.
1198 [
1199 (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
1200 perform the principal's obligations to a creditor or other obligee;
1201 (b) bail bond insurance; and
1202 (c) fidelity insurance.
1203 [
1204 and liabilities.
1205 (b) (i) "Permanent surplus" means the surplus of an insurer or organization that is
1206 designated by the insurer or organization as permanent.
1207 (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-205 require
1208 that insurers or organizations doing business in this state maintain specified minimum levels of
1209 permanent surplus.
1210 (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
1211 same as the minimum required capital requirement that applies to stock insurers.
1212 (c) "Excess surplus" means:
1213 (i) for a life insurer, accident and health insurer, health organization, or property and
1214 casualty insurer as defined in Section 31A-17-601 , the lesser of:
1215 (A) that amount of an insurer's or health organization's total adjusted capital that
1216 exceeds the product of:
1217 (I) 2.5; and
1218 (II) the sum of the insurer's or health organization's minimum capital or permanent
1219 surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
1220 (B) that amount of an insurer's or health organization's total adjusted capital that
1221 exceeds the product of:
1222 (I) 3.0; and
1223 (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
1224 (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
1225 that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1226 (A) 1.5; and
1227 (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
1228 [
1229 collects charges or premiums from, or who, for consideration, adjusts or settles claims of
1230 residents of the state in connection with insurance coverage, annuities, or service insurance
1231 coverage, except:
1232 (a) a union on behalf of its members;
1233 (b) a person administering a:
1234 (i) pension plan subject to the federal Employee Retirement Income Security Act of
1235 1974;
1236 (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1237 (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1238 (c) an employer on behalf of the employer's employees or the employees of one or
1239 more of the subsidiary or affiliated corporations of the employer;
1240 (d) an insurer licensed under the following, but only for a line of insurance for which
1241 the insurer holds a license in this state:
1242 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1243 (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
1244 (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1245 (iv) Chapter 9, Insurance Fraternals; or
1246 (v) Chapter 14, Foreign Insurers;
1247 (e) a person:
1248 (i) licensed or exempt from licensing under:
1249 (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1250 Reinsurance Intermediaries; or
1251 (B) Chapter 26, Insurance Adjusters; and
1252 (ii) whose activities are limited to those authorized under the license the person holds
1253 or for which the person is exempt; or
1254 (f) an institution, bank, or financial institution:
1255 (i) that is:
1256 (A) an institution whose deposits and accounts are to any extent insured by a federal
1257 deposit insurance agency, including the Federal Deposit Insurance Corporation or National
1258 Credit Union Administration; or
1259 (B) a bank or other financial institution that is subject to supervision or examination by
1260 a federal or state banking authority; and
1261 (ii) that does not adjust claims without a third party administrator license.
1262 [
1263 owner of real or personal property or the holder of liens or encumbrances on that property, or
1264 others interested in the property against loss or damage suffered by reason of liens or
1265 encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
1266 or unenforceability of any liens or encumbrances on the property.
1267 [
1268 organization's statutory capital and surplus as determined in accordance with:
1269 (a) the statutory accounting applicable to the annual financial statements required to be
1270 filed under Section 31A-4-113 ; and
1271 (b) another item provided by the RBC instructions, as RBC instructions is defined in
1272 Section 31A-17-601 .
1273 [
1274 a corporation.
1275 (b) "Trustee," when used in reference to an employee welfare fund, means an
1276 individual, firm, association, organization, joint stock company, or corporation, whether acting
1277 individually or jointly and whether designated by that name or any other, that is charged with
1278 or has the overall management of an employee welfare fund.
1279 [
1280 insurer" means an insurer:
1281 (i) not holding a valid certificate of authority to do an insurance business in this state;
1282 or
1283 (ii) transacting business not authorized by a valid certificate.
1284 (b) "Admitted insurer" or "authorized insurer" means an insurer:
1285 (i) holding a valid certificate of authority to do an insurance business in this state; and
1286 (ii) transacting business as authorized by a valid certificate.
1287 [
1288 insurer.
1289 [
1290 from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
1291 vehicle comprehensive or vehicle physical damage coverage under Subsection (139).
1292 [
1293 security convertible into a security with a voting right associated with the security.
1294 [
1295 pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
1296 the health benefit plan, can become effective.
1297 [
1298 (a) insurance for indemnification of an employer against liability for compensation
1299 based on:
1300 (i) a compensable accidental injury; and
1301 (ii) occupational disease disability;
1302 (b) employer's liability insurance incidental to workers' compensation insurance and
1303 written in connection with workers' compensation insurance; and
1304 (c) insurance assuring to a person entitled to workers' compensation benefits the
1305 compensation provided by law.
1306 Section 2. Section 31A-2-104 is amended to read:
1307 31A-2-104. Other employees -- Insurance fraud investigators.
1308 (1) The department shall employ a chief examiner and such other professional,
1309 technical, and clerical employees as necessary to carry out the duties of the department.
1310 (2) An insurance fraud investigator employed pursuant to Subsection (1) may as
1311 approved by the commissioner:
1312 (a) be designated a [
1313 [
1314 (b) be eligible for retirement benefits under the Public Safety Employee's Retirement
1315 System.
1316 Section 3. Section 31A-3-304 (Superseded 07/01/15) is amended to read:
1317 31A-3-304 (Superseded 07/01/15). Annual fees -- Other taxes or fees prohibited --
1318 Captive Insurance Restricted Account.
1319 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
1320 to obtain or renew a certificate of authority.
1321 (b) The commissioner shall:
1322 (i) determine the annual fee pursuant to Section 31A-3-103 ; and
1323 (ii) consider whether the annual fee is competitive with fees imposed by other states on
1324 captive insurance companies.
1325 (2) A captive insurance company that fails to pay the fee required by this section is
1326 subject to the relevant sanctions of this title.
1327 (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
1328 9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
1329 the laws of this state that may be levied or assessed on a captive insurance company:
1330 (i) a fee under this section;
1331 (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
1332 (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
1333 Act.
1334 (b) The state or a county, city, or town within the state may not levy or collect an
1335 occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
1336 against a captive insurance company.
1337 (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
1338 against a captive insurance company.
1339 (d) A captive insurance company is subject to real and personal property taxes.
1340 (4) A captive insurance company shall pay the fee imposed by this section to the
1341 commissioner by June [
1342 (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
1343 deposited into the Captive Insurance Restricted Account.
1344 (b) There is created in the General Fund a restricted account known as the "Captive
1345 Insurance Restricted Account."
1346 (c) The Captive Insurance Restricted Account shall consist of the fees described in
1347 Subsection (3)(a).
1348 (d) The commissioner shall administer the Captive Insurance Restricted Account.
1349 Subject to appropriations by the Legislature, the commissioner shall use the money deposited
1350 into the Captive Insurance Restricted Account to:
1351 (i) administer and enforce:
1352 (A) Chapter 37, Captive Insurance Companies Act; and
1353 (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
1354 (ii) promote the captive insurance industry in Utah.
1355 (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
1356 except that at the end of each fiscal year, money received by the commissioner in excess of
1357 $950,000 shall be treated as free revenue in the General Fund.
1358 Section 4. Section 31A-3-304 (Effective 07/01/15) is amended to read:
1359 31A-3-304 (Effective 07/01/15). Annual fees -- Other taxes or fees prohibited --
1360 Captive Insurance Restricted Account.
1361 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
1362 to obtain or renew a certificate of authority.
1363 (b) The commissioner shall:
1364 (i) determine the annual fee pursuant to Section 31A-3-103 ; and
1365 (ii) consider whether the annual fee is competitive with fees imposed by other states on
1366 captive insurance companies.
1367 (2) A captive insurance company that fails to pay the fee required by this section is
1368 subject to the relevant sanctions of this title.
1369 (3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
1370 9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
1371 the laws of this state that may be levied or assessed on a captive insurance company:
1372 (i) a fee under this section;
1373 (ii) a fee under Chapter 37, Captive Insurance Companies Act; and
1374 (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
1375 Act.
1376 (b) The state or a county, city, or town within the state may not levy or collect an
1377 occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
1378 against a captive insurance company.
1379 (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
1380 against a captive insurance company.
1381 (d) A captive insurance company is subject to real and personal property taxes.
1382 (4) A captive insurance company shall pay the fee imposed by this section to the
1383 commissioner by June [
1384 (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
1385 deposited into the Captive Insurance Restricted Account.
1386 (b) There is created in the General Fund a restricted account known as the "Captive
1387 Insurance Restricted Account."
1388 (c) The Captive Insurance Restricted Account shall consist of the fees described in
1389 Subsection (3)(a).
1390 (d) The commissioner shall administer the Captive Insurance Restricted Account.
1391 Subject to appropriations by the Legislature, the commissioner shall use the money deposited
1392 into the Captive Insurance Restricted Account to:
1393 (i) administer and enforce:
1394 (A) Chapter 37, Captive Insurance Companies Act; and
1395 (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
1396 (ii) promote the captive insurance industry in Utah.
1397 (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
1398 except that at the end of each fiscal year, money received by the commissioner in excess of
1399 $1,250,000 shall be treated as free revenue in the General Fund.
1400 Section 5. Section 31A-4-102 is amended to read:
1401 31A-4-102. Qualified insurers.
1402 (1) A person may not conduct an insurance business in Utah in person, through an
1403 agent, through a broker, through the mail, or through another method of communication,
1404 except:
1405 (a) an insurer:
1406 (i) authorized to do business in Utah under [
1407 (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1408 (B) Chapter 7, Nonprofit Health Service Insurance Corporations;
1409 (C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1410 (D) Chapter 9, Insurance Fraternals;
1411 (E) Chapter 10, Annuities;
1412 (F) Chapter 11, Motor Clubs;
1413 (G) Chapter 13, Employee Welfare Funds and Plans;
1414 (H) Chapter 14, Foreign Insurers;
1415 (I) Chapter 37, Captive Insurance Companies Act; or
1416 (J) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
1417 (ii) within the limits of its certificate of authority;
1418 (b) a joint underwriting group under Section 31A-2-214 or 31A-20-102 ;
1419 (c) an insurer doing business under Section 31A-15-103 ;
1420 (d) a person who submits to the commissioner a certificate from the United States
1421 Department of Labor, or such other evidence as satisfies the commissioner, that the laws of
1422 Utah are preempted with respect to specified activities of that person by Section 514 of the
1423 Employee Retirement Income Security Act of 1974 or other federal law; or
1424 (e) a person exempt from this title under Section 31A-1-103 or another applicable
1425 statute.
1426 (2) As used in this section, "insurer" includes a bail bond surety company, as defined in
1427 Section 31A-35-102 .
1428 Section 6. Section 31A-4-115 is amended to read:
1429 31A-4-115. Plan of orderly withdrawal.
1430 (1) (a) When an insurer intends to withdraw from writing a line of insurance in this
1431 state or to reduce its total annual premium volume by 75% or more, the insurer shall file with
1432 the commissioner a plan of orderly withdrawal.
1433 (b) For purposes of this section, a discontinuance of a health benefit plan pursuant to
1434 one of the following provisions is a withdrawal from a line of insurance:
1435 (i) Subsection 31A-30-107 (3)(e); or
1436 (ii) Subsection 31A-30-107.1 (3)(e).
1437 (2) An insurer's plan of orderly withdrawal shall:
1438 (a) indicate the date the insurer intends to begin and complete its withdrawal plan; and
1439 (b) include provisions for:
1440 (i) meeting the insurer's contractual obligations;
1441 (ii) providing services to its Utah policyholders and claimants;
1442 (iii) meeting [
1443 (iv) [
1444
1445
1446
1447
1448 assumed or placed with another insurer approved by the commissioner.
1449 (3) The commissioner shall approve a plan of orderly withdrawal if the plan of orderly
1450 withdrawal adequately demonstrates that the insurer will:
1451 (a) protect the interests of the people of the state;
1452 (b) meet the insurer's contractual obligations;
1453 (c) provide service to the insurer's Utah policyholders and claimants; and
1454 (d) meet [
1455 (4) Section 31A-2-302 governs the commissioner's approval or disapproval of a plan for
1456 orderly withdrawal.
1457 (5) The commissioner may require an insurer to increase the deposit maintained in
1458 accordance with Section 31A-4-105 or Section 31A-4-105.5 and place the deposit in trust in
1459 the name of the commissioner upon finding, after an adjudicative proceeding that:
1460 (a) there is reasonable cause to conclude that the interests of the people of the state are
1461 best served by such action; and
1462 (b) the insurer:
1463 (i) has filed a plan of orderly withdrawal; or
1464 (ii) intends to:
1465 (A) withdraw from writing a line of insurance in this state; or
1466 (B) reduce the insurer's total annual premium volume by 75% or more.
1467 (6) An insurer is subject to the civil penalties under Section 31A-2-308 , if the insurer:
1468 (a) withdraws from writing insurance in this state without receiving the commissioner's
1469 approval of a plan of orderly withdrawal; or
1470 (b) reduces its total annual premium volume by 75% or more in any year without
1471 [
1472 commissioner's approval of a plan of orderly withdrawal.
1473 (7) An insurer that withdraws from writing all lines of insurance in this state may not
1474 resume writing insurance in this state for five years unless[
1475 the prohibition should be waived because the waiver is:
1476 [
1477 [
1478 [
1479 (8) The commissioner shall adopt rules necessary to implement this section.
1480 Section 7. Section 31A-8-402.3 is amended to read:
1481 31A-8-402.3. Discontinuance, nonrenewal, or changes to group health benefit
1482 plans.
1483 (1) Except as otherwise provided in this section, a group health benefit plan for a plan
1484 sponsor is renewable and continues in force:
1485 (a) with respect to all eligible employees and dependents; and
1486 (b) at the option of the plan sponsor.
1487 (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
1488 (a) for a network plan, if[
1489 plan who lives, resides, or works in:
1490 [
1491 [
1492 [
1493
1494 (b) for coverage made available in the small or large employer market only through an
1495 association, if:
1496 (i) the employer's membership in the association ceases; and
1497 (ii) the coverage is terminated uniformly without regard to any health status-related
1498 factor relating to any covered individual.
1499 (3) A health benefit plan for a plan sponsor may be discontinued if:
1500 (a) a condition described in Subsection (2) exists;
1501 (b) the plan sponsor fails to pay premiums or contributions in accordance with the
1502 terms of the contract;
1503 (c) the plan sponsor:
1504 (i) performs an act or practice that constitutes fraud; or
1505 (ii) makes an intentional misrepresentation of material fact under the terms of the
1506 coverage;
1507 (d) the insurer:
1508 (i) elects to discontinue offering a particular health benefit product delivered or issued
1509 for delivery in this state; and
1510 (ii) (A) provides notice of the discontinuation in writing:
1511 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
1512 (II) at least 90 days before the date the coverage will be discontinued;
1513 (B) provides notice of the discontinuation in writing:
1514 (I) to the commissioner; and
1515 (II) at least three working days prior to the date the notice is sent to the affected plan
1516 sponsors, employees, and dependents of the plan sponsors or employees;
1517 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase:
1518 (I) all other health benefit products currently being offered by the insurer in the market;
1519 or
1520 (II) in the case of a large employer, any other health benefit product currently being
1521 offered in that market; and
1522 (D) in exercising the option to discontinue that product and in offering the option of
1523 coverage in this section, acts uniformly without regard to:
1524 (I) the claims experience of a plan sponsor;
1525 (II) any health status-related factor relating to any covered participant or beneficiary; or
1526 (III) any health status-related factor relating to any new participant or beneficiary who
1527 may become eligible for the coverage; or
1528 (e) the insurer:
1529 (i) elects to discontinue all of the insurer's health benefit plans in:
1530 (A) the small employer market;
1531 (B) the large employer market; or
1532 (C) both the small employer and large employer markets; and
1533 (ii) (A) provides notice of the discontinuation in writing:
1534 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
1535 (II) at least 180 days before the date the coverage will be discontinued;
1536 (B) provides notice of the discontinuation in writing:
1537 (I) to the commissioner in each state in which an affected insured individual is known
1538 to reside; and
1539 (II) at least 30 working days prior to the date the notice is sent to the affected plan
1540 sponsors, employees, and the dependents of the plan sponsors or employees;
1541 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
1542 market; and
1543 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
1544 (4) A large employer health benefit plan may be discontinued or nonrenewed:
1545 (a) if a condition described in Subsection (2) exists; or
1546 (b) for noncompliance with the insurer's:
1547 (i) minimum participation requirements; or
1548 (ii) employer contribution requirements.
1549 (5) A small employer health benefit plan may be discontinued or nonrenewed:
1550 (a) if a condition described in Subsection (2) exists; or
1551 (b) for noncompliance with the insurer's employer contribution requirements.
1552 (6) A small employer health benefit plan may be nonrenewed:
1553 (a) if a condition described in Subsection (2) exists; or
1554 (b) for noncompliance with the insurer's minimum participation requirements.
1555 (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
1556 discontinued if after issuance of coverage the eligible employee:
1557 (i) engages in an act or practice in connection with the coverage that constitutes fraud;
1558 or
1559 (ii) makes an intentional misrepresentation of material fact in connection with the
1560 coverage.
1561 (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
1562 (i) 12 months after the date of discontinuance; and
1563 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
1564 to reenroll.
1565 (c) At the time the eligible employee's coverage is discontinued under Subsection
1566 (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
1567 discontinued.
1568 (d) An eligible employee may not be discontinued under this Subsection (7) because of
1569 a fraud or misrepresentation that relates to health status.
1570 (8) For purposes of this section, a reference to "plan sponsor" includes a reference to
1571 the employer:
1572 (a) with respect to coverage provided to an employer member of the association; and
1573 (b) if the health benefit plan is made available by an insurer in the employer market
1574 only through:
1575 (i) an association;
1576 (ii) a trust; or
1577 (iii) a discretionary group.
1578 (9) An insurer may modify a health benefit plan for a plan sponsor only:
1579 (a) at the time of coverage renewal; and
1580 (b) if the modification is effective uniformly among all plans with that product.
1581 Section 8. Section 31A-16-103 is amended to read:
1582 31A-16-103. Acquisition of control of or merger with domestic insurer.
1583 (1) (a) A person may not take the actions described in Subsections (1)(b) or (c) unless,
1584 at the time any offer, request, or invitation is made or any such agreement is entered into, or
1585 prior to the acquisition of securities if no offer or agreement is involved:
1586 (i) the person files with the commissioner a statement containing the information
1587 required by this section;
1588 (ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
1589 insurer; and
1590 (iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
1591 (b) Unless the person complies with Subsection (1)(a), a person other than the issuer
1592 may not make a tender offer for, a request or invitation for tenders of, or enter into any
1593 agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
1594 any voting security of a domestic insurer if after the acquisition, the person would directly,
1595 indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
1596 (c) Unless the person complies with Subsection (1)(a), a person may not enter into an
1597 agreement to merge with or otherwise to acquire control of:
1598 (i) a domestic insurer; or
1599 (ii) any person controlling a domestic insurer.
1600 (d) (i) For purposes of this section, a domestic insurer includes any person controlling a
1601 domestic insurer unless the person as determined by the commissioner is either directly or
1602 through its affiliates primarily engaged in business other than the business of insurance.
1603 (ii) The controlling person described in Subsection (1)(d)(i) shall file with the
1604 commissioner a preacquisition notification containing the information required in Subsection
1605 (2) 30 calendar days before the proposed effective date of the acquisition.
1606 (iii) For the purposes of this section, "person" does not include any securities broker
1607 that in the usual and customary brokers function holds less than 20% of:
1608 (A) the voting securities of an insurance company; or
1609 (B) any person that controls an insurance company.
1610 (iv) This section applies to all domestic insurers and other entities licensed under
1611 Chapters 5, 7, 8, 9, and 11.
1612 (e) (i) An agreement for acquisition of control or merger as contemplated by this
1613 Subsection (1) is not valid or enforceable unless the agreement:
1614 (A) is in writing; and
1615 (B) includes a provision that the agreement is subject to the approval of the
1616 commissioner upon the filing of any applicable statement required under this chapter.
1617 (ii) A written agreement for acquisition or control that includes the provision described
1618 in Subsection (1)(e)(i) satisfies the requirements of this Subsection (1).
1619 (2) The statement to be filed with the commissioner under Subsection (1) shall be
1620 made under oath or affirmation and shall contain the following information:
1621 (a) the name and address of the "acquiring party," which means each person by whom
1622 or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
1623 be effected; and
1624 (i) if the person is an individual:
1625 (A) the person's principal occupation;
1626 (B) a listing of all offices and positions held by the person during the past five years;
1627 and
1628 (C) any conviction of crimes other than minor traffic violations during the past 10
1629 years; and
1630 (ii) if the person is not an individual:
1631 (A) a report of the nature of its business operations during:
1632 (I) the past five years; or
1633 (II) for any lesser period as the person and any of its predecessors has been in
1634 existence;
1635 (B) an informative description of the business intended to be done by the person and
1636 the person's subsidiaries;
1637 (C) a list of all individuals who are or who have been selected to become directors or
1638 executive officers of the person, or individuals who perform, or who will perform functions
1639 appropriate to such positions; and
1640 (D) for each individual described in Subsection (2)(a)(ii)(C), the information required
1641 by Subsection (2)(a)(i) for each individual;
1642 (b) (i) the source, nature, and amount of the consideration used or to be used in
1643 effecting the merger or acquisition of control;
1644 (ii) a description of any transaction in which funds were or are to be obtained for the
1645 purpose of effecting the merger or acquisition of control, including any pledge of:
1646 (A) the insurer's stock; or
1647 (B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
1648 (iii) the identity of persons furnishing the consideration;
1649 (c) (i) fully audited financial information, or other financial information considered
1650 acceptable by the commissioner, of the earnings and financial condition of each acquiring party
1651 for:
1652 (A) the preceding five fiscal years of each acquiring party; or
1653 (B) any lesser period the acquiring party and any of its predecessors shall have been in
1654 existence; and
1655 (ii) unaudited information:
1656 (A) similar to the information described in Subsection (2)(c)(i); and
1657 (B) prepared within the 90 days prior to the filing of the statement;
1658 (d) any plans or proposals which each acquiring party may have to:
1659 (i) liquidate the insurer;
1660 (ii) sell its assets;
1661 (iii) merge or consolidate the insurer with any person; or
1662 (iv) make any other material change in the insurer's:
1663 (A) business;
1664 (B) corporate structure; or
1665 (C) management;
1666 (e) (i) the number of shares of any security referred to in Subsection (1) that each
1667 acquiring party proposes to acquire;
1668 (ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
1669 Subsection (1); and
1670 (iii) a statement as to the method by which the fairness of the proposal was arrived at;
1671 (f) the amount of each class of any security referred to in Subsection (1) that:
1672 (i) is beneficially owned; or
1673 (ii) concerning which there is a right to acquire beneficial ownership by each acquiring
1674 party;
1675 (g) a full description of any contract, arrangement, or understanding with respect to any
1676 security referred to in Subsection (1) in which any acquiring party is involved, including:
1677 (i) the transfer of any of the securities;
1678 (ii) joint ventures;
1679 (iii) loan or option arrangements;
1680 (iv) puts or calls;
1681 (v) guarantees of loans;
1682 (vi) guarantees against loss or guarantees of profits;
1683 (vii) division of losses or profits; or
1684 (viii) the giving or withholding of proxies;
1685 (h) a description of the purchase by any acquiring party of any security referred to in
1686 Subsection (1) during the 12 calendar months preceding the filing of the statement including:
1687 (i) the dates of purchase;
1688 (ii) the names of the purchasers; and
1689 (iii) the consideration paid or agreed to be paid for the purchase;
1690 (i) a description of:
1691 (i) any recommendations to purchase by any acquiring party any security referred to in
1692 Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
1693 (ii) any recommendations made by anyone based upon interviews or at the suggestion
1694 of the acquiring party;
1695 (j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
1696 offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
1697 and
1698 (ii) if distributed, copies of additional soliciting material relating to the transactions
1699 described in Subsection (2)(j)(i);
1700 (k) (i) the term of any agreement, contract, or understanding made with, or proposed to
1701 be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
1702 tender; and
1703 (ii) the amount of any fees, commissions, or other compensation to be paid to
1704 broker-dealers with regard to any agreement, contract, or understanding described in
1705 Subsection (2)(k)(i); and
1706 (l) any additional information the commissioner requires by rule, which the
1707 commissioner determines to be:
1708 (i) necessary or appropriate for the protection of policyholders of the insurer; or
1709 (ii) in the public interest.
1710 (3) The department may request:
1711 (a) (i) criminal background information maintained pursuant to Title 53, Chapter 10,
1712 Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
1713 (ii) complete Federal Bureau of Investigation criminal background checks through the
1714 national criminal history system.
1715 (b) Information obtained by the department from the review of criminal history records
1716 received under Subsection (3)(a) shall be used by the department for the purpose of:
1717 (i) verifying the information in Subsection (2)(a)(i);
1718 (ii) determining the integrity of persons who would control the operation of an insurer;
1719 and
1720 (iii) preventing persons who violate 18 U.S.C. [
1721 engaging in the business of insurance in the state.
1722 (c) If the department requests the criminal background information, the department
1723 shall:
1724 (i) pay to the Department of Public Safety the costs incurred by the Department of
1725 Public Safety in providing the department criminal background information under Subsection
1726 (3)(a)(i);
1727 (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
1728 of Investigation in providing the department criminal background information under
1729 Subsection (3)(a)(ii); and
1730 (iii) charge the person required to file the statement referred to in Subsection (1) a fee
1731 equal to the aggregate of Subsections (3)(c)(i) and (ii).
1732 (4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
1733 the lender's ordinary course of business, the identity of the lender shall remain confidential, if
1734 the person filing the statement so requests.
1735 (b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
1736 adjusted book value assigned by the acquiring party to each security in arriving at the terms of
1737 the offer.
1738 (ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
1739 proportional interest in the capital and surplus of the insurer with adjustments that reflect:
1740 (A) market conditions;
1741 (B) business in force; and
1742 (C) other intangible assets or liabilities of the insurer.
1743 (c) The description required by Subsection (2)(g) shall identify the persons with whom
1744 the contracts, arrangements, or understandings have been entered into.
1745 (5) (a) If the person required to file the statement referred to in Subsection (1) is a
1746 partnership, limited partnership, syndicate, or other group, the commissioner may require that
1747 all the information called for by Subsections (2), (3), or (4) shall be given with respect to each:
1748 (i) partner of the partnership or limited partnership;
1749 (ii) member of the syndicate or group; and
1750 (iii) person who controls the partner or member.
1751 (b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
1752 or if the person required to file the statement referred to in Subsection (1) is a corporation, the
1753 commissioner may require that the information called for by Subsection (2) shall be given with
1754 respect to:
1755 (i) the corporation;
1756 (ii) each officer and director of the corporation; and
1757 (iii) each person who is directly or indirectly the beneficial owner of more than 10% of
1758 the outstanding voting securities of the corporation.
1759 (6) If any material change occurs in the facts set forth in the statement filed with the
1760 commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
1761 the change, together with copies of all documents and other material relevant to the change,
1762 shall be filed with the commissioner and sent to the insurer within two business days after the
1763 filing person learns of such change.
1764 (7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
1765 (1) is proposed to be made by means of a registration statement under the Securities Act of
1766 1933, or under circumstances requiring the disclosure of similar information under the
1767 Securities Exchange Act of 1934, or under a state law requiring similar registration or
1768 disclosure, a person required to file the statement referred to in Subsection (1) may use copies
1769 of any registration or disclosure documents in furnishing the information called for by the
1770 statement.
1771 (8) (a) The commissioner shall approve any merger or other acquisition of control
1772 referred to in Subsection (1) unless, after a public hearing on the merger or acquisition, the
1773 commissioner finds that:
1774 (i) after the change of control, the domestic insurer referred to in Subsection (1) would
1775 not be able to satisfy the requirements for the issuance of a license to write the line or lines of
1776 insurance for which it is presently licensed;
1777 (ii) the effect of the merger or other acquisition of control would:
1778 (A) substantially lessen competition in insurance in this state; or
1779 (B) tend to create a monopoly in insurance;
1780 (iii) the financial condition of any acquiring party might:
1781 (A) jeopardize the financial stability of the insurer; or
1782 (B) prejudice the interest of:
1783 (I) its policyholders; or
1784 (II) any remaining securityholders who are unaffiliated with the acquiring party;
1785 (iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
1786 Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
1787 (v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
1788 assets, or consolidate or merge it with any person, or to make any other material change in its
1789 business or corporate structure or management, are:
1790 (A) unfair and unreasonable to policyholders of the insurer; and
1791 (B) not in the public interest; or
1792 (vi) the competence, experience, and integrity of those persons who would control the
1793 operation of the insurer are such that it would not be in the interest of the policyholders of the
1794 insurer and the public to permit the merger or other acquisition of control.
1795 (b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
1796 be considered unfair if the adjusted book values under Subsection (2)(e):
1797 (i) are disclosed to the securityholders; and
1798 (ii) determined by the commissioner to be reasonable.
1799 (9) (a) The public hearing referred to in Subsection (8) shall be held within 30 days
1800 after the statement required by Subsection (1) is filed.
1801 (b) (i) At least 20 days notice of the hearing shall be given by the commissioner to the
1802 person filing the statement.
1803 (ii) Affected parties may waive the notice required by this Subsection (9)(b).
1804 (iii) Not less than seven days notice of the public hearing shall be given by the person
1805 filing the statement to:
1806 (A) the insurer; and
1807 (B) any person designated by the commissioner.
1808 (c) The commissioner shall make a determination within 30 days after the conclusion
1809 of the hearing.
1810 (d) At the hearing, the person filing the statement, the insurer, any person to whom
1811 notice of hearing was sent, and any other person whose interest may be affected by the hearing
1812 may:
1813 (i) present evidence;
1814 (ii) examine and cross-examine witnesses; and
1815 (iii) offer oral and written arguments.
1816 (e) (i) A person or insurer described in Subsection (9)(d) may conduct discovery
1817 proceedings in the same manner as is presently allowed in the district courts of this state.
1818 (ii) All discovery proceedings shall be concluded not later than three days before the
1819 commencement of the public hearing.
1820 (10) (a) The commissioner may retain technical experts to assist in reviewing all, or a
1821 portion of, information filed in connection with a proposed merger or other acquisition of
1822 control referred to in Subsection (1).
1823 (b) In determining whether any of the conditions in Subsection (8) exist, the
1824 commissioner may consider the findings of technical experts employed to review applicable
1825 filings.
1826 (c) (i) A technical expert employed under Subsection (10)(a) shall present to the
1827 commissioner a statement of all expenses incurred by the technical expert in conjunction with
1828 the technical expert's review of a proposed merger or other acquisition of control.
1829 (ii) At the commissioner's direction the acquiring person shall compensate the technical
1830 expert at customary rates for time and expenses:
1831 (A) necessarily incurred; and
1832 (B) approved by the commissioner.
1833 (iii) The acquiring person shall:
1834 (A) certify the consolidated account of all charges and expenses incurred for the review
1835 by technical experts;
1836 (B) retain a copy of the consolidated account described in Subsection (10)(c)(iii)(A);
1837 and
1838 (C) file with the department as a public record a copy of the consolidated account
1839 described in Subsection (10)(c)(iii)(A).
1840 (11) (a) (i) If a domestic insurer proposes to merge into another insurer, any
1841 securityholder electing to exercise a right of dissent may file with the insurer a written request
1842 for payment of the adjusted book value given in the statement required by Subsection (1) and
1843 approved under Subsection (8), in return for the surrender of the security holder's securities.
1844 (ii) The request described in Subsection (11)(a)(i) shall be filed not later than 10 days
1845 after the day of the securityholders' meeting where the corporate action is approved.
1846 (b) The dissenting securityholder is entitled to and the insurer is required to pay to the
1847 dissenting securityholder the specified value within 60 days of receipt of the dissenting security
1848 holder's security.
1849 (c) Persons electing under this Subsection (11) to receive cash for their securities waive
1850 the dissenting shareholder and appraisal rights otherwise applicable under Title 16, Chapter
1851 10a, Part 13, Dissenters' Rights.
1852 (d) (i) This Subsection (11) provides an elective procedure for dissenting
1853 securityholders to resolve their objections to the plan of merger.
1854 (ii) This section does not restrict the rights of dissenting securityholders under Title 16,
1855 Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
1856 Subsection (11).
1857 (12) (a) All statements, amendments, or other material filed under Subsection (1), and
1858 all notices of public hearings held under Subsection (8), shall be mailed by the insurer to its
1859 securityholders within five business days after the insurer has received the statements,
1860 amendments, other material, or notices.
1861 (b) (i) Mailing expenses shall be paid by the person making the filing.
1862 (ii) As security for the payment of mailing expenses, that person shall file with the
1863 commissioner an acceptable bond or other deposit in an amount determined by the
1864 commissioner.
1865 (13) This section does not apply to any offer, request, invitation, agreement, or
1866 acquisition that the commissioner by order exempts from the requirements of this section as:
1867 (a) not having been made or entered into for the purpose of, and not having the effect
1868 of, changing or influencing the control of a domestic insurer; or
1869 (b) [
1870 (14) The following are violations of this section:
1871 (a) the failure to file any statement, amendment, or other material required to be filed
1872 pursuant to Subsections (1), (2), and (5); or
1873 (b) the effectuation, or any attempt to effectuate, an acquisition of control of or merger
1874 with a domestic insurer unless the commissioner has given the commissioner's approval to the
1875 acquisition or merger.
1876 (15) (a) The courts of this state are vested with jurisdiction over:
1877 (i) a person who:
1878 (A) files a statement with the commissioner under this section; and
1879 (B) is not resident, domiciled, or authorized to do business in this state; and
1880 (ii) overall actions involving persons described in Subsection (15)(a)(i) arising out of a
1881 violation of this section.
1882 (b) A person described in Subsection (15)(a) is considered to have performed acts
1883 equivalent to and constituting an appointment of the commissioner by that person, to be that
1884 person's lawful agent upon whom may be served all lawful process in any action, suit, or
1885 proceeding arising out of a violation of this section.
1886 (c) A copy of a lawful process described in Subsection (15)(b) shall be:
1887 (i) served on the commissioner; and
1888 (ii) transmitted by registered or certified mail by the commissioner to the person at that
1889 person's last-known address.
1890 Section 9. Section 31A-17-607 is amended to read:
1891 31A-17-607. Hearings.
1892 (1) (a) Following receipt of a notice described in Subsection (2), the insurer or health
1893 organization shall have the right to a confidential departmental hearing at which the insurer or
1894 health organization may challenge [
1895 (b) The insurer or health organization shall notify the commissioner of its request for a
1896 hearing within five days after the notification by the commissioner under [
1897
1898 (c) Upon receipt of the insurer's or health organization's request for a hearing, the
1899 commissioner shall set a date for the hearing, which date shall be no less than 10 nor more than
1900 30 days after the date of the insurer's or health organization's request.
1901 (2) An insurer or health organization has the right to a hearing under Subsection (1)
1902 after:
1903 (a) notification to an insurer or health organization by the commissioner of an adjusted
1904 RBC report;
1905 (b) notification to an insurer or health organization by the commissioner that:
1906 (i) the insurer's or health organization's RBC plan or revised RBC plan is
1907 unsatisfactory; and
1908 (ii) the notification constitutes a regulatory action level event with respect to the
1909 insurer or health organization;
1910 (c) notification to any insurer or health organization by the commissioner that the
1911 insurer or health organization has failed to adhere to its RBC plan or revised RBC plan and that
1912 the failure has substantial adverse effect on the ability of the insurer or health organization to
1913 eliminate the company action level event with respect to the insurer or health organization in
1914 accordance with its RBC plan or revised RBC plan; or
1915 (d) notification to an insurer or health organization by the commissioner of a corrective
1916 order with respect to the insurer or health organization.
1917 Section 10. Section 31A-22-305 is amended to read:
1918 31A-22-305. Uninsured motorist coverage.
1919 (1) As used in this section, "covered persons" includes:
1920 (a) the named insured;
1921 (b) for a claim arising on or after May 13, 2014, the named insured's dependent minor
1922 children;
1923 [
1924 guardianship, who are residents of the named insured's household, including those who usually
1925 make their home in the same household but temporarily live elsewhere;
1926 [
1927 (i) referred to in the policy; or
1928 (ii) owned by a self-insured; and
1929 [
1930 the uninsured or underinsured motor vehicle because of bodily injury to or death of persons
1931 under Subsection (1)(a), (b), [
1932 (2) As used in this section, "uninsured motor vehicle" includes:
1933 (a) (i) a motor vehicle, the operation, maintenance, or use of which is not covered
1934 under a liability policy at the time of an injury-causing occurrence; or
1935 (ii) (A) a motor vehicle covered with lower liability limits than required by Section
1936 31A-22-304 ; and
1937 (B) the motor vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of
1938 the deficiency;
1939 (b) an unidentified motor vehicle that left the scene of an accident proximately caused
1940 by the motor vehicle operator;
1941 (c) a motor vehicle covered by a liability policy, but coverage for an accident is
1942 disputed by the liability insurer for more than 60 days or continues to be disputed for more than
1943 60 days; or
1944 (d) (i) an insured motor vehicle if, before or after the accident, the liability insurer of
1945 the motor vehicle is declared insolvent by a court of competent jurisdiction; and
1946 (ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent
1947 that the claim against the insolvent insurer is not paid by a guaranty association or fund.
1948 (3) Uninsured motorist coverage under Subsection 31A-22-302 (1)(b) provides
1949 coverage for covered persons who are legally entitled to recover damages from owners or
1950 operators of uninsured motor vehicles because of bodily injury, sickness, disease, or death.
1951 (4) (a) For new policies written on or after January 1, 2001, the limits of uninsured
1952 motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
1953 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
1954 under the named insured's motor vehicle policy, unless a named insured rejects or purchases
1955 coverage in a lesser amount by signing an acknowledgment form that:
1956 (i) is filed with the department;
1957 (ii) is provided by the insurer;
1958 (iii) waives the higher coverage;
1959 (iv) need only state in this or similar language that uninsured motorist coverage
1960 provides benefits or protection to you and other covered persons for bodily injury resulting
1961 from an accident caused by the fault of another party where the other party has no liability
1962 insurance; and
1963 (v) discloses the additional premiums required to purchase uninsured motorist
1964 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
1965 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
1966 under the named insured's motor vehicle policy.
1967 (b) Any selection or rejection under this Subsection (4) continues for that issuer of the
1968 liability coverage until the insured requests, in writing, a change of uninsured motorist
1969 coverage from that liability insurer.
1970 (c) (i) Subsections (4)(a) and (b) apply retroactively to any claim arising on or after
1971 January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
1972 arbitration or filed a complaint in a court of competent jurisdiction.
1973 (ii) The Legislature finds that the retroactive application of Subsections (4)(a) and (b)
1974 clarifies legislative intent and does not enlarge, eliminate, or destroy vested rights.
1975 (d) For purposes of this Subsection (4), "new policy" means:
1976 (i) any policy that is issued which does not include a renewal or reinstatement of an
1977 existing policy; or
1978 (ii) a change to an existing policy that results in:
1979 (A) a named insured being added to or deleted from the policy; or
1980 (B) a change in the limits of the named insured's motor vehicle liability coverage.
1981 (e) (i) As used in this Subsection (4)(e), "additional motor vehicle" means a change
1982 that increases the total number of vehicles insured by the policy, and does not include
1983 replacement, substitute, or temporary vehicles.
1984 (ii) The adding of an additional motor vehicle to an existing personal lines or
1985 commercial lines policy does not constitute a new policy for purposes of Subsection (4)(d).
1986 (iii) If an additional motor vehicle is added to a personal lines policy where uninsured
1987 motorist coverage has been rejected, or where uninsured motorist limits are lower than the
1988 named insured's motor vehicle liability limits, the insurer shall provide a notice to a named
1989 insured within 30 days that:
1990 (A) in the same manner as described in Subsection (4)(a)(iv), explains the purpose of
1991 uninsured motorist coverage; and
1992 (B) encourages the named insured to contact the insurance company or insurance
1993 producer for quotes as to the additional premiums required to purchase uninsured motorist
1994 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
1995 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
1996 under the named insured's motor vehicle policy.
1997 (f) A change in policy number resulting from any policy change not identified under
1998 Subsection (4)(d)(ii) does not constitute a new policy.
1999 (g) (i) Subsection (4)(d) applies retroactively to any claim arising on or after January 1,
2000 2001, for which, as of May 1, 2012, an insured has not made a written demand for arbitration
2001 or filed a complaint in a court of competent jurisdiction.
2002 (ii) The Legislature finds that the retroactive application of Subsection (4):
2003 (A) does not enlarge, eliminate, or destroy vested rights; and
2004 (B) clarifies legislative intent.
2005 (h) A self-insured, including a governmental entity, may elect to provide uninsured
2006 motorist coverage in an amount that is less than its maximum self-insured retention under
2007 Subsections (4)(a) and (5)(a) by issuing a declaratory memorandum or policy statement from
2008 the chief financial officer or chief risk officer that declares the:
2009 (i) self-insured entity's coverage level; and
2010 (ii) process for filing an uninsured motorist claim.
2011 (i) Uninsured motorist coverage may not be sold with limits that are less than the
2012 minimum bodily injury limits for motor vehicle liability policies under Section 31A-22-304 .
2013 (j) The acknowledgment under Subsection (4)(a) continues for that issuer of the
2014 uninsured motorist coverage until the named insured requests, in writing, different uninsured
2015 motorist coverage from the insurer.
2016 (k) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
2017 policies existing on that date, the insurer shall disclose in the same medium as the premium
2018 renewal notice, an explanation of:
2019 (A) the purpose of uninsured motorist coverage in the same manner as described in
2020 Subsection (4)(a)(iv); and
2021 (B) a disclosure of the additional premiums required to purchase uninsured motorist
2022 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2023 liability coverage or the maximum uninsured motorist coverage limits available by the insurer
2024 under the named insured's motor vehicle policy.
2025 (ii) The disclosure required under Subsection (4)(k)(i) shall be sent to all named
2026 insureds that carry uninsured motorist coverage limits in an amount less than the named
2027 insured's motor vehicle liability policy limits or the maximum uninsured motorist coverage
2028 limits available by the insurer under the named insured's motor vehicle policy.
2029 (l) For purposes of this Subsection (4), a notice or disclosure sent to a named insured in
2030 a household constitutes notice or disclosure to all insureds within the household.
2031 (5) (a) (i) Except as provided in Subsection (5)(b), the named insured may reject
2032 uninsured motorist coverage by an express writing to the insurer that provides liability
2033 coverage under Subsection 31A-22-302 (1)(a).
2034 (ii) This rejection shall be on a form provided by the insurer that includes a reasonable
2035 explanation of the purpose of uninsured motorist coverage.
2036 (iii) This rejection continues for that issuer of the liability coverage until the insured in
2037 writing requests uninsured motorist coverage from that liability insurer.
2038 (b) (i) All persons, including governmental entities, that are engaged in the business of,
2039 or that accept payment for, transporting natural persons by motor vehicle, and all school
2040 districts that provide transportation services for their students, shall provide coverage for all
2041 motor vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,
2042 uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.
2043 (ii) This coverage is secondary to any other insurance covering an injured covered
2044 person.
2045 (c) Uninsured motorist coverage:
2046 (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
2047 Compensation Act;
2048 (ii) may not be subrogated by the workers' compensation insurance carrier;
2049 (iii) may not be reduced by any benefits provided by workers' compensation insurance;
2050 (iv) may be reduced by health insurance subrogation only after the covered person has
2051 been made whole;
2052 (v) may not be collected for bodily injury or death sustained by a person:
2053 (A) while committing a violation of Section 41-1a-1314 ;
2054 (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
2055 in violation of Section 41-1a-1314 ; or
2056 (C) while committing a felony; and
2057 (vi) notwithstanding Subsection (5)(c)(v), may be recovered:
2058 (A) for a person under 18 years of age who is injured within the scope of Subsection
2059 (5)(c)(v) but limited to medical and funeral expenses; or
2060 (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
2061 within the course and scope of the law enforcement officer's duties.
2062 (d) As used in this Subsection (5), "motor vehicle" has the same meaning as under
2063 Section 41-1a-102 .
2064 (6) When a covered person alleges that an uninsured motor vehicle under Subsection
2065 (2)(b) proximately caused an accident without touching the covered person or the motor
2066 vehicle occupied by the covered person, the covered person shall show the existence of the
2067 uninsured motor vehicle by clear and convincing evidence consisting of more than the covered
2068 person's testimony.
2069 (7) (a) The limit of liability for uninsured motorist coverage for two or more motor
2070 vehicles may not be added together, combined, or stacked to determine the limit of insurance
2071 coverage available to an injured person for any one accident.
2072 (b) (i) Subsection (7)(a) applies to all persons except a covered person as defined under
2073 Subsection (8)(b)(ii).
2074 (ii) A covered person as defined under Subsection (8)(b)(ii) is entitled to the highest
2075 limits of uninsured motorist coverage afforded for any one motor vehicle that the covered
2076 person is the named insured or an insured family member.
2077 (iii) This coverage shall be in addition to the coverage on the motor vehicle the covered
2078 person is occupying.
2079 (iv) Neither the primary nor the secondary coverage may be set off against the other.
2080 (c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
2081 coverage, and the coverage elected by a person described under Subsections (1)(a) [
2082 and (c) shall be secondary coverage.
2083 (8) (a) Uninsured motorist coverage under this section applies to bodily injury,
2084 sickness, disease, or death of covered persons while occupying or using a motor vehicle only if
2085 the motor vehicle is described in the policy under which a claim is made, or if the motor
2086 vehicle is a newly acquired or replacement motor vehicle covered under the terms of the policy.
2087 Except as provided in Subsection (7) or this Subsection (8), a covered person injured in a
2088 motor vehicle described in a policy that includes uninsured motorist benefits may not elect to
2089 collect uninsured motorist coverage benefits from any other motor vehicle insurance policy
2090 under which the person is a covered person.
2091 (b) Each of the following persons may also recover uninsured motorist benefits under
2092 any one other policy in which they are described as a "covered person" as defined in Subsection
2093 (1):
2094 (i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
2095 (ii) except as provided in Subsection (8)(c), a covered person injured while occupying
2096 or using a motor vehicle that is not owned, leased, or furnished:
2097 (A) to the covered person;
2098 (B) to the covered person's spouse; or
2099 (C) to the covered person's resident parent or resident sibling.
2100 (c) (i) A covered person may recover benefits from no more than two additional
2101 policies, one additional policy from each parent's household if the covered person is:
2102 (A) a dependent minor of parents who reside in separate households; and
2103 (B) injured while occupying or using a motor vehicle that is not owned, leased, or
2104 furnished:
2105 (I) to the covered person;
2106 (II) to the covered person's resident parent; or
2107 (III) to the covered person's resident sibling.
2108 (ii) Each parent's policy under this Subsection (8)(c) is liable only for the percentage of
2109 the damages that the limit of liability of each parent's policy of uninsured motorist coverage
2110 bears to the total of both parents' uninsured coverage applicable to the accident.
2111 (d) A covered person's recovery under any available policies may not exceed the full
2112 amount of damages.
2113 (e) A covered person in Subsection (8)(b) is not barred against making subsequent
2114 elections if recovery is unavailable under previous elections.
2115 (f) (i) As used in this section, "interpolicy stacking" means recovering benefits for a
2116 single incident of loss under more than one insurance policy.
2117 (ii) Except to the extent permitted by Subsection (7) and this Subsection (8),
2118 interpolicy stacking is prohibited for uninsured motorist coverage.
2119 (9) (a) When a claim is brought by a named insured or a person described in
2120 Subsection (1) and is asserted against the covered person's uninsured motorist carrier, the
2121 claimant may elect to resolve the claim:
2122 (i) by submitting the claim to binding arbitration; or
2123 (ii) through litigation.
2124 (b) Unless otherwise provided in the policy under which uninsured benefits are
2125 claimed, the election provided in Subsection (9)(a) is available to the claimant only, except that
2126 if the policy under which insured benefits are claimed provides that either an insured or the
2127 insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
2128 arbitrate shall stay the litigation of the claim under Subsection (9)(a)(ii).
2129 (c) Once the claimant has elected to commence litigation under Subsection (9)(a)(ii),
2130 the claimant may not elect to resolve the claim through binding arbitration under this section
2131 without the written consent of the uninsured motorist carrier.
2132 (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
2133 binding arbitration under Subsection (9)(a)(i) shall be resolved by a single arbitrator.
2134 (ii) All parties shall agree on the single arbitrator selected under Subsection (9)(d)(i).
2135 (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
2136 (9)(d)(ii), the parties shall select a panel of three arbitrators.
2137 (e) If the parties select a panel of three arbitrators under Subsection (9)(d)(iii):
2138 (i) each side shall select one arbitrator; and
2139 (ii) the arbitrators appointed under Subsection (9)(e)(i) shall select one additional
2140 arbitrator to be included in the panel.
2141 (f) Unless otherwise agreed to in writing:
2142 (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
2143 under Subsection (9)(d)(i); or
2144 (ii) if an arbitration panel is selected under Subsection (9)(d)(iii):
2145 (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
2146 (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
2147 under Subsection (9)(e)(ii).
2148 (g) Except as otherwise provided in this section or unless otherwise agreed to in
2149 writing by the parties, an arbitration proceeding conducted under this section shall be governed
2150 by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
2151 (h) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f),
2152 27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of
2153 Subsections (10)(a) through (c) are satisfied.
2154 (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
2155 shall be determined based on the claimant's specific monetary amount in the written demand
2156 for payment of uninsured motorist coverage benefits as required in Subsection (10)(a)(i)(A).
2157 (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
2158 arbitration claims under this part.
2159 (i) All issues of discovery shall be resolved by the arbitrator or the arbitration panel.
2160 (j) A written decision by a single arbitrator or by a majority of the arbitration panel
2161 shall constitute a final decision.
2162 (k) (i) Except as provided in Subsection (10), the amount of an arbitration award may
2163 not exceed the uninsured motorist policy limits of all applicable uninsured motorist policies,
2164 including applicable uninsured motorist umbrella policies.
2165 (ii) If the initial arbitration award exceeds the uninsured motorist policy limits of all
2166 applicable uninsured motorist policies, the arbitration award shall be reduced to an amount
2167 equal to the combined uninsured motorist policy limits of all applicable uninsured motorist
2168 policies.
2169 (l) The arbitrator or arbitration panel may not decide the issues of coverage or
2170 extra-contractual damages, including:
2171 (i) whether the claimant is a covered person;
2172 (ii) whether the policy extends coverage to the loss; or
2173 (iii) any allegations or claims asserting consequential damages or bad faith liability.
2174 (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
2175 class-representative basis.
2176 (n) If the arbitrator or arbitration panel finds that the action was not brought, pursued,
2177 or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
2178 and costs against the party that failed to bring, pursue, or defend the claim in good faith.
2179 (o) An arbitration award issued under this section shall be the final resolution of all
2180 claims not excluded by Subsection (9)(l) between the parties unless:
2181 (i) the award was procured by corruption, fraud, or other undue means;
2182 (ii) either party, within 20 days after service of the arbitration award:
2183 (A) files a complaint requesting a trial de novo in the district court; and
2184 (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
2185 under Subsection (9)(o)(ii)(A).
2186 (p) (i) Upon filing a complaint for a trial de novo under Subsection (9)(o), the claim
2187 shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules
2188 of Evidence in the district court.
2189 (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
2190 request a jury trial with a complaint requesting a trial de novo under Subsection (9)(o)(ii)(A).
2191 (q) (i) If the claimant, as the moving party in a trial de novo requested under
2192 Subsection (9)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
2193 than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
2194 (ii) If the uninsured motorist carrier, as the moving party in a trial de novo requested
2195 under Subsection (9)(o), does not obtain a verdict that is at least 20% less than the arbitration
2196 award, the uninsured motorist carrier is responsible for all of the nonmoving party's costs.
2197 (iii) Except as provided in Subsection (9)(q)(iv), the costs under this Subsection (9)(q)
2198 shall include:
2199 (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
2200 (B) the costs of expert witnesses and depositions.
2201 (iv) An award of costs under this Subsection (9)(q) may not exceed $2,500 unless
2202 Subsection (10)(h)(iii) applies.
2203 (r) For purposes of determining whether a party's verdict is greater or less than the
2204 arbitration award under Subsection (9)(q), a court may not consider any recovery or other relief
2205 granted on a claim for damages if the claim for damages:
2206 (i) was not fully disclosed in writing prior to the arbitration proceeding; or
2207 (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
2208 Procedure.
2209 (s) If a district court determines, upon a motion of the nonmoving party, that the
2210 moving party's use of the trial de novo process was filed in bad faith in accordance with
2211 Section 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving
2212 party.
2213 (t) Nothing in this section is intended to limit any claim under any other portion of an
2214 applicable insurance policy.
2215 (u) If there are multiple uninsured motorist policies, as set forth in Subsection (8), the
2216 claimant may elect to arbitrate in one hearing the claims against all the uninsured motorist
2217 carriers.
2218 (10) (a) Within 30 days after a covered person elects to submit a claim for uninsured
2219 motorist benefits to binding arbitration or files litigation, the covered person shall provide to
2220 the uninsured motorist carrier:
2221 (i) a written demand for payment of uninsured motorist coverage benefits, setting forth:
2222 (A) subject to Subsection (10)(l), the specific monetary amount of the demand,
2223 including a computation of the covered person's claimed past medical expenses, claimed past
2224 lost wages, and the other claimed past economic damages; and
2225 (B) the factual and legal basis and any supporting documentation for the demand;
2226 (ii) a written statement under oath disclosing:
2227 (A) (I) the names and last known addresses of all health care providers who have
2228 rendered health care services to the covered person that are material to the claims for which
2229 uninsured motorist benefits are sought for a period of five years preceding the date of the event
2230 giving rise to the claim for uninsured motorist benefits up to the time the election for
2231 arbitration or litigation has been exercised; and
2232 (II) [
2233 the health care providers who have rendered health care services to the covered person, which
2234 the covered person claims are immaterial to the claims for which uninsured motorist benefits
2235 are sought, for a period of five years preceding the date of the event giving rise to the claim for
2236 uninsured motorist benefits up to the time the election for arbitration or litigation has been
2237 exercised that have not been disclosed under Subsection (10)(a)(ii)(A)(I);
2238 (B) (I) the names and last known addresses of all health insurers or other entities to
2239 whom the covered person has submitted claims for health care services or benefits material to
2240 the claims for which uninsured motorist benefits are sought, for a period of five years
2241 preceding the date of the event giving rise to the claim for uninsured motorist benefits up to the
2242 time the election for arbitration or litigation has been exercised; and
2243 (II) [
2244 insurers or other entities to whom the covered person has submitted claims for health care
2245 services or benefits, which the covered person claims are immaterial to the claims for which
2246 uninsured motorist benefits are sought, for a period of five years preceding the date of the event
2247 giving rise to the claim for uninsured motorist benefits up to the time the election for
2248 arbitration or litigation have not been disclosed;
2249 (C) if lost wages, diminished earning capacity, or similar damages are claimed, all
2250 employers of the covered person for a period of five years preceding the date of the event
2251 giving rise to the claim for uninsured motorist benefits up to the time the election for
2252 arbitration or litigation has been exercised;
2253 (D) other documents to reasonably support the claims being asserted; and
2254 (E) all state and federal statutory lienholders including a statement as to whether the
2255 covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
2256 Insurance Program benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act,
2257 or if the claim is subject to any other state or federal statutory liens; and
2258 (iii) signed authorizations to allow the uninsured motorist carrier to only obtain records
2259 and billings from the individuals or entities disclosed under Subsections (10)(a)(ii)(A)(I),
2260 (B)(I), and (C).
2261 (b) (i) If the uninsured motorist carrier determines that the disclosure of undisclosed
2262 health care providers or health care insurers under Subsection (10)(a)(ii) is reasonably
2263 necessary, the uninsured motorist carrier may:
2264 (A) make a request for the disclosure of the identity of the health care providers or
2265 health care insurers; and
2266 (B) make a request for authorizations to allow the uninsured motorist carrier to only
2267 obtain records and billings from the individuals or entities not disclosed.
2268 (ii) If the covered person does not provide the requested information within 10 days:
2269 (A) the covered person shall disclose, in writing, the legal or factual basis for the
2270 failure to disclose the health care providers or health care insurers; and
2271 (B) either the covered person or the uninsured motorist carrier may request the
2272 arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
2273 provided if the covered person has elected arbitration.
2274 (iii) The time periods imposed by Subsection (10)(c)(i) are tolled pending resolution of
2275 the dispute concerning the disclosure and production of records of the health care providers or
2276 health care insurers.
2277 (c) (i) An uninsured motorist carrier that receives an election for arbitration or a notice
2278 of filing litigation and the demand for payment of uninsured motorist benefits under Subsection
2279 (10)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the demand and
2280 receipt of the items specified in Subsections (10)(a)(i) through (iii), to:
2281 (A) provide a written response to the written demand for payment provided for in
2282 Subsection (10)(a)(i);
2283 (B) except as provided in Subsection (10)(c)(i)(C), tender the amount, if any, of the
2284 uninsured motorist carrier's determination of the amount owed to the covered person; and
2285 (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
2286 Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
2287 Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
2288 tender the amount, if any, of the uninsured motorist carrier's determination of the amount owed
2289 to the covered person less:
2290 (I) if the amount of the state or federal statutory lien is established, the amount of the
2291 lien; or
2292 (II) if the amount of the state or federal statutory lien is not established, two times the
2293 amount of the medical expenses subject to the state or federal statutory lien until such time as
2294 the amount of the state or federal statutory lien is established.
2295 (ii) If the amount tendered by the uninsured motorist carrier under Subsection (10)(c)(i)
2296 is the total amount of the uninsured motorist policy limits, the tendered amount shall be
2297 accepted by the covered person.
2298 (d) A covered person who receives a written response from an uninsured motorist
2299 carrier as provided for in Subsection (10)(c)(i), may:
2300 (i) elect to accept the amount tendered in Subsection (10)(c)(i) as payment in full of all
2301 uninsured motorist claims; or
2302 (ii) elect to:
2303 (A) accept the amount tendered in Subsection (10)(c)(i) as partial payment of all
2304 uninsured motorist claims; and
2305 (B) continue to litigate or arbitrate the remaining claim in accordance with the election
2306 made under Subsections (9)(a), (b), and (c).
2307 (e) If a covered person elects to accept the amount tendered under Subsection (10)(c)(i)
2308 as partial payment of all uninsured motorist claims, the final award obtained through
2309 arbitration, litigation, or later settlement shall be reduced by any payment made by the
2310 uninsured motorist carrier under Subsection (10)(c)(i).
2311 (f) In an arbitration proceeding on the remaining uninsured claims:
2312 (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
2313 under Subsection (10)(c)(i) until after the arbitration award has been rendered; and
2314 (ii) the parties may not disclose the amount of the limits of uninsured motorist benefits
2315 provided by the policy.
2316 (g) If the final award obtained through arbitration or litigation is greater than the
2317 average of the covered person's initial written demand for payment provided for in Subsection
2318 (10)(a)(i) and the uninsured motorist carrier's initial written response provided for in
2319 Subsection (10)(c)(i), the uninsured motorist carrier shall pay:
2320 (i) the final award obtained through arbitration or litigation, except that if the award
2321 exceeds the policy limits of the subject uninsured motorist policy by more than $15,000, the
2322 amount shall be reduced to an amount equal to the policy limits plus $15,000; and
2323 (ii) any of the following applicable costs:
2324 (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
2325 (B) the arbitrator or arbitration panel's fee; and
2326 (C) the reasonable costs of expert witnesses and depositions used in the presentation of
2327 evidence during arbitration or litigation.
2328 (h) (i) The covered person shall provide an affidavit of costs within five days of an
2329 arbitration award.
2330 (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
2331 which the uninsured motorist carrier objects.
2332 (B) The objection shall be resolved by the arbitrator or arbitration panel.
2333 (iii) The award of costs by the arbitrator or arbitration panel under Subsection
2334 (10)(g)(ii) may not exceed $5,000.
2335 (i) (i) A covered person shall disclose all material information, other than rebuttal
2336 evidence, within 30 days after a covered person elects to submit a claim for uninsured motorist
2337 coverage benefits to binding arbitration or files litigation as specified in Subsection (10)(a).
2338 (ii) If the information under Subsection (10)(i)(i) is not disclosed, the covered person
2339 may not recover costs or any amounts in excess of the policy under Subsection (10)(g).
2340 (j) This Subsection (10) does not limit any other cause of action that arose or may arise
2341 against the uninsured motorist carrier from the same dispute.
2342 (k) The provisions of this Subsection (10) only apply to motor vehicle accidents that
2343 occur on or after March 30, 2010.
2344 (l) (i) The written demand requirement in Subsection (10)(a)(i)(A) does not affect the
2345 covered person's requirement to provide a computation of any other economic damages
2346 claimed, and the one or more respondents shall have a reasonable time after the receipt of the
2347 computation of any other economic damages claimed to conduct fact and expert discovery as
2348 to any additional damages claimed. The changes made by this bill to this Subsection (10)(l)
2349 and Subsection (10)(a)(i)(A) apply to a claim submitted to binding arbitration or through
2350 litigation on or after May 13, 2014.
2351 (ii) The changes made by this bill to Subsections (10)(a)(ii)(A)(II) and (B)(II) apply to
2352 any claim submitted to binding arbitration or through litigation on or after May 13, 2014.
2353 Section 11. Section 31A-22-305.3 is amended to read:
2354 31A-22-305.3. Underinsured motorist coverage.
2355 (1) As used in this section:
2356 (a) "Covered person" has the same meaning as defined in Section 31A-22-305 .
2357 (b) (i) "Underinsured motor vehicle" includes a motor vehicle, the operation,
2358 maintenance, or use of which is covered under a liability policy at the time of an injury-causing
2359 occurrence, but which has insufficient liability coverage to compensate fully the injured party
2360 for all special and general damages.
2361 (ii) The term "underinsured motor vehicle" does not include:
2362 (A) a motor vehicle that is covered under the liability coverage of the same policy that
2363 also contains the underinsured motorist coverage;
2364 (B) an uninsured motor vehicle as defined in Subsection 31A-22-305 (2); or
2365 (C) a motor vehicle owned or leased by:
2366 (I) a named insured;
2367 (II) a named insured's spouse; or
2368 (III) a dependent of a named insured.
2369 (2) (a) Underinsured motorist coverage under Subsection 31A-22-302 (1)(c) provides
2370 coverage for a covered person who is legally entitled to recover damages from an owner or
2371 operator of an underinsured motor vehicle because of bodily injury, sickness, disease, or death.
2372 (b) A covered person occupying or using a motor vehicle owned, leased, or furnished
2373 to the covered person, the covered person's spouse, or covered person's resident relative may
2374 recover underinsured benefits only if the motor vehicle is:
2375 (i) described in the policy under which a claim is made; or
2376 (ii) a newly acquired or replacement motor vehicle covered under the terms of the
2377 policy.
2378 (3) (a) For new policies written on or after January 1, 2001, the limits of underinsured
2379 motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
2380 liability coverage or the maximum underinsured motorist coverage limits available by the
2381 insurer under the named insured's motor vehicle policy, unless a named insured rejects or
2382 purchases coverage in a lesser amount by signing an acknowledgment form that:
2383 (i) is filed with the department;
2384 (ii) is provided by the insurer;
2385 (iii) waives the higher coverage;
2386 (iv) need only state in this or similar language that underinsured motorist coverage
2387 provides benefits or protection to you and other covered persons for bodily injury resulting
2388 from an accident caused by the fault of another party where the other party has insufficient
2389 liability insurance; and
2390 (v) discloses the additional premiums required to purchase underinsured motorist
2391 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2392 liability coverage or the maximum underinsured motorist coverage limits available by the
2393 insurer under the named insured's motor vehicle policy.
2394 (b) Any selection or rejection under Subsection (3)(a) continues for that issuer of the
2395 liability coverage until the insured requests, in writing, a change of underinsured motorist
2396 coverage from that liability insurer.
2397 (c) (i) Subsections (3)(a) and (b) apply retroactively to any claim arising on or after
2398 January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
2399 arbitration or filed a complaint in a court of competent jurisdiction.
2400 (ii) The Legislature finds that the retroactive application of Subsections (3)(a) and (b)
2401 clarifies legislative intent and does not enlarge, eliminate, or destroy vested rights.
2402 (d) For purposes of this Subsection (3), "new policy" means:
2403 (i) any policy that is issued which does not include a renewal or reinstatement of an
2404 existing policy; or
2405 (ii) a change to an existing policy that results in:
2406 (A) a named insured being added to or deleted from the policy; or
2407 (B) a change in the limits of the named insured's motor vehicle liability coverage.
2408 (e) (i) As used in this Subsection (3)(e), "additional motor vehicle" means a change
2409 that increases the total number of vehicles insured by the policy, and does not include
2410 replacement, substitute, or temporary vehicles.
2411 (ii) The adding of an additional motor vehicle to an existing personal lines or
2412 commercial lines policy does not constitute a new policy for purposes of Subsection (3)(d).
2413 (iii) If an additional motor vehicle is added to a personal lines policy where
2414 underinsured motorist coverage has been rejected, or where underinsured motorist limits are
2415 lower than the named insured's motor vehicle liability limits, the insurer shall provide a notice
2416 to a named insured within 30 days that:
2417 (A) in the same manner described in Subsection (3)(a)(iv), explains the purpose of
2418 underinsured motorist coverage; and
2419 (B) encourages the named insured to contact the insurance company or insurance
2420 producer for quotes as to the additional premiums required to purchase underinsured motorist
2421 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2422 liability coverage or the maximum underinsured motorist coverage limits available by the
2423 insurer under the named insured's motor vehicle policy.
2424 (f) A change in policy number resulting from any policy change not identified under
2425 Subsection (3)(d)(ii) does not constitute a new policy.
2426 (g) (i) Subsection (3)(d) applies retroactively to any claim arising on or after January 1,
2427 2001 for which, as of May 1, 2012, an insured has not made a written demand for arbitration or
2428 filed a complaint in a court of competent jurisdiction.
2429 (ii) The Legislature finds that the retroactive application of Subsection (3)(d):
2430 (A) does not enlarge, eliminate, or destroy vested rights; and
2431 (B) clarifies legislative intent.
2432 (h) A self-insured, including a governmental entity, may elect to provide underinsured
2433 motorist coverage in an amount that is less than its maximum self-insured retention under
2434 Subsections (3)(a) and (l) by issuing a declaratory memorandum or policy statement from the
2435 chief financial officer or chief risk officer that declares the:
2436 (i) self-insured entity's coverage level; and
2437 (ii) process for filing an underinsured motorist claim.
2438 (i) Underinsured motorist coverage may not be sold with limits that are less than:
2439 (i) $10,000 for one person in any one accident; and
2440 (ii) at least $20,000 for two or more persons in any one accident.
2441 (j) An acknowledgment under Subsection (3)(a) continues for that issuer of the
2442 underinsured motorist coverage until the named insured, in writing, requests different
2443 underinsured motorist coverage from the insurer.
2444 (k) (i) The named insured's underinsured motorist coverage, as described in Subsection
2445 (2), is secondary to the liability coverage of an owner or operator of an underinsured motor
2446 vehicle, as described in Subsection (1).
2447 (ii) Underinsured motorist coverage may not be set off against the liability coverage of
2448 the owner or operator of an underinsured motor vehicle, but shall be added to, combined with,
2449 or stacked upon the liability coverage of the owner or operator of the underinsured motor
2450 vehicle to determine the limit of coverage available to the injured person.
2451 (l) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
2452 policies existing on that date, the insurer shall disclose in the same medium as the premium
2453 renewal notice, an explanation of:
2454 (A) the purpose of underinsured motorist coverage in the same manner as described in
2455 Subsection (3)(a)(iv); and
2456 (B) a disclosure of the additional premiums required to purchase underinsured motorist
2457 coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
2458 liability coverage or the maximum underinsured motorist coverage limits available by the
2459 insurer under the named insured's motor vehicle policy.
2460 (ii) The disclosure required under this Subsection (3)(l) shall be sent to all named
2461 insureds that carry underinsured motorist coverage limits in an amount less than the named
2462 insured's motor vehicle liability policy limits or the maximum underinsured motorist coverage
2463 limits available by the insurer under the named insured's motor vehicle policy.
2464 (m) For purposes of this Subsection (3), a notice or disclosure sent to a named insured
2465 in a household constitutes notice or disclosure to all insureds within the household.
2466 (4) (a) (i) Except as provided in this Subsection (4), a covered person injured in a
2467 motor vehicle described in a policy that includes underinsured motorist benefits may not elect
2468 to collect underinsured motorist coverage benefits from another motor vehicle insurance policy.
2469 (ii) The limit of liability for underinsured motorist coverage for two or more motor
2470 vehicles may not be added together, combined, or stacked to determine the limit of insurance
2471 coverage available to an injured person for any one accident.
2472 (iii) Subsection (4)(a)(ii) applies to all persons except a covered person described
2473 under Subsections (4)(b)(i) and (ii).
2474 (b) (i) Except as provided in Subsection (4)(b)(ii), a covered person injured while
2475 occupying, using, or maintaining a motor vehicle that is not owned, leased, or furnished to the
2476 covered person, the covered person's spouse, or the covered person's resident parent or resident
2477 sibling, may also recover benefits under any one other policy under which the covered person is
2478 also a covered person.
2479 (ii) (A) A covered person may recover benefits from no more than two additional
2480 policies, one additional policy from each parent's household if the covered person is:
2481 (I) a dependent minor of parents who reside in separate households; and
2482 (II) injured while occupying or using a motor vehicle that is not owned, leased, or
2483 furnished to the covered person, the covered person's resident parent, or the covered person's
2484 resident sibling.
2485 (B) Each parent's policy under this Subsection (4)(b)(ii) is liable only for the
2486 percentage of the damages that the limit of liability of each parent's policy of underinsured
2487 motorist coverage bears to the total of both parents' underinsured coverage applicable to the
2488 accident.
2489 (iii) A covered person's recovery under any available policies may not exceed the full
2490 amount of damages.
2491 (iv) Underinsured coverage on a motor vehicle occupied at the time of an accident is
2492 primary coverage, and the coverage elected by a person described under Subsections
2493 31A-22-305 (1)(a) [
2494 (v) The primary and the secondary coverage may not be set off against the other.
2495 (vi) A covered person as described under Subsection (4)(b)(i) is entitled to the highest
2496 limits of underinsured motorist coverage under only one additional policy per household
2497 applicable to that covered person as a named insured, spouse, or relative.
2498 (vii) A covered injured person is not barred against making subsequent elections if
2499 recovery is unavailable under previous elections.
2500 (viii) (A) As used in this section, "interpolicy stacking" means recovering benefits for a
2501 single incident of loss under more than one insurance policy.
2502 (B) Except to the extent permitted by this Subsection (4), interpolicy stacking is
2503 prohibited for underinsured motorist coverage.
2504 (c) Underinsured motorist coverage:
2505 (i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
2506 Compensation Act;
2507 (ii) may not be subrogated by a workers' compensation insurance carrier;
2508 (iii) may not be reduced by benefits provided by workers' compensation insurance;
2509 (iv) may be reduced by health insurance subrogation only after the covered person is
2510 made whole;
2511 (v) may not be collected for bodily injury or death sustained by a person:
2512 (A) while committing a violation of Section 41-1a-1314 ;
2513 (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
2514 in violation of Section 41-1a-1314 ; or
2515 (C) while committing a felony; and
2516 (vi) notwithstanding Subsection (4)(c)(v), may be recovered:
2517 (A) for a person under 18 years of age who is injured within the scope of Subsection
2518 (4)(c)(v), but is limited to medical and funeral expenses; or
2519 (B) by a law enforcement officer as defined in Section 53-13-103 , who is injured
2520 within the course and scope of the law enforcement officer's duties.
2521 (5) The inception of the loss under Subsection 31A-21-313 (1) for underinsured
2522 motorist claims occurs upon the date of the last liability policy payment.
2523 (6) (a) Within five business days after notification that all liability insurers have
2524 tendered their liability policy limits, the underinsured carrier shall either:
2525 (i) waive any subrogation claim the underinsured carrier may have against the person
2526 liable for the injuries caused in the accident; or
2527 (ii) pay the insured an amount equal to the policy limits tendered by the liability carrier.
2528 (b) If neither option is exercised under Subsection (6)(a), the subrogation claim is
2529 considered to be waived by the underinsured carrier.
2530 (c) The notification under Subsection (6)(a) shall include:
2531 (i) the name, address, and phone number for all liability insurers;
2532 (ii) the liability insurers' liability policy limits; and
2533 (iii) the claim number associated with each liability insurer.
2534 (7) Except as otherwise provided in this section, a covered person may seek, subject to
2535 the terms and conditions of the policy, additional coverage under any policy:
2536 (a) that provides coverage for damages resulting from motor vehicle accidents; and
2537 (b) that is not required to conform to Section 31A-22-302 .
2538 (8) (a) When a claim is brought by a named insured or a person described in
2539 Subsection 31A-22-305 (1) and is asserted against the covered person's underinsured motorist
2540 carrier, the claimant may elect to resolve the claim:
2541 (i) by submitting the claim to binding arbitration; or
2542 (ii) through litigation.
2543 (b) Unless otherwise provided in the policy under which underinsured benefits are
2544 claimed, the election provided in Subsection (8)(a) is available to the claimant only, except that
2545 if the policy under which insured benefits are claimed provides that either an insured or the
2546 insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
2547 arbitrate shall stay the litigation of the claim under Subsection (8)(a)(ii).
2548 (c) Once a claimant elects to commence litigation under Subsection (8)(a)(ii), the
2549 claimant may not elect to resolve the claim through binding arbitration under this section
2550 without the written consent of the underinsured motorist coverage carrier.
2551 (d) (i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to
2552 binding arbitration under Subsection (8)(a)(i) shall be resolved by a single arbitrator.
2553 (ii) All parties shall agree on the single arbitrator selected under Subsection (8)(d)(i).
2554 (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
2555 (8)(d)(ii), the parties shall select a panel of three arbitrators.
2556 (e) If the parties select a panel of three arbitrators under Subsection (8)(d)(iii):
2557 (i) each side shall select one arbitrator; and
2558 (ii) the arbitrators appointed under Subsection (8)(e)(i) shall select one additional
2559 arbitrator to be included in the panel.
2560 (f) Unless otherwise agreed to in writing:
2561 (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
2562 under Subsection (8)(d)(i); or
2563 (ii) if an arbitration panel is selected under Subsection (8)(d)(iii):
2564 (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
2565 (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
2566 under Subsection (8)(e)(ii).
2567 (g) Except as otherwise provided in this section or unless otherwise agreed to in
2568 writing by the parties, an arbitration proceeding conducted under this section is governed by
2569 Title 78B, Chapter 11, Utah Uniform Arbitration Act.
2570 (h) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f),
2571 27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of
2572 Subsections (9)(a) through (c) are satisfied.
2573 (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
2574 shall be determined based on the claimant's specific monetary amount in the written demand
2575 for payment of uninsured motorist coverage benefits as required in Subsection (9)(a)(i)(A).
2576 (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
2577 arbitration claims under this part.
2578 (i) An issue of discovery shall be resolved by the arbitrator or the arbitration panel.
2579 (j) A written decision by a single arbitrator or by a majority of the arbitration panel
2580 constitutes a final decision.
2581 (k) (i) Except as provided in Subsection (9), the amount of an arbitration award may
2582 not exceed the underinsured motorist policy limits of all applicable underinsured motorist
2583 policies, including applicable underinsured motorist umbrella policies.
2584 (ii) If the initial arbitration award exceeds the underinsured motorist policy limits of all
2585 applicable underinsured motorist policies, the arbitration award shall be reduced to an amount
2586 equal to the combined underinsured motorist policy limits of all applicable underinsured
2587 motorist policies.
2588 (l) The arbitrator or arbitration panel may not decide an issue of coverage or
2589 extra-contractual damages, including:
2590 (i) whether the claimant is a covered person;
2591 (ii) whether the policy extends coverage to the loss; or
2592 (iii) an allegation or claim asserting consequential damages or bad faith liability.
2593 (m) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or
2594 class-representative basis.
2595 (n) If the arbitrator or arbitration panel finds that the arbitration is not brought, pursued,
2596 or defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees
2597 and costs against the party that failed to bring, pursue, or defend the arbitration in good faith.
2598 (o) An arbitration award issued under this section shall be the final resolution of all
2599 claims not excluded by Subsection (8)(l) between the parties unless:
2600 (i) the award is procured by corruption, fraud, or other undue means;
2601 (ii) either party, within 20 days after service of the arbitration award:
2602 (A) files a complaint requesting a trial de novo in the district court; and
2603 (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
2604 under Subsection (8)(o)(ii)(A).
2605 (p) (i) Upon filing a complaint for a trial de novo under Subsection (8)(o), a claim shall
2606 proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah Rules of
2607 Evidence in the district court.
2608 (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
2609 request a jury trial with a complaint requesting a trial de novo under Subsection (8)(o)(ii)(A).
2610 (q) (i) If the claimant, as the moving party in a trial de novo requested under
2611 Subsection (8)(o), does not obtain a verdict that is at least $5,000 and is at least 20% greater
2612 than the arbitration award, the claimant is responsible for all of the nonmoving party's costs.
2613 (ii) If the underinsured motorist carrier, as the moving party in a trial de novo requested
2614 under Subsection (8)(o), does not obtain a verdict that is at least 20% less than the arbitration
2615 award, the underinsured motorist carrier is responsible for all of the nonmoving party's costs.
2616 (iii) Except as provided in Subsection (8)(q)(iv), the costs under this Subsection (8)(q)
2617 shall include:
2618 (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
2619 (B) the costs of expert witnesses and depositions.
2620 (iv) An award of costs under this Subsection (8)(q) may not exceed $2,500 unless
2621 Subsection (9)(h)(iii) applies.
2622 (r) For purposes of determining whether a party's verdict is greater or less than the
2623 arbitration award under Subsection (8)(q), a court may not consider any recovery or other relief
2624 granted on a claim for damages if the claim for damages:
2625 (i) was not fully disclosed in writing prior to the arbitration proceeding; or
2626 (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
2627 Procedure.
2628 (s) If a district court determines, upon a motion of the nonmoving party, that a moving
2629 party's use of the trial de novo process is filed in bad faith in accordance with Section
2630 78B-5-825 , the district court may award reasonable attorney fees to the nonmoving party.
2631 (t) Nothing in this section is intended to limit a claim under another portion of an
2632 applicable insurance policy.
2633 (u) If there are multiple underinsured motorist policies, as set forth in Subsection (4),
2634 the claimant may elect to arbitrate in one hearing the claims against all the underinsured
2635 motorist carriers.
2636 (9) (a) Within 30 days after a covered person elects to submit a claim for underinsured
2637 motorist benefits to binding arbitration or files litigation, the covered person shall provide to
2638 the underinsured motorist carrier:
2639 (i) a written demand for payment of underinsured motorist coverage benefits, setting
2640 forth:
2641 (A) subject to Subsection (9)(l), the specific monetary amount of the demand,
2642 including a computation of the covered person's claimed past medical expenses, claimed past
2643 lost wages, and all other claimed past economic damages; and
2644 (B) the factual and legal basis and any supporting documentation for the demand;
2645 (ii) a written statement under oath disclosing:
2646 (A) (I) the names and last known addresses of all health care providers who have
2647 rendered health care services to the covered person that are material to the claims for which the
2648 underinsured motorist benefits are sought for a period of five years preceding the date of the
2649 event giving rise to the claim for underinsured motorist benefits up to the time the election for
2650 arbitration or litigation has been exercised; and
2651 (II) [
2652 the health care providers who have rendered health care services to the covered person, which
2653 the covered person claims are immaterial to the claims for which underinsured motorist
2654 benefits are sought, for a period of five years preceding the date of the event giving rise to the
2655 claim for underinsured motorist benefits up to the time the election for arbitration or litigation
2656 has been exercised that have not been disclosed under Subsection (9)(a)(ii)(A)(I);
2657 (B) (I) the names and last known addresses of all health insurers or other entities to
2658 whom the covered person has submitted claims for health care services or benefits material to
2659 the claims for which underinsured motorist benefits are sought, for a period of five years
2660 preceding the date of the event giving rise to the claim for underinsured motorist benefits up to
2661 the time the election for arbitration or litigation has been exercised; and
2662 (II) [
2663 insurers or other entities to whom the covered person has submitted claims for health care
2664 services or benefits, which the covered person claims are immaterial to the claims for which
2665 underinsured motorist benefits are sought, for a period of five years preceding the date of the
2666 event giving rise to the claim for underinsured motorist benefits up to the time the election for
2667 arbitration or litigation have not been disclosed;
2668 (C) if lost wages, diminished earning capacity, or similar damages are claimed, all
2669 employers of the covered person for a period of five years preceding the date of the event
2670 giving rise to the claim for underinsured motorist benefits up to the time the election for
2671 arbitration or litigation has been exercised;
2672 (D) other documents to reasonably support the claims being asserted; and
2673 (E) all state and federal statutory lienholders including a statement as to whether the
2674 covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
2675 Insurance Program benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act,
2676 or if the claim is subject to any other state or federal statutory liens; and
2677 (iii) signed authorizations to allow the underinsured motorist carrier to only obtain
2678 records and billings from the individuals or entities disclosed under Subsections
2679 (9)(a)(ii)(A)(I), (B)(I), and (C).
2680 (b) (i) If the underinsured motorist carrier determines that the disclosure of undisclosed
2681 health care providers or health care insurers under Subsection (9)(a)(ii) is reasonably necessary,
2682 the underinsured motorist carrier may:
2683 (A) make a request for the disclosure of the identity of the health care providers or
2684 health care insurers; and
2685 (B) make a request for authorizations to allow the underinsured motorist carrier to only
2686 obtain records and billings from the individuals or entities not disclosed.
2687 (ii) If the covered person does not provide the requested information within 10 days:
2688 (A) the covered person shall disclose, in writing, the legal or factual basis for the
2689 failure to disclose the health care providers or health care insurers; and
2690 (B) either the covered person or the underinsured motorist carrier may request the
2691 arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
2692 provided if the covered person has elected arbitration.
2693 (iii) The time periods imposed by Subsection (9)(c)(i) are tolled pending resolution of
2694 the dispute concerning the disclosure and production of records of the health care providers or
2695 health care insurers.
2696 (c) (i) An underinsured motorist carrier that receives an election for arbitration or a
2697 notice of filing litigation and the demand for payment of underinsured motorist benefits under
2698 Subsection (9)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the
2699 demand and receipt of the items specified in Subsections (9)(a)(i) through (iii), to:
2700 (A) provide a written response to the written demand for payment provided for in
2701 Subsection (9)(a)(i);
2702 (B) except as provided in Subsection (9)(c)(i)(C), tender the amount, if any, of the
2703 underinsured motorist carrier's determination of the amount owed to the covered person; and
2704 (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
2705 Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
2706 Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
2707 tender the amount, if any, of the underinsured motorist carrier's determination of the amount
2708 owed to the covered person less:
2709 (I) if the amount of the state or federal statutory lien is established, the amount of the
2710 lien; or
2711 (II) if the amount of the state or federal statutory lien is not established, two times the
2712 amount of the medical expenses subject to the state or federal statutory lien until such time as
2713 the amount of the state or federal statutory lien is established.
2714 (ii) If the amount tendered by the underinsured motorist carrier under Subsection
2715 (9)(c)(i) is the total amount of the underinsured motorist policy limits, the tendered amount
2716 shall be accepted by the covered person.
2717 (d) A covered person who receives a written response from an underinsured motorist
2718 carrier as provided for in Subsection (9)(c)(i), may:
2719 (i) elect to accept the amount tendered in Subsection (9)(c)(i) as payment in full of all
2720 underinsured motorist claims; or
2721 (ii) elect to:
2722 (A) accept the amount tendered in Subsection (9)(c)(i) as partial payment of all
2723 underinsured motorist claims; and
2724 (B) continue to litigate or arbitrate the remaining claim in accordance with the election
2725 made under Subsections (8)(a), (b), and (c).
2726 (e) If a covered person elects to accept the amount tendered under Subsection (9)(c)(i)
2727 as partial payment of all underinsured motorist claims, the final award obtained through
2728 arbitration, litigation, or later settlement shall be reduced by any payment made by the
2729 underinsured motorist carrier under Subsection (9)(c)(i).
2730 (f) In an arbitration proceeding on the remaining underinsured claims:
2731 (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
2732 under Subsection (9)(c)(i) until after the arbitration award has been rendered; and
2733 (ii) the parties may not disclose the amount of the limits of underinsured motorist
2734 benefits provided by the policy.
2735 (g) If the final award obtained through arbitration or litigation is greater than the
2736 average of the covered person's initial written demand for payment provided for in Subsection
2737 (9)(a)(i) and the underinsured motorist carrier's initial written response provided for in
2738 Subsection (9)(c)(i), the underinsured motorist carrier shall pay:
2739 (i) the final award obtained through arbitration or litigation, except that if the award
2740 exceeds the policy limits of the subject underinsured motorist policy by more than $15,000, the
2741 amount shall be reduced to an amount equal to the policy limits plus $15,000; and
2742 (ii) any of the following applicable costs:
2743 (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
2744 (B) the arbitrator or arbitration panel's fee; and
2745 (C) the reasonable costs of expert witnesses and depositions used in the presentation of
2746 evidence during arbitration or litigation.
2747 (h) (i) The covered person shall provide an affidavit of costs within five days of an
2748 arbitration award.
2749 (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
2750 which the underinsured motorist carrier objects.
2751 (B) The objection shall be resolved by the arbitrator or arbitration panel.
2752 (iii) The award of costs by the arbitrator or arbitration panel under Subsection (9)(g)(ii)
2753 may not exceed $5,000.
2754 (i) (i) A covered person shall disclose all material information, other than rebuttal
2755 evidence, within 30 days after a covered person elects to submit a claim for underinsured
2756 motorist coverage benefits to binding arbitration or files litigation as specified in Subsection
2757 (9)(a).
2758 (ii) If the information under Subsection (9)(i)(i) is not disclosed, the covered person
2759 may not recover costs or any amounts in excess of the policy under Subsection (9)(g).
2760 (j) This Subsection (9) does not limit any other cause of action that arose or may arise
2761 against the underinsured motorist carrier from the same dispute.
2762 (k) The provisions of this Subsection (9) only apply to motor vehicle accidents that
2763 occur on or after March 30, 2010.
2764 (l) (i) The written demand requirement in Subsection (9)(a)(i)(A) does not affect the
2765 covered person's requirement to provide a computation of any other economic damages
2766 claimed, and the one or more respondents shall have a reasonable time after the receipt of the
2767 computation of any other economic damages claimed to conduct fact and expert discovery as to
2768 any additional damages claimed. The changes made by this bill to this Subsection (9)(l) and
2769 Subsection (9)(a)(i)(A) apply to a claim submitted to binding arbitration or through litigation
2770 on or after May 13, 2014.
2771 (ii) The changes made by this bill under Subsections (9)(a)(ii)(A)(II) and (B)(II) apply
2772 to a claim submitted to binding arbitration or through litigation on or after May 13, 2014.
2773 Section 12. Section 31A-22-428 is amended to read:
2774 31A-22-428. Interest payable on life insurance proceeds.
2775 (1) For a life insurance policy delivered or issued for delivery in this state on or after
2776 May 5, 2008, the insurer shall pay interest on the death proceeds payable upon the death of the
2777 insured.
2778 (2) (a) Except as provided in Subsection (4), for the period beginning on the date of
2779 death and ending the day before the day described in Subsection (3)(b), interest under
2780 Subsection (1) shall accrue at a rate no less than the greater of:
2781 (i) the rate applicable to policy funds left on deposit; [
2782 (ii) [
2783 Constant Maturity Rate as published by the Federal Reserve.
2784 (b) If there is no rate applicable to policy funds on deposit as stated in Subsection
2785 (2)(a)(i), then the Two Year Treasury Constant Maturity Rates as published by the Federal
2786 Reserve applies.
2787 [
2788 which the death occurs.
2789 [
2790 (3) (a) Unless the claim is paid and except as provided in Subsection (4), beginning on
2791 the day described in Subsection (3)(b) and ending the day on which the claim is paid, interest
2792 shall accrue at the rate in Subsection (2) plus additional interest at the rate of 10% annually.
2793 (b) Interest accrues under Subsection (3)(a) beginning with the day that is 31 days from
2794 the latest of:
2795 (i) the day on which the insurer receives proof of death;
2796 (ii) the day on which the insurer receives sufficient information to determine:
2797 (A) liability;
2798 (B) the extent of the liability; and
2799 (C) the appropriate payee legally entitled to the proceeds; and
2800 (iii) the day on which:
2801 (A) legal impediments to payment of proceeds that depend on the action of parties
2802 other than the insurer are resolved; and
2803 (B) the insurer receives sufficient evidence of the resolution of the legal impediments
2804 described in Subsection (3)(b)(iii)(A).
2805 (4) A court of competent jurisdiction may require payment of interest from the date of
2806 death to the day on which a claim is paid at a rate equal to the sum of:
2807 (a) the rate specified in Subsection (2); and
2808 (b) the legal rate identified in Subsection 15-1-1 (2).
2809 Section 13. Section 31A-22-617 is amended to read:
2810 31A-22-617. Preferred provider contract provisions.
2811 Health insurance policies may provide for insureds to receive services or
2812 reimbursement under the policies in accordance with preferred health care provider contracts as
2813 follows:
2814 (1) Subject to restrictions under this section, [
2815 administrator may enter into contracts with health care providers as defined in Section
2816 78B-3-403 under which the health care providers agree to supply services, at prices specified in
2817 the contracts, to persons insured by an insurer.
2818 (a) (i) A health care provider contract may require the health care provider to accept the
2819 specified payment in this Subsection (1) as payment in full, relinquishing the right to collect
2820 additional amounts from the insured person.
2821 (ii) In [
2822 determined in accordance with applicable law, the provider contract, the subscriber contract,
2823 and the insurer's written payment policies in effect at the time services were rendered.
2824 (iii) If the parties are unable to resolve their dispute, the matter shall be subject to
2825 binding arbitration by a jointly selected arbitrator. Each party is to bear its own expense except
2826 the cost of the jointly selected arbitrator shall be equally shared. This Subsection (1)(a)(iii)
2827 does not apply to the claim of a general acute hospital to the extent it is inconsistent with the
2828 hospital's provider agreement.
2829 (iv) An organization may not penalize a provider solely for pursuing a claims dispute
2830 or otherwise demanding payment for a sum believed owing.
2831 (v) If an insurer permits another entity with which it does not share common ownership
2832 or control to use or otherwise lease one or more of the organization's networks of participating
2833 providers, the organization shall ensure, at a minimum, that the entity pays participating
2834 providers in accordance with the same fee schedule and general payment policies as the
2835 organization would for that network.
2836 (b) The insurance contract may reward the insured for selection of preferred health care
2837 providers by:
2838 (i) reducing premium rates;
2839 (ii) reducing deductibles;
2840 (iii) coinsurance;
2841 (iv) other copayments; or
2842 (v) any other reasonable manner.
2843 (c) If the insurer is a managed care organization, as defined in Subsection
2844 31A-27a-403 (1)(f):
2845 (i) the insurance contract and the health care provider contract shall provide that in the
2846 event the managed care organization becomes insolvent, the rehabilitator or liquidator may:
2847 (A) require the health care provider to continue to provide health care services under
2848 the contract until the earlier of:
2849 (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
2850 liquidation; or
2851 (II) the date the term of the contract ends; and
2852 (B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
2853 receive from the managed care organization during the time period described in Subsection
2854 (1)(c)(i)(A);
2855 (ii) the provider is required to:
2856 (A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and
2857 (B) relinquish the right to collect additional amounts from the insolvent managed care
2858 organization's enrollee, as defined in Subsection 31A-27a-403 (1)(b);
2859 (iii) if the contract between the health care provider and the managed care organization
2860 has not been reduced to writing, or the contract fails to contain the [
2861 requirements described in Subsection (1)(c)(i), the provider may not collect or attempt to
2862 collect from the enrollee:
2863 (A) sums owed by the insolvent managed care organization; or
2864 (B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
2865 (iv) the following may not bill or maintain [
2866 collect sums owed by the insolvent managed care organization or the amount of the regular fee
2867 reduction authorized under Subsection (1)(c)(i)(B):
2868 (A) a provider;
2869 (B) an agent;
2870 (C) a trustee; or
2871 (D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
2872 (v) notwithstanding Subsection (1)(c)(i):
2873 (A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
2874 regular fee set forth in the contract; and
2875 (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
2876 for services received from the provider that the enrollee was required to pay before the filing
2877 of:
2878 (I) a petition for rehabilitation; or
2879 (II) a petition for liquidation.
2880 (2) (a) Subject to Subsections (2)(b) through (2)(e), an insurer using preferred health
2881 care provider contracts is subject to the reimbursement requirements in Section 31A-8-501 on
2882 or after January 1, 2014.
2883 (b) When reimbursing for services of health care providers not under contract, the
2884 insurer may make direct payment to the insured.
2885 (c) An insurer using preferred health care provider contracts may impose a deductible
2886 on coverage of health care providers not under contract.
2887 (d) When selecting health care providers with whom to contract under Subsection (1),
2888 an insurer may not unfairly discriminate between classes of health care providers, but may
2889 discriminate within a class of health care providers, subject to Subsection (7).
2890 (e) For purposes of this section, unfair discrimination between classes of health care
2891 providers includes:
2892 (i) refusal to contract with class members in reasonable proportion to the number of
2893 insureds covered by the insurer and the expected demand for services from class members; and
2894 (ii) refusal to cover procedures for one class of providers that are:
2895 (A) commonly used by members of the class of health care providers for the treatment
2896 of illnesses, injuries, or conditions;
2897 (B) otherwise covered by the insurer; and
2898 (C) within the scope of practice of the class of health care providers.
2899 (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
2900 to the insured that it has entered into preferred health care provider contracts. The insurer shall
2901 provide sufficient detail on the preferred health care provider contracts to permit the insured to
2902 agree to the terms of the insurance contract. The insurer shall provide at least the following
2903 information:
2904 (a) a list of the health care providers under contract, and if requested their business
2905 locations and specialties;
2906 (b) a description of the insured benefits, including [
2907 other copayments;
2908 (c) a description of the quality assurance program required under Subsection (4); and
2909 (d) a description of the adverse benefit determination procedures required under
2910 Subsection (5).
2911 (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
2912 assurance program for assuring that the care provided by the health care providers under
2913 contract meets prevailing standards in the state.
2914 (b) The commissioner in consultation with the executive director of the Department of
2915 Health may designate qualified persons to perform an audit of the quality assurance program.
2916 The auditors shall have full access to all records of the organization and its health care
2917 providers, including medical records of individual patients.
2918 (c) The information contained in the medical records of individual patients shall
2919 remain confidential. All information, interviews, reports, statements, memoranda, or other data
2920 furnished for purposes of the audit and any findings or conclusions of the auditors are
2921 privileged. The information is not subject to discovery, use, or receipt in evidence in any legal
2922 proceeding except hearings before the commissioner concerning alleged violations of this
2923 section.
2924 (5) An insurer using preferred health care provider contracts shall provide a reasonable
2925 procedure for resolving complaints and adverse benefit determinations initiated by the insureds
2926 and health care providers.
2927 (6) An insurer may not contract with a health care provider for treatment of illness or
2928 injury unless the health care provider is licensed to perform that treatment.
2929 (7) (a) A health care provider or insurer may not discriminate against a preferred health
2930 care provider for agreeing to a contract under Subsection (1).
2931 (b) [
2932 scope of the health care provider's practice, who is willing and able to meet the terms and
2933 conditions established by the insurer for designation as a preferred health care provider, shall
2934 be able to apply for and receive the designation as a preferred health care provider. Contract
2935 terms and conditions may include reasonable limitations on the number of designated preferred
2936 health care providers based upon substantial objective and economic grounds, or expected use
2937 of particular services based upon prior provider-patient profiles.
2938 (8) Upon the written request of a provider excluded from a provider contract, the
2939 commissioner may hold a hearing to determine if the insurer's exclusion of the provider is
2940 based on the criteria set forth in Subsection (7)(b).
2941 [
2942
2943 [
2944 certain benefit or service as part of a health benefit plan.
2945 [
2946 in accordance with Section 31A-22-625 .
2947 [
2948 Section 31A-22-618 , an insurer or third party administrator is not required to, but may, enter
2949 into [
2950 Chapter 40a, Athletic Trainer Licensing Act.
2951 Section 14. Section 31A-22-618.5 is amended to read:
2952 31A-22-618.5. Health benefit plan offerings.
2953 (1) The purpose of this section is to increase the range of health benefit plans available
2954 in the small group, small employer group, large group, and individual insurance markets.
2955 (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
2956 Organizations and Limited Health Plans:
2957 (a) shall offer to potential purchasers at least one health benefit plan that is subject to
2958 the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
2959 and
2960 (b) may offer to a potential purchaser one or more health benefit plans that:
2961 (i) are not subject to one or more of the following:
2962 (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
2963 (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
2964 (6);
2965 (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
2966 Section 31A-8-101 ; or
2967 (D) coverage mandates enacted after January 1, 2009 that are not required by federal
2968 law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
2969 enacted after January 1, 2009; and
2970 (ii) when offering a health plan under this section, provide coverage for an emergency
2971 medical condition as required by Section 31A-22-627 as follows:
2972 (A) within the organization's service area, covered services shall include health care
2973 services from nonaffiliated providers when medically necessary to stabilize an emergency
2974 medical condition; and
2975 (B) outside the organization's service area, covered services shall include medically
2976 necessary health care services for the treatment of an emergency medical condition that are
2977 immediately required while the enrollee is outside the geographic limits of the organization's
2978 service area.
2979 (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
2980 Maintenance Organizations and Limited Health Plans:
2981 (a) [
2982 not subject to Section 31A-22-618 ;
2983 (b) when offering a health plan under this Subsection (3), shall provide coverage of
2984 emergency care services as required by Section 31A-22-627 ; and
2985 (c) is not subject to coverage mandates enacted after January 1, 2009 that are not
2986 required by federal law, provided that an insurer offers one plan that covers a mandate enacted
2987 after January 1, 2009.
2988 (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
2989 Subsection (2)(b).
2990 (5) (a) Any difference in price between a health benefit plan offered under Subsections
2991 (2)(a) and (b) shall be based on actuarially sound data.
2992 (b) Any difference in price between a health benefit plan offered under Subsection
2993 (3)(a) shall be based on actuarially sound data.
2994 (6) Nothing in this section limits the number of health benefit plans that an insurer may
2995 offer.
2996 Section 15. Section 31A-22-625 is amended to read:
2997 31A-22-625. Catastrophic coverage of mental health conditions.
2998 (1) As used in this section:
2999 (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
3000 that does not impose a lifetime limit, annual payment limit, episodic limit, inpatient or
3001 outpatient service limit, or maximum out-of-pocket limit that places a greater financial burden
3002 on an insured for the evaluation and treatment of a mental health condition than for the
3003 evaluation and treatment of a physical health condition.
3004 (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
3005 factors, such as deductibles, copayments, or coinsurance, before reaching a maximum
3006 out-of-pocket limit.
3007 (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
3008 limit for physical health conditions and another maximum out-of-pocket limit for mental health
3009 conditions, except that if separate out-of-pocket limits are established, the out-of-pocket limit
3010 for mental health conditions may not exceed the out-of-pocket limit for physical health
3011 conditions.
3012 (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan that
3013 pays for at least 50% of covered services for the diagnosis and treatment of mental health
3014 conditions.
3015 (ii) "50/50 mental health coverage" may include a restriction on:
3016 (A) episodic limits;
3017 (B) inpatient or outpatient service limits; or
3018 (C) maximum out-of-pocket limits.
3019 (c) "Large employer" is as defined in 42 U.S.C. Sec. 300gg-91.
3020 (d) (i) "Mental health condition" means a condition or disorder involving mental illness
3021 that falls under a diagnostic category listed in the Diagnostic and Statistical Manual, as
3022 periodically revised.
3023 (ii) "Mental health condition" does not include the following when diagnosed as the
3024 primary or substantial reason or need for treatment:
3025 (A) a marital or family problem;
3026 (B) a social, occupational, religious, or other social maladjustment;
3027 (C) a conduct disorder;
3028 (D) a chronic adjustment disorder;
3029 (E) a psychosexual disorder;
3030 (F) a chronic organic brain syndrome;
3031 (G) a personality disorder;
3032 (H) a specific developmental disorder or learning disability; or
3033 (I) an intellectual disability.
3034 (e) "Small employer" is as defined in 42 U.S.C. Sec. 300gg-91.
3035 (2) (a) At the time of purchase and renewal, an insurer shall offer to a small employer
3036 that it insures or seeks to insure a choice between:
3037 (i) (A) catastrophic mental health coverage; or
3038 (B) federally qualified mental health coverage as described in Subsection (3); and
3039 (ii) 50/50 mental health coverage.
3040 (b) In addition to complying with Subsection (2)(a), an insurer may offer to provide:
3041 (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
3042 that exceed the minimum requirements of this section; or
3043 (ii) coverage that excludes benefits for mental health conditions.
3044 (c) A small employer may, at its option, regardless of the employer's previous coverage
3045 for mental health conditions, choose either:
3046 (i) coverage offered under Subsection (2)(a)(i);
3047 (ii) 50/50 mental health coverage; or
3048 (iii) coverage offered under Subsection (2)(b).
3049 (d) An insurer is exempt from the 30% index rating restriction in Section
3050 31A-30-106.1 and, for the first year only that the employer chooses coverage that meets or
3051 exceeds catastrophic mental health coverage, the 15% annual adjustment restriction in Section
3052 31A-30-106.1 , for [
3053 coverage that meets or exceeds catastrophic mental health coverage.
3054 (3) (a) An insurer shall offer a large employer mental health and substance use disorder
3055 benefit in compliance with Section 2705 of the Public Health Service Act, 42 U.S.C. Sec.
3056 300gg-26, and federal regulations adopted pursuant to that act.
3057 (b) An insurer shall provide in an individual or small employer health benefit plan,
3058 mental health and substance use disorder benefits in compliance with Sections 2705 and 2711
3059 of the Public Health Service Act, 42 U.S.C. Sec. 300gg-26, and federal regulations adopted
3060 pursuant to that act.
3061 (4) (a) An insurer may provide catastrophic mental health coverage to a small employer
3062 through a managed care organization or system in a manner consistent with Chapter 8, Health
3063 Maintenance Organizations and Limited Health Plans, regardless of whether the insurance