This document includes House Floor Amendments incorporated into the bill on Thu, Feb 16, 2017 at 12:00 PM by ryoung.
This document includes Senate Committee Amendments incorporated into the bill on Thu, Feb 23, 2017 at 1:12 PM by lpoole.
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7 LONG TITLE
8 General Description:
9 This bill modifies provisions related to insurance.
10 Highlighted Provisions:
11 This bill:
12 ▸ modifies enforcement penalties and procedures;
13 ▸ replaces the term "health benefit product" with "health benefit plan";
14 ▸ clarifies that rules are made under Title 63G, Chapter 3, Utah Administrative
15 Rulemaking Act;
16 ▸ addresses taxation;
17 ▸ requires licensees who are foreign insurers to provide contact information and
18 maintain certain records;
19 ▸ modifies due date of insurer holding company filing;
20 ▸ enacts the Risk Management and Own Risk and Solvency Assessment Act,
21 including:
22 • providing the scope of the chapter;
23 • defining terms;
24 • requiring a risk management framework;
25 • requiring an own risk and solvency assessment;
26 • providing for a summary report and its contents;
27 • providing for exemptions;
28 • addressing confidentiality;
29 • establishing sanctions; and
30 • providing a severability clause;
31 ▸ addresses risk based capital provisions;
32 ▸ addresses association groups;
33 ▸ modifies accident and health insurance standards provisions;
34 ▸ moves provision for when a child of a group member may be denied eligibility;
35 ▸ clarifies preferred provider contract provisions;
36 ▸ addresses when a person is required to provide information concerning an employer
37 self-insured employee welfare benefit plan;
38 ▸ moves provisions related to alcohol and drug dependency treatment;
39 ▸ addresses groups eligible for group or blanket insurance;
40 ▸ modifies provisions related to requirements for notice of termination;
41 ▸ addresses scope of part of credit life and accident and health insurance;
42 ▸ amends definitions under the Unclaimed Life Insurance and Annuity Benefits Act;
43 ▸ provides for the assessment of forfeitures;
44 ▸ provides for notice to a producer of the termination of appointment;
45 ▸ addresses when an insurer Ŝ→ [
46 ▸ imposes requirements related to flood insurance;
47 ▸ addresses licensed compensation;
48 ▸ provides for notice to a designee when an agency terminates the designation,
49 including navigator agencies;
50 ▸ addresses contracts with agencies;
51 ▸ addresses contracts with individual title insurance producer or an agency title
52 insurance producer;
53 ▸ requires certain record keeping requirements;
54 ▸ addresses reports from organizations licensed as adjusters;
55 ▸ enacts provisions related to adjusters;
56 ▸ modifies provisions related to captive insurers, including:
57 • amending definitions;
58 • addressing permissive areas of insurance;
59 • addressing capital issues;
60 • modifying provisions required for formation;
61 • providing that captive insurance companies may cede risks to certain insurers;
62 • addressing contributions to guaranty of insolvency funds; and
63 • repealing provisions related to an association captive or industrial insured
64 group;
65 ▸ amends board of directors provisions under the Defined Contribution Risk Adjuster
66 Act;
67 ▸ imposes record retention requirements under the Continuing Care Provider Act;
67a Ĥ→ [
67b ▸ repeals the Voluntary Health Insurance Purchasing Alliance Act; and ←Ĥ
68 ▸ makes technical and conforming amendments.
69 Money Appropriated in this Bill:
70 None
71 Other Special Clauses:
72 This bill provides retrospective operation.
73 Utah Code Sections Affected:
74 AMENDS:
74a Ĥ→ 16-6a-207, as last amended by Laws of Utah 2016, Chapter 234
74b 16-6a-301, as last enacted by Laws of Utah 2016, Chapter 234 ←Ĥ
75 31A-2-308, as last amended by Laws of Utah 2012, Chapter 253
76 31A-3-102, as last amended by Laws of Utah 2014, Chapter 435
77 31A-3-205, as enacted by Laws of Utah 2005, Chapter 123
78 31A-3-304, as last amended by Laws of Utah 2015, Chapter 244
79 31A-8-402.3, as last amended by Laws of Utah 2014, Chapters 290, 300, and 425
80 31A-8-402.5, as last amended by Laws of Utah 2003, Chapter 252
81 31A-16-105, as last amended by Laws of Utah 2015, Chapter 244
82 31A-17-404, as last amended by Laws of Utah 2016, Chapter 138
83 31A-17-603, as last amended by Laws of Utah 2013, Chapter 319
84 31A-22-505, as enacted by Laws of Utah 1985, Chapter 242
85 31A-22-605, as last amended by Laws of Utah 2005, Chapter 78
86 31A-22-610.5, as last amended by Laws of Utah 2011, Chapter 297
87 31A-22-614.5, as last amended by Laws of Utah 2011, Chapter 284
88 31A-22-617, as last amended by Laws of Utah 2014, Chapters 290 and 300
89 31A-22-701, as last amended by Laws of Utah 2011, Chapter 284
90 31A-22-716, as last amended by Laws of Utah 2011, Chapters 284 and 297
91 31A-22-721, as last amended by Laws of Utah 2014, Chapters 290, 300, and 425
92 31A-22-801, as last amended by Laws of Utah 2001, Chapter 116
93 31A-22-1902, as enacted by Laws of Utah 2015, Chapter 259
94 31A-23a-111, as last amended by Laws of Utah 2016, Chapter 138
95 31A-23a-115, as last amended by Laws of Utah 2009, Chapter 349
96 31A-23a-203, as last amended by Laws of Utah 2014, Chapters 290 and 300
97 31A-23a-302, as last amended by Laws of Utah 2012, Chapter 253
98 31A-23a-407, as last amended by Laws of Utah 2016, Chapter 314
99 31A-23a-412, as last amended by Laws of Utah 2012, Chapter 253
100 31A-23a-501, as last amended by Laws of Utah 2016, Chapter 138
101 31A-23b-102, as last amended by Laws of Utah 2014, Chapters 290 and 300
102 31A-23b-202.5, as enacted by Laws of Utah 2014, Chapter 425
103 31A-23b-209, as enacted by Laws of Utah 2013, Chapter 341
104 31A-23b-210, as enacted by Laws of Utah 2013, Chapter 341
105 31A-23b-401, as last amended by Laws of Utah 2016, Chapter 138
106 31A-26-209, as last amended by Laws of Utah 2004, Chapter 173
107 31A-26-210, as last amended by Laws of Utah 2009, Chapter 349
108 31A-26-213, as last amended by Laws of Utah 2016, Chapter 138
109 31A-30-106, as last amended by Laws of Utah 2014, Chapters 290 and 300
110 31A-30-106.1, as last amended by Laws of Utah 2012, Chapter 279
111 31A-30-107, as last amended by Laws of Utah 2014, Chapters 290, 300, and 425
112 31A-30-107.1, as last amended by Laws of Utah 2003, Chapter 252
112a Ĥ→ 31A-35-103, as last amended by Laws of Utah 2016, Chapter 234 ←Ĥ
113 31A-37-102, as last amended by Laws of Utah 2016, Chapter 138
114 31A-37-106, as last amended by Laws of Utah 2015, Chapter 244
115 31A-37-202, as last amended by Laws of Utah 2015, Chapter 244
116 31A-37-204, as last amended by Laws of Utah 2016, Chapter 138
117 31A-37-301, as last amended by Laws of Utah 2016, Chapter 348
118 31A-37-303, as last amended by Laws of Utah 2016, Chapter 138
119 31A-37-305, as enacted by Laws of Utah 2003, Chapter 251
120 31A-42-201, as last amended by Laws of Utah 2010, Chapters 10 and 68
121 31A-44-603, as enacted by Laws of Utah 2016, Chapter 270
122 53-2a-1102, as last amended by Laws of Utah 2015, Chapter 408
123 59-7-102, as last amended by Laws of Utah 2014, Chapters 376 and 435
124 59-9-101, as last amended by Laws of Utah 2016, Chapter 135
125 63G-2-302, as last amended by Laws of Utah 2016, Chapter 410
126 ENACTS:
127 31A-14-205.5, Utah Code Annotated 1953
128 31A-16a-101, Utah Code Annotated 1953
129 31A-16a-102, Utah Code Annotated 1953
130 31A-16a-103, Utah Code Annotated 1953
131 31A-16a-104, Utah Code Annotated 1953
132 31A-16a-105, Utah Code Annotated 1953
133 31A-16a-106, Utah Code Annotated 1953
134 31A-16a-107, Utah Code Annotated 1953
135 31A-16a-108, Utah Code Annotated 1953
136 31A-16a-109, Utah Code Annotated 1953
137 31A-16a-110, Utah Code Annotated 1953
138 31A-22-645, Utah Code Annotated 1953
139 31A-26-312, Utah Code Annotated 1953
140 31A-26-401, Utah Code Annotated 1953
141 31A-26-402, Utah Code Annotated 1953
142 31A-26-403, Utah Code Annotated 1953
143 REPEALS:
144 31A-22-715, as last amended by Laws of Utah 2016, Chapter 138
145 31A-22-718, as enacted by Laws of Utah 1995, Chapter 344
145a Ĥ→ 31A-34-101, as last enacted by Laws of Utah 1996, Chapter 143
145b 31A-34-102, as last enacted by Laws of Utah 1996, Chapter 143
145c 31A-34-103, as last enacted by Laws of Utah 1996, Chapter 143
145d 31A-34-104, as last amended by Laws of Utah 2011, Chapter 297
145e 31A-34-105, as last amended by Laws of Utah 2000, Chapter 300
145f 31A-34-106, as last enacted by Laws of Utah 1996, Chapter 143
145g 31A-34-107, as last amended by Laws of Utah 2011, Chapter 297 ☆
145h 31A-34-108, as last amended by Laws of Utah 2000, Chapter 300
145i 31A-34-109, as last enacted by Laws of Utah 1996, Chapter 143
145j 31A-34-110, as last amended by Laws of Utah 2001, Chapter 108
145k 31A-34-111, as last enacted by Laws of Utah 1996, Chapter 143 ←Ĥ
146 31A-37-306, as last amended by Laws of Utah 2015, Chapter 244
147
148 Be it enacted by the Legislature of the state of Utah:
148a Ĥ→ Section 1. Section 16-6a-207 is amended to read:
148b 16-6a-207. Incorporation of cooperative association.
148c (1) (a) If a cooperative association meets the requirements of Subsection (1)(b), it may:
148d (i) be incorporated under this chapter; and
148e (ii) use the word "cooperative" as part of its corporate or business name.
148f (b) A cooperative association described in Subsection (1)(a):
148g (i) may not be [
148h state; and
148i [
148j
148k
148l (ii) shall state in its articles of incorporation that:
148m (A) a member may not have more than one vote regardless of the number or amount of stock
148n or membership capital owned by the member unless voting is based in whole or in part on the volume
148o of patronage of the member with the cooperative association; and
148p (B) savings in excess of dividends and additions to reserves and surplus shall be distributed or
148q allocated to members or patrons on the basis of patronage.
148r (2) (a) Any cooperative association incorporated in accordance with Subsection (1):
148s (i) has all the rights and is subject to the limitations provided in Section 3-1-11; and
148t (ii) may pay dividends on its stock, if it has stock, subject to the limitations of Section 3-1-11.
148u (b) The articles of incorporation or the bylaws of a cooperative association incorporated in
148v accordance with Subsection (1) may provide for:
148w (i) the establishment and alteration of voting districts;
148x (ii) the election of delegates to represent:
148y (A) the districts described in Subsection (2)(b)(i); and
148z (B) the members of the districts described in Subsection (2)(b)(i);
148aa (iii) the establishment and alteration of director districts; and
148ab (iv) the election of directors to represent the districts described in Subsection (2)(b)(ii) by:
148ac (A) the members of the districts; or ☆
148ad (B) delegates elected by the members.
148ae (3) (a) A corporation organized under Title 3, Uniform Agricultural Cooperative Association
148af Act, or Title 16, Chapter 16, Uniform Limited Cooperative Association Act, may convert itself into a
148ag cooperative association subject to this chapter by adopting appropriate amendments to its articles of
148ah incorporation by which:
148ai (i) it elects to become subject to this chapter; and
148aj (ii) makes changes in its articles of incorporation that are:
148ak (A) required by this chapter; and
148al (B) any other changes permitted by this chapter.
148am (b) The amendments described in Subsection (3)(a) shall be adopted and filed in the manner
148an provided by the law then applicable to the cooperative nonprofit corporation.
148ao [
148ap
148aq [
148ar subject to this chapter.
148as [
148at cooperative association under Title 16, Chapter 16, Uniform Limited Cooperative Association Act, by
148au complying with that chapter.
148av Section 2. Section 16-6a-301 is amended to read:
148aw 16-6a-301. Purposes.
148ax (1) Every nonprofit corporation incorporated under this chapter that in its articles of
148ay incorporation has a statement meeting the requirements of Subsection 16-6a-202(3)(a) may engage in
148az any lawful activity except for express limitations set forth in the articles of incorporation.
148ba (2) (a) A nonprofit corporation engaging in an activity that is subject to regulation under
148bb another statute of this state may incorporate under this chapter only if permitted by, and subject to all
148bc limitations of, the other statute.
148bd (b) Without limiting Subsection (2)(a) and subject to Subsection (2)(c), an organization may
148be not be organized under this chapter if the organization is subject to the:
148bf (i) insurance laws of this state; or
148bg (ii) laws governing depository institutions as defined in Section 7-1-103.
148bh [
148bi
148bj
148bk
149 Section Ĥ→ [
150 31A-2-308. Enforcement penalties and procedures.
151 (1) (a) A person who violates any insurance statute or rule or any order issued under
152 Subsection 31A-2-201(4) shall forfeit to the state twice the amount of any profit gained from
153 the violation, in addition to any other forfeiture or penalty imposed.
154 (b) (i) The commissioner may order an individual producer, surplus line producer,
155 limited line producer, managing general agent, reinsurance intermediary, adjuster, third party
156 administrator, navigator, or insurance consultant who violates an insurance statute or rule to
157 forfeit to the state not more than $2,500 for each violation.
158 (ii) The commissioner may order any other person who violates an insurance statute or
159 rule to forfeit to the state not more than $5,000 for each violation.
160 (c) (i) The commissioner may order an individual producer, surplus line producer,
161 limited line producer, managing general agent, reinsurance intermediary, adjuster, third party
162 administrator, navigator, or insurance consultant who violates an order issued under Subsection
163 31A-2-201(4) to forfeit to the state not more than $2,500 for each violation. Each day the
164 violation continues is a separate violation.
165 (ii) The commissioner may order any other person who violates an order issued under
166 Subsection 31A-2-201(4) to forfeit to the state not more than $5,000 for each violation. Each
167 day the violation continues is a separate violation.
168 (d) The commissioner may accept or compromise any forfeiture under this Subsection
169 (1) until after a complaint is filed under Subsection (2). After the filing of the complaint, only
170 the attorney general may compromise the forfeiture.
171 (2) When a person fails to comply with an order issued under Subsection
172 31A-2-201(4), including a forfeiture order, the commissioner may file an action in any court of
173 competent jurisdiction or obtain a court order or judgment:
174 (a) enforcing the commissioner's order;
175 (b) (i) directing compliance with the commissioner's order and restraining further
176 violation of the order; and
177 (ii) subjecting the person ordered to the procedures and sanctions available to the court
178 for punishing contempt if the failure to comply continues; or
179 (c) imposing a forfeiture in an amount the court considers just, up to $10,000 for each
180 day the failure to comply continues after the filing of the complaint until judgment is rendered.
181 (3) (a) The Utah Rules of Civil Procedure govern actions brought under Subsection (2),
182 except that the commissioner may file a complaint seeking a court-ordered forfeiture under
183 Subsection (2)(c) no sooner than two weeks after giving written notice of the commissioner's
184 intention to proceed under Subsection (2)(c).
185 (b) The commissioner's order issued under Subsection 31A-2-201(4) may contain a
186 notice of intention to seek a court-ordered forfeiture if the commissioner's order is disobeyed.
187 (4) If, after a court order is issued under Subsection (2), the person fails to comply with
188 the commissioner's order or judgment:
189 (a) the commissioner may certify the fact of the failure to the court by affidavit; and
190 (b) the court may, after a hearing following at least five days written notice to the
191 parties subject to the order or judgment, amend the order or judgment to add the forfeiture or
192 forfeitures, as prescribed in Subsection (2)(c), until the person complies.
193 (5) (a) The proceeds of the forfeitures under this section, including collection expenses,
194 shall be paid into the General Fund.
195 (b) The expenses of collection shall be credited to the department's budget.
196 (c) The attorney general's budget shall be credited to the extent the department
197 reimburses the attorney general's office for its collection expenses under this section.
198 (6) (a) Forfeitures and judgments under this section bear interest at the rate charged by
199 the United States Internal Revenue Service for past due taxes on the:
200 (i) date of entry of the commissioner's order under Subsection (1); or
201 (ii) date of judgment under Subsection (2).
202 (b) Interest accrues from the later of the dates described in Subsection (6)(a) until the
203 forfeiture and accrued interest are fully paid.
204 (7) A forfeiture may not be imposed under Subsection (2)(c) if:
205 (a) at the time the forfeiture action is commenced, the person was in compliance with
206 the commissioner's order; or
207 (b) the violation of the order occurred during the order's suspension.
208 (8) The commissioner may seek an injunction as an alternative to issuing an order
209 under Subsection 31A-2-201(4).
210 (9) (a) A person is guilty of a class B misdemeanor if that person:
211 (i) intentionally violates:
212 (A) an insurance statute of this state; or
213 (B) an order issued under Subsection 31A-2-201(4);
214 (ii) intentionally permits a person over whom that person has authority to violate:
215 (A) an insurance statute of this state; or
216 (B) an order issued under Subsection 31A-2-201(4); or
217 (iii) intentionally aids any person in violating:
218 (A) an insurance statute of this state; or
219 (B) an order issued under Subsection 31A-2-201(4).
220 (b) Unless a specific criminal penalty is provided elsewhere in this title, the person may
221 be fined not more than:
222 (i) $10,000 if a corporation; or
223 (ii) $5,000 if a person other than a corporation.
224 (c) If the person is an individual, the person may, in addition, be imprisoned for up to
225 one year.
226 (d) As used in this Subsection (9), "intentionally" has the same meaning as under
227 Subsection 76-2-103(1).
228 (10) (a) A person who knowingly and intentionally violates Section 31A-4-102,
229 31A-8a-208, 31A-15-105, 31A-23a-116, or 31A-31-111 is guilty of a felony as provided in this
230 Subsection (10).
231 (b) When the value of the property, money, or other things obtained or sought to be
232 obtained in violation of Subsection (10)(a):
233 (i) is less than $5,000, a person is guilty of a third degree felony; or
234 (ii) is or exceeds $5,000, a person is guilty of a second degree felony.
235 (11) (a) After a hearing, the commissioner may, in whole or in part, revoke, suspend,
236 place on probation, limit, or refuse to renew the licensee's license or certificate of authority:
237 (i) when a licensee of the department, other than a domestic insurer:
238 (A) persistently or substantially violates the insurance law; or
239 (B) violates an order of the commissioner under Subsection 31A-2-201(4);
240 (ii) if there are grounds for delinquency proceedings against the licensee under Section
241 31A-27a-207; or
242 (iii) if the licensee's methods and practices in the conduct of the licensee's business
243 endanger, or the licensee's financial resources are inadequate to safeguard, the legitimate
244 interests of the licensee's customers and the public.
245 (b) Additional license termination or probation provisions for licensees other than
246 insurers are set forth in Sections 31A-19a-303, 31A-19a-304, 31A-23a-111, 31A-23a-112,
247 31A-25-208, 31A-25-209, 31A-26-213, 31A-26-214, 31A-35-501, and 31A-35-503.
248 (12) The enforcement penalties and procedures set forth in this section are not
249 exclusive, but are cumulative of other rights and remedies the commissioner has pursuant to
250 applicable law.
251 Section 2. Section 31A-3-102 is amended to read:
252 31A-3-102. Exclusive fees and taxes.
253 (1) The following are in place of any other license fee or license assessment that might
254 otherwise be levied against a licensee by the state or a political subdivision of the state:
255 (a) taxes and fees under this chapter[
256 (b) the premium taxes under [
257 9, Taxation of Admitted Insurers;
258 (c) the fees under Section 31A-31-108[
259 (d) the examination costs under Section 31A-2-205 [
260
261
262 [
263 (2) The following are not subject to Title 59, Chapter 7, Corporate Franchise and
264 Income Taxes:
265 (a) an insurer that is subject to premium taxes under [
266
267 Insurers, regardless of whether the insurance company has a tax liability under that chapter;
268 (b) an insurance company that engages in a transaction that is subject to taxes under
269 Section 31A-3-301 or 31A-3-302, regardless of whether the insurance company has a tax
270 liability under that section; and
271 (c) a captive insurance company as provided in Section 31A-3-304 that pays a fee
272 imposed under Section 31A-3-304.
273 (3) Unless otherwise exempt, a licensee under this title is subject to real and personal
274 property taxes.
275 Section 3. Section 31A-3-205 is amended to read:
276 31A-3-205. Taxation of insurance companies.
277 (1) An admitted insurer shall pay to the State Tax Commission taxes imposed on the
278 admitted insurer by Title 59, Revenue and Taxation.
279 (2) A surplus lines insurer shall pay the taxes due under Section 31A-3-301 or
280 31A-3-302 in accordance with Section 31A-3-303.
281 Section 4. Section 31A-3-304 is amended to read:
282 31A-3-304. Annual fees -- Other taxes or fees prohibited -- Captive Insurance
283 Restricted Account.
284 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
285 to obtain or renew a certificate of authority.
286 (b) The commissioner shall:
287 (i) determine the annual fee pursuant to Section 31A-3-103; and
288 (ii) consider whether the annual fee is competitive with fees imposed by other states on
289 captive insurance companies.
290 (2) A captive insurance company that fails to pay the fee required by this section is
291 subject to the relevant sanctions of this title.
292 [
293
294
295 (3) (a) A captive insurance company that pays one of the following fees is exempt from
296 Title 59, Chapter 7, Corporate Franchise and Income Taxes, and Title 59, Chapter 9, Taxation
297 of Admitted Insurers:
298 (i) a fee under this section;
299 (ii) a fee under Chapter 37, Captive Insurance Companies Act; [
300 (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
301 Act.
302 (b) The state or a county, city, or town within the state may not levy or collect an
303 occupation tax or other [
304 against a captive insurance company.
305 (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
306 against a captive insurance company.
307 [
308 (4) A captive insurance company shall pay the fee imposed by this section to the
309 commissioner by June 1 of each year.
310 (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
311 deposited into the Captive Insurance Restricted Account.
312 (b) There is created in the General Fund a restricted account known as the "Captive
313 Insurance Restricted Account."
314 (c) The Captive Insurance Restricted Account shall consist of the fees described in
315 Subsection (3)(a).
316 (d) The commissioner shall administer the Captive Insurance Restricted Account.
317 Subject to appropriations by the Legislature, the commissioner shall use the money deposited
318 into the Captive Insurance Restricted Account to:
319 (i) administer and enforce:
320 (A) Chapter 37, Captive Insurance Companies Act; and
321 (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
322 (ii) promote the captive insurance industry in Utah.
323 (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
324 except that at the end of each fiscal year, money received by the commissioner in excess of the
325 following shall be treated as free revenue in the General Fund:
326 (i) for fiscal year 2015-2016, in excess of $1,250,000;
327 (ii) for fiscal year 2016-2017, in excess of $1,250,000; and
328 (iii) for fiscal year 2017-2018 and subsequent fiscal years, in excess of $1,850,000.
329 Section 5. Section 31A-8-402.3 is amended to read:
330 31A-8-402.3. Discontinuance, nonrenewal, or changes to group health benefit
331 plans.
332 (1) Except as otherwise provided in this section, a group health benefit plan for a plan
333 sponsor is renewable and continues in force:
334 (a) with respect to all eligible employees and dependents; and
335 (b) at the option of the plan sponsor.
336 (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed for a
337 network plan, if:
338 (a) there is no longer any enrollee under the group health plan who lives, resides, or
339 works in:
340 (i) the service area of the insurer; or
341 (ii) the area for which the insurer is authorized to do business; or
342 (b) for coverage made available in the small or large employer market only through an
343 association, if:
344 (i) the employer's membership in the association ceases; and
345 (ii) the coverage is terminated uniformly without regard to any health status-related
346 factor relating to any covered individual.
347 (3) A health benefit plan for a plan sponsor may be discontinued if:
348 (a) a condition described in Subsection (2) exists;
349 (b) the plan sponsor fails to pay premiums or contributions in accordance with the
350 terms of the contract;
351 (c) the plan sponsor:
352 (i) performs an act or practice that constitutes fraud; or
353 (ii) makes an intentional misrepresentation of material fact under the terms of the
354 coverage;
355 (d) the insurer:
356 (i) elects to discontinue offering a particular health benefit [
357 issued for delivery in this state; and
358 (ii) (A) provides notice of the discontinuation in writing:
359 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
360 (II) at least 90 days before the date the coverage will be discontinued;
361 (B) provides notice of the discontinuation in writing:
362 (I) to the commissioner; and
363 (II) at least three working days prior to the date the notice is sent to the affected plan
364 sponsors, employees, and dependents of the plan sponsors or employees;
365 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase:
366 (I) all other health benefit [
367 market; or
368 (II) in the case of a large employer, any other health benefit [
369 being offered in that market; and
370 (D) in exercising the option to discontinue that [
371 offering the option of coverage in this section, acts uniformly without regard to:
372 (I) the claims experience of a plan sponsor;
373 (II) any health status-related factor relating to any covered participant or beneficiary; or
374 (III) any health status-related factor relating to any new participant or beneficiary who
375 may become eligible for the coverage; or
376 (e) the insurer:
377 (i) elects to discontinue all of the insurer's health benefit plans in:
378 (A) the small employer market;
379 (B) the large employer market; or
380 (C) both the small employer and large employer markets; and
381 (ii) (A) provides notice of the discontinuation in writing:
382 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
383 (II) at least 180 days before the date the coverage will be discontinued;
384 (B) provides notice of the discontinuation in writing:
385 (I) to the commissioner in each state in which an affected insured individual is known
386 to reside; and
387 (II) at least 30 working days prior to the date the notice is sent to the affected plan
388 sponsors, employees, and the dependents of the plan sponsors or employees;
389 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
390 market; and
391 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115.
392 (4) A large employer health benefit plan may be discontinued or nonrenewed:
393 (a) if a condition described in Subsection (2) exists; or
394 (b) for noncompliance with the insurer's:
395 (i) minimum participation requirements; or
396 (ii) employer contribution requirements.
397 (5) A small employer health benefit plan may be discontinued or nonrenewed:
398 (a) if a condition described in Subsection (2) exists; or
399 (b) for noncompliance with the insurer's employer contribution requirements.
400 (6) A small employer health benefit plan may be nonrenewed:
401 (a) if a condition described in Subsection (2) exists; or
402 (b) for noncompliance with the insurer's minimum participation requirements.
403 (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
404 discontinued if after issuance of coverage the eligible employee:
405 (i) engages in an act or practice in connection with the coverage that constitutes fraud;
406 or
407 (ii) makes an intentional misrepresentation of material fact in connection with the
408 coverage.
409 (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
410 (i) 12 months after the date of discontinuance; and
411 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
412 to reenroll.
413 (c) At the time the eligible employee's coverage is discontinued under Subsection
414 (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
415 discontinued.
416 (d) An eligible employee may not be discontinued under this Subsection (7) because of
417 a fraud or misrepresentation that relates to health status.
418 (8) For purposes of this section, a reference to "plan sponsor" includes a reference to
419 the employer:
420 (a) with respect to coverage provided to an employer member of the association; and
421 (b) if the health benefit plan is made available by an insurer in the employer market
422 only through:
423 (i) an association;
424 (ii) a trust; or
425 (iii) a discretionary group.
426 (9) An insurer may modify a health benefit plan for a plan sponsor only:
427 (a) at the time of coverage renewal; and
428 (b) if the modification is effective uniformly among all plans with that product.
429 Section 6. Section 31A-8-402.5 is amended to read:
430 31A-8-402.5. Individual discontinuance and nonrenewal.
431 (1) (a) Except as otherwise provided in this section, a health benefit plan offered on an
432 individual basis is renewable and continues in force:
433 (i) with respect to all individuals or dependents; and
434 (ii) at the option of the individual.
435 (b) Subsection (1)(a) applies regardless of:
436 (i) whether the contract is issued through:
437 (A) a trust;
438 (B) an association;
439 (C) a discretionary group; or
440 (D) other similar grouping; or
441 (ii) the situs of delivery of the policy or contract.
442 (2) A health benefit plan may be discontinued or nonrenewed:
443 (a) for a network plan, if:
444 (i) the individual no longer lives, resides, or works in:
445 (A) the service area of the insurer; or
446 (B) the area for which the insurer is authorized to do business; and
447 (ii) coverage is terminated uniformly without regard to any health status-related factor
448 relating to any covered individual; or
449 (b) for coverage made available through an association, if:
450 (i) the individual's membership in the association ceases; and
451 (ii) the coverage is terminated uniformly without regard to any health status-related
452 factor relating to any covered individual.
453 (3) A health benefit plan may be discontinued if:
454 (a) a condition described in Subsection (2) exists;
455 (b) the individual fails to pay premiums or contributions in accordance with the terms
456 of the health benefit plan, including any timeliness requirements;
457 (c) the individual:
458 (i) performs an act or practice in connection with the coverage that constitutes fraud; or
459 (ii) makes an intentional misrepresentation of material fact under the terms of the
460 coverage;
461 (d) the insurer:
462 (i) elects to discontinue offering a particular health benefit [
463 issued for delivery in this state; and
464 (ii) (A) provides notice of the discontinuation in writing:
465 (I) to each individual provided coverage; and
466 (II) at least 90 days before the date the coverage will be discontinued;
467 (B) provides notice of the discontinuation in writing:
468 (I) to the commissioner; and
469 (II) at least three working days prior to the date the notice is sent to the affected
470 individuals;
471 (C) offers to each covered individual on a guaranteed issue basis, the option to
472 purchase all other individual health benefit [
473 insurer for individuals in that market; and
474 (D) acts uniformly without regard to any health status-related factor of covered
475 individuals or dependents of covered individuals who may become eligible for coverage; or
476 (e) the insurer:
477 (i) elects to discontinue all of the insurer's health benefit plans in the individual market;
478 and
479 (ii) (A) provides notice of the discontinuation in writing:
480 (I) to each individual provided coverage; and
481 (II) at least 180 days before the date the coverage will be discontinued;
482 (B) provides notice of the discontinuation in writing:
483 (I) to the commissioner in each state in which an affected insured individual is known
484 to reside; and
485 (II) at least 30 working days prior to the date the notice is sent to the affected
486 individuals;
487 (C) discontinues and nonrenews all health benefit plans the insurer issues or delivers
488 for issuance in the individual market; and
489 (D) acts uniformly without regard to any health status-related factor of covered
490 individuals or dependents of covered individuals who may become eligible for coverage.
491 Section 7. Section 31A-14-205.5 is enacted to read:
492 31A-14-205.5. Place of business address information -- Record retention.
493 (1) (a) A licensee under this chapter shall register and maintain with the commissioner:
494 (i) the address and the one or more telephone numbers of the licensee's principal place
495 of business; and
496 (ii) a valid business email address at which the commissioner may contact the licensee.
497 (b) A licensee shall notify the commissioner within 30 days of a change of any of the
498 following required to be registered with the commissioner under this section:
499 (i) an address;
500 (ii) a telephone number; or
501 (iii) a business email address.
502 (2) (a) Except as provided under Subsection (3), a licensee under this chapter shall
503 keep at the address of the principal place of business registered under Subsection (1), separate
504 and distinct books and records of the transactions consummated under the Utah license.
505 (b) The books and records described in Subsection (2)(a) shall:
506 (i) be in an organized form; and
507 (ii) be available to the commissioner for inspection upon reasonable notice.
508 (c) The books and records described in Subsection (2)(a) shall include the following:
509 (i) if the licensee is a foreign insurer, alien insurer, commercially domiciled insurer,
510 foreign title insurer, or foreign fraternal:
511 (A) a record of each insurance contract procured by or issued through the licensee, with
512 the names of the one or more insureds, the amount of premium and commissions or other
513 compensation, and the subject of the insurance;
514 (B) the name of any other producer, surplus lines producer, limited line producer,
515 consultant, managing general agent, or reinsurance intermediary from whom business is
516 accepted, and of a person to whom commissions or allowances of any kind are promised or
517 paid; and
518 (C) a record of the consumer complaints forwarded to the licensee by an insurance
519 regulator; and
520 (ii) any additional information that:
521 (A) is customary for a similar business; or
522 (B) may reasonably be required by the commissioner by rule made in accordance with
523 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
524 (3) Subsection (2) is satisfied if the books and records specified in Subsection (2) can
525 be obtained immediately from a central storage place or elsewhere by online computer
526 terminals located at the registered address.
527 (4) A licensee who represents only a single insurer satisfies Subsection (2) if the
528 insurer maintains the books and records pursuant to Subsection (2) at a place satisfying
529 Subsections (1) and (5).
530 (5) (a) The books and records maintained under Subsection (2) shall be available for
531 the inspection of the commissioner during the business hours for a period of time after the date
532 of the transaction as specified by the commissioner by rule, made in accordance with Title
533 63G, Chapter 3, Utah Administrative Rulemaking Act, but in no case for less than three
534 calendar years in addition to the current calendar year.
535 (b) Discarding a book or record after the applicable record retention period has expired
536 does not place the licensee in violation of a later-adopted longer record retention period.
537 Section 8. Section 31A-16-105 is amended to read:
538 31A-16-105. Registration of insurers.
539 (1) (a) An insurer that is authorized to do business in this state and that is a member of
540 an insurance holding company system shall register with the commissioner, except a foreign
541 insurer subject to registration requirements and standards adopted by statute or regulation in the
542 jurisdiction of its domicile, if the requirements and standards are substantially similar to those
543 contained in this section, Subsections 31A-16-106(1)(a) and (2) and either Subsection
544 31A-16-106(1)(b) or a statutory provision similar to the following: "Each registered insurer
545 shall keep current the information required to be disclosed in its registration statement by
546 reporting all material changes or additions within 15 days after the end of the month in which it
547 learns of each change or addition."
548 (b) An insurer that is subject to registration under this section shall register within 15
549 days after it becomes subject to registration, and annually thereafter by [
550 year for the previous calendar year, unless the commissioner for good cause extends the time
551 for registration and then at the end of the extended time period. The commissioner may require
552 any insurer authorized to do business in the state, which is a member of a holding company
553 system, and which is not subject to registration under this section, to furnish a copy of the
554 registration statement, the summary specified in Subsection (3), or any other information filed
555 by the insurer with the insurance regulatory authority of domiciliary jurisdiction.
556 (2) An insurer subject to registration shall file the registration statement with the
557 commissioner on a form and in a format prescribed by the National Association of Insurance
558 Commissioners, which shall contain the following current information:
559 (a) the capital structure, general financial condition, and ownership and management of
560 the insurer and any person controlling the insurer;
561 (b) the identity and relationship of every member of the insurance holding company
562 system;
563 (c) any of the following agreements in force, and transactions currently outstanding or
564 which have occurred during the last calendar year between the insurer and its affiliates:
565 (i) loans, other investments, or purchases, sales or exchanges of securities of the
566 affiliates by the insurer or of securities of the insurer by its affiliates;
567 (ii) purchases, sales, or exchanges of assets;
568 (iii) transactions not in the ordinary course of business;
569 (iv) guarantees or undertakings for the benefit of an affiliate which result in an actual
570 contingent exposure of the insurer's assets to liability, other than insurance contracts entered
571 into in the ordinary course of the insurer's business;
572 (v) all management agreements, service contracts, and all cost-sharing arrangements;
573 (vi) reinsurance agreements;
574 (vii) dividends and other distributions to shareholders; and
575 (viii) consolidated tax allocation agreements;
576 (d) any pledge of the insurer's stock, including stock of any subsidiary or controlling
577 affiliate, for a loan made to any member of the insurance holding company system;
578 (e) if requested by the commissioner, financial statements of or within an insurance
579 holding company system, including all affiliates:
580 (i) which may include annual audited financial statements filed with the United States
581 Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, or
582 the Securities Exchange Act of 1934, as amended; and
583 (ii) which request is satisfied by providing the commissioner with the most recently
584 filed parent corporation financial statements that have been filed with the United States
585 Securities and Exchange Commission;
586 (f) any other matters concerning transactions between registered insurers and any
587 affiliates as may be included in any subsequent registration forms adopted or approved by the
588 commissioner;
589 (g) statements that the insurer's board of directors oversees corporate governance and
590 internal controls and that the insurer's officers or senior management have approved,
591 implemented, and continue to maintain and monitor corporate governance and internal control
592 procedures; and
593 (h) any other information required by rule made by the commissioner in accordance
594 with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
595 (3) All registration statements shall contain a summary outlining all items in the
596 current registration statement representing changes from the prior registration statement.
597 (4) No information need be disclosed on the registration statement filed pursuant to
598 Subsection (2) if the information is not material for the purposes of this section. Unless the
599 commissioner by rule or order provides otherwise, sales, purchases, exchanges, loans or
600 extensions of credit, investments, or guarantees involving one-half of 1%, or less, of an
601 insurer's admitted assets as of the next preceding December 31 may not be considered material
602 for purposes of this section.
603 (5) Subject to Section 31A-16-106, each registered insurer shall report to the
604 commissioner a dividend or other distribution to shareholders within 15 business days
605 following the declaration of the dividend or distribution.
606 (6) Any person within an insurance holding company system subject to registration
607 shall provide complete and accurate information to an insurer if the information is reasonably
608 necessary to enable the insurer to comply with the provisions of this chapter.
609 (7) The commissioner shall terminate the registration of any insurer which
610 demonstrates that it no longer is a member of an insurance holding company system.
611 (8) The commissioner may require or allow two or more affiliated insurers subject to
612 registration under this section to file a consolidated registration statement.
613 (9) The commissioner may allow an insurer which is authorized to do business in this
614 state, and which is part of an insurance holding company system, to register on behalf of any
615 affiliated insurer which is required to register under Subsection (1) and to file all information
616 and material required to be filed under this section.
617 (10) This section does not apply to any insurer, information, or transaction if, and to
618 the extent that, the commissioner by rule or order exempts the insurer from this section.
619 (11) Any person may file with the commissioner a disclaimer of affiliation with any
620 authorized insurer, or a disclaimer of affiliation may be filed by any insurer or any member of
621 an insurance holding company system. The disclaimer shall fully disclose all material
622 relationships and bases for affiliation between the person and the insurer as well as the basis for
623 disclaiming the affiliation. A disclaimer of affiliation is considered to have been granted
624 unless the commissioner, within 30 days following receipt of a complete disclaimer, notifies
625 the filing party the disclaimer is disallowed. If disallowed, the disclaiming party may request
626 an administrative hearing, which shall be granted. The disclaiming party shall be relieved of its
627 duty to register under this section if approval of the disclaimer is granted by the commissioner,
628 or if the disclaimer is considered to have been approved.
629 (12) The ultimate controlling person of an insurer subject to registration shall also file
630 an annual enterprise risk report. The annual enterprise risk report shall, to the best of the
631 ultimate controlling person's knowledge and belief, identify the material risks within the
632 insurance holding company that could pose enterprise risk to the insurer. The annual enterprise
633 risk report shall be filed with the lead state commissioner of the insurance holding company
634 system as determined by the procedures within the Financial Analysis Handbook adopted by
635 the National Association of Insurance Commissioners.
636 (13) The failure to file a registration statement or any summary of the registration
637 statement or enterprise risk filing required by this section within the time specified for the
638 filing is a violation of this section.
639 Section 9. Section 31A-16a-101 is enacted to read:
640
641
642 31A-16a-101. Title -- Scope.
643 (1) This chapter is known as the "Risk Management and Own Risk and Solvency
644 Assessment Act."
645 (2) This chapter applies to an insurer domiciled in this state unless exempt pursuant to
646 Section 31A-16a-106.
647 Section 10. Section 31A-16a-102 is enacted to read:
648 31A-16a-102. Definitions.
649 As used in this chapter:
650 (1) "Insurance group," for the purpose of conducting an own risk and solvency
651 assessment, means those insurers and affiliates included within an insurance holding company
652 system as defined in Section 31A-1-301.
653 (2) "Insurer" means the same as that term is defined in Section 31A-1-301, except that
654 it does not include agency, authority, or instrumentality of the United States, its possessions
655 and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or
656 political subdivision of a state.
657 (3) "ORSA guidance manual" means the Ŝ→ current ←Ŝ version of the Own Risk and
657a Solvency
658 Assessment Guidance Manual developed and adopted by the National Association of Insurance
659 Commissioners and as amended from time to time.
660 (4) "ORSA summary report" means a confidential high-level summary of an insurer or
661 insurance group's own risk and solvency assessment.
662 (5) "Own risk and solvency assessment" means a confidential internal assessment,
663 appropriate to the nature, scale, and complexity of an insurer or insurance group, conducted by
664 that insurer or insurance group, of the material and relevant risks associated with the insurer or
665 insurance group's current business plan and the sufficiency of capital resources to support those
666 risks.
667 Section 11. Section 31A-16a-103 is enacted to read:
668 31A-16a-103. Risk management framework.
669 An insurer shall maintain a risk management framework to assist the insurer with
670 identifying, assessing, monitoring, managing, and reporting on its material and relevant risks.
671 This requirement may be satisfied if the insurance group of which the insurer is a member
672 maintains a risk management framework applicable to the operations of the insurer.
673 Section 12. Section 31A-16a-104 is enacted to read:
674 31A-16a-104. Own risk and solvency assessment requirement.
675 Subject to Section 31A-16a-106, an insurer, or the insurance group of which the insurer
676 is a member, shall regularly conduct an own risk and solvency assessment consistent with a
677 process comparable to the ORSA guidance manual. The insurer or insurance group shall
678 conduct the own risk and solvency assessment no less than annually but also at any time when
679 there are significant changes to the risk profile of the insurer or the insurance group of which
680 the insurer is a member.
681 Section 13. Section 31A-16a-105 is enacted to read:
682 31A-16a-105. ORSA summary report.
683 (1) (a) Upon the commissioner's request, and no more than once each year, an insurer
684 shall submit to the commissioner an ORSA summary report or any combination of reports that
685 together contain the information described in the ORSA guidance manual, applicable to the
686 insurer, the insurance group of which it is a member, or both.
687 (b) Notwithstanding a request from the commissioner, if the insurer is a member of an
688 insurance group, the insurer shall submit the one or more reports required by this Subsection
689 (1) if the commissioner is the lead state commissioner of the insurance group as determined by
690 the procedures within the Financial Analysis Handbook adopted by the National Association of
691 Insurance Commissioners.
692 (2) The one or more reports required under Subsection (1) shall include a signature of
693 the insurer's or insurance group's chief risk officer or other executive having responsibility for
694 the oversight of the insurer's enterprise risk management process attesting to the best of the
695 executive's belief and knowledge that:
696 (a) the insurer applies the enterprise risk management process described in the ORSA
697 summary report; and
698 (b) a copy of the report has been provided to the insurer's board of directors or the
699 appropriate committee of the board of directors.
700 (3) An insurer may comply with Subsection (1) by providing the most recent and
701 substantially similar one or more reports provided by the insurer or another member of an
702 insurance group of which the insurer is a member to the commissioner of another state or to a
703 supervisor or regulator of a foreign jurisdiction, if that report provides information that is
704 comparable to the information described in the ORSA guidance manual. A report that is in a
705 language other than English must be accompanied by a translation of that report into the
706 English language.
707 Section 14. Section 31A-16a-106 is enacted to read:
708 31A-16a-106. Exemption.
709 (1) An insurer shall be exempt from the requirements of this chapter, if:
710 (a) the insurer has annual direct written and unaffiliated assumed premium, including
711 international direct and assumed premium, but excluding premiums reinsured with the Federal
712 Crop Insurance Corporation and Federal Flood Program, less than $500,000,000; and
713 (b) the insurance group of which the insurer is a member has annual direct written and
714 unaffiliated assumed premium, including international direct and assumed premium, but
715 excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood
716 Program, less than $1,000,000,000.
717 (2) If an insurer qualifies for exemption pursuant to Subsection (1)(a), but the
718 insurance group of which the insurer is a member does not qualify for exemption pursuant to
719 Subsection (1)(b), the ORSA summary report that is required pursuant to Section 31A-16a-105
720 shall include every insurer within the insurance group. This requirement may be satisfied by the
721 submission of more than one ORSA summary report for any combination of insurers provided
722 any combination of reports includes every insurer within the insurance group.
723 (3) If an insurer does not qualify for exemption pursuant to Subsection (1)(a), but the
724 insurance group of which it is a member qualifies for exemption pursuant to Subsection (1)(b),
725 the only ORSA summary report that may be required pursuant Section 31A-16a-105 shall be
726 the report applicable to that insurer.
727 (4) An insurer that does not qualify for exemption pursuant to Subsection (1) may
728 apply to the commissioner for a waiver from the requirements of this chapter based upon
729 unique circumstances. In deciding whether to grant the insurer's request for waiver, the
730 commissioner may consider the type and volume of business written, ownership and
731 organizational structure, and any other factor the commissioner considers relevant to the
732 insurer or insurance group of which the insurer is a member. If the insurer is part of an
733 insurance group with insurers domiciled in more than one state, the commissioner shall
734 coordinate with the lead state commissioner and with the other domiciliary commissioners in
735 considering whether to grant the insurer's request for a waiver.
736 (5) Notwithstanding the exemptions stated in this section:
737 (a) the commissioner may require that an insurer maintain a risk management
738 framework, conduct an own risk and solvency assessment, and file an ORSA summary report
739 based on unique circumstances, including the type and volume of business written, ownership
740 and organizational structure, federal agency requests, and international supervisor requests; or
741 (b) the commissioner may require that an insurer maintain a risk management
742 framework, conduct an own risk and solvency assessment and file an ORSA summary report if
743 the insurer has risk-based capital for company action level event as set forth in Sections
744 31A-17-601 through 31A-17-613, meets one or more of the standards of an insurer considered
745 to be in hazardous financial condition as defined in Section 31A-27a-101, or otherwise exhibits
746 qualities of a troubled insurer as determined by the commissioner.
747 (6) If an insurer that qualifies for an exemption pursuant to Subsection (1)
748 subsequently no longer qualifies for that exemption due to changes in premium as reflected in
749 the insurer's most recent annual statement or in the most recent annual statements of the
750 insurers within the insurance group of which the insurer is a member, the insurer has one
751 calendar year following the calendar year the threshold is exceeded to comply with the
752 requirements of this chapter.
753 Section 15. Section 31A-16a-107 is enacted to read:
754 31A-16a-107. Contents of ORSA summary report.
755 (1) The ORSA summary report shall be prepared consistent with the ORSA guidance
756 manual, subject to the requirements of Subsection (2). Documentation supporting information
757 shall be maintained and made available upon examination or upon request of the
758 commissioner.
759 (2) The review of the ORSA summary report, and any additional requests for
760 information, shall be made using similar procedures as used in the analysis and examination of
761 multi-state or global insurers and insurance groups.
762 Section 16. Section 31A-16a-108 is enacted to read:
763 31A-16a-108. Confidentiality.
764 (1) (a) A document, material, or other information, including the ORSA summary
765 report, in the possession of or control of the department that is obtained by, created by, or
766 disclosed to the commissioner or any other person under this chapter, is recognized by this state
767 as being proprietary and to contain trade secrets. The document, material, or other information
768 is confidential and may not be subject to Title 63G, Chapter 2, Government Records Access
769 and Management Act, and may not be made public by the commissioner or any other person
770 without the permission of the insurer.
771 (b) Notwithstanding Subsection (1)(a), the commissioner may use a document,
772 material, or other information in furtherance of any regulatory or legal action brought as a part
773 of the official duties. The commissioner may not otherwise make the document, material, or
774 other information public without the prior written consent of the insurer.
775 (2) The commissioner and any person who receives a document, material, or other
776 information related to an own risk and solvency assessment, through examination or otherwise,
777 while acting under the authority of the commissioner or with whom the document, material, or
778 other information is shared pursuant to this chapter shall keep the document, material, or other
779 information confidential.
780 (3) To assist in the performance of the commissioner's regulatory duties, the
781 commissioner:
782 (a) may, upon request, share a document, material, or other information related to an
783 own risk solvency assessment, including a confidential document, material, or information
784 subject to Subsection (1), including proprietary and trade secret documents and materials with
785 other state, federal, and international financial regulatory agencies, including members of any
786 supervisory college as described in the Section 31A-16-108.5, with the National Association of
787 Insurance Commissioners and with any third-party consultants designated by the
788 commissioner, provided that the recipient agrees in writing to maintain the confidentiality of
789 documents, materials, or other information related to an own risk and solvency assessment and
790 has verified in writing the legal authority to maintain confidentiality;
791 (b) may receive a document, material, or other information related to an own risk and
792 solvency assessment, including an otherwise confidential document, material, or information,
793 including proprietary and trade secret information or documents, from regulatory officials of
794 other foreign or domestic jurisdictions, including members of any supervisory college as
795 described in Section 31A-16-108.5 and from the National Association of Insurance
796 Commissioners, and shall maintain as confidential a document, material, or information
797 received with notice or the understanding that the document, material, or information is
798 confidential under the laws of the jurisdiction that is the source of the document, material, or
799 information; and
800 (c) shall enter into a written agreement with the National Association of Insurance
801 Commissioners or a third-party consultant governing sharing and use of information provided
802 pursuant to this chapter, consistent with this Subsection (3) that shall:
803 (i) specify procedures and protocols regarding the confidentiality and security of
804 information shared with the National Association of Insurance Commissioners or a third-party
805 consultant pursuant to this chapter, including procedures and protocols for sharing by the
806 National Association of Insurance Commissioners with other state regulators from states in
807 which the insurance group has domiciled insurers with the agreement providing that the
808 recipient agrees in writing to maintain the confidentiality of a document, material, or other
809 information related to an own risk and solvency assessment and verifies in writing the legal
810 authority to maintain confidentiality;
811 (ii) specify that ownership of information shared with the National Association of
812 Insurance Commissioners or a third-party consultant pursuant to this chapter remains with the
813 commissioner, and that the National Association of Insurance Commissioners' or a third-party
814 consultant's use of the information is subject to the direction of the commissioner;
815 (iii) prohibit the National Association of Insurance Commissioners or third-party
816 consultant from storing the information shared pursuant to this chapter in a permanent database
817 after the underlying analysis is completed;
818 (iv) require prompt notice to be given to an insurer whose confidential information in
819 the possession of the National Association of Insurance Commissioners or a third-party
820 consultant pursuant to this chapter is subject to a request or subpoena to the National
821 Association of Insurance Commissioners or a third-party consultant for disclosure or
822 production;
823 (v) require the National Association of Insurance Commissioners or a third-party
824 consultant to consent to intervention by an insurer in any judicial or administrative action in
825 which the National Association of Insurance Commissioners or a third-party consultant may be
826 required to disclose confidential information about the insurer shared with the National
827 Association of Insurance Commissioners or a third-party consultant pursuant to this chapter;
828 and
829 (vi) in the case of an agreement involving a third-party consultant, provide for the
830 insurer's written consent.
831 (4) The sharing of information or a document by the commissioner pursuant to this
832 chapter does not constitute a delegation of regulatory authority or rulemaking, and the
833 commissioner is solely responsible for the administration, execution, and enforcement of this
834 chapter.
835 (5) A waiver of an applicable claim of confidentiality in a document, proprietary and
836 trade-secret material, or other information related to an own risk and solvency assessment may
837 not occur as a result of disclosure of the own risk and solvency assessment related information
838 or a document to the commissioner under this section or as a result of sharing as authorized in
839 this chapter.
840 (6) A document, material, or other information in the possession or control of the
841 National Association of Insurance Commissioners or a third-party consultant pursuant to this
842 chapter is:
843 (a) confidential, not a public record, and not open to public inspection; and
844 (b) not subject to Title 63G, Chapter 2, Government Records Access and Management
845 Act.
846 Section 17. Section 31A-16a-109 is enacted to read:
847 31A-16a-109. Sanctions.
848 An insurer failing, without just cause, to timely file the ORSA summary report as
849 required in this chapter is required, after notice and hearing, is subject to a penalty under
850 Section 31A-2-308 for each day's delay, to be recovered by the commissioner and the penalty
851 so recovered shall be paid into the General Fund. The maximum penalty under this section is a
852 penalty permitted under Section 31A-2-308. The commissioner may reduce the penalty if the
853 insurer demonstrates to the commissioner that the imposition of the penalty would constitute a
854 financial hardship to the insurer.
855 Section 18. Section 31A-16a-110 is enacted to read:
856 31A-16a-110. Severability Clause.
857 If a provision of this chapter, or the application of this chapter to any person or
858 circumstance, is held invalid, the invalidation does not affect the provisions or applications of
859 this chapter that can be given effect without the invalid provision or application, and to that end
860 the provisions of this chapter are severable.
861 Section 19. Section 31A-17-404 is amended to read:
862 31A-17-404. Credit allowed a domestic ceding insurer against reserves for
863 reinsurance.
864 (1) A domestic ceding insurer is allowed credit for reinsurance as either an asset or a
865 reduction from liability for reinsurance ceded only if the reinsurer meets the requirements of
866 Subsection (3), (4), (5), (6), (7), or (8), subject to the following:
867 (a) Credit is allowed under Subsection (3), (4), or (5) only with respect to a cession of a
868 kind or class of business that the assuming insurer is licensed or otherwise permitted to write or
869 assume:
870 (i) in its state of domicile; or
871 (ii) in the case of a United States branch of an alien assuming insurer, in the state
872 through which it is entered and licensed to transact insurance or reinsurance.
873 (b) Credit is allowed under Subsection (5) or (6) only if the applicable requirements of
874 Subsection (9) are met.
875 (2) A domestic ceding insurer is allowed credit for reinsurance ceded:
876 (a) only if the reinsurance is payable in a manner consistent with Section 31A-22-1201;
877 (b) only to the extent that the accounting:
878 (i) is consistent with the terms of the reinsurance contract; and
879 (ii) clearly reflects:
880 (A) the amount and nature of risk transferred; and
881 (B) liability, including contingent liability, of the ceding insurer;
882 (c) only to the extent the reinsurance contract shifts insurance policy risk from the
883 ceding insurer to the assuming reinsurer in fact and not merely in form; and
884 (d) only if the reinsurance contract contains a provision placing on the reinsurer the
885 credit risk of all dealings with intermediaries regarding the reinsurance contract.
886 (3) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
887 assuming insurer that is licensed to transact insurance or reinsurance in this state.
888 (4) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
889 assuming insurer that is accredited by the commissioner as a reinsurer in this state.
890 (b) An insurer is accredited as a reinsurer if the insurer:
891 (i) files with the commissioner evidence of the insurer's submission to this state's
892 jurisdiction;
893 (ii) submits to the commissioner's authority to examine the insurer's books and records;
894 (iii) (A) is licensed to transact insurance or reinsurance in at least one state; or
895 (B) in the case of a United States branch of an alien assuming insurer, is entered
896 through and licensed to transact insurance or reinsurance in at least one state;
897 (iv) files annually with the commissioner a copy of the insurer's:
898 (A) annual statement filed with the insurance department of its state of domicile; and
899 (B) most recent audited financial statement; and
900 (v) (A) (I) has not had its accreditation denied by the commissioner within 90 days of
901 the day on which the insurer submits the information required by this Subsection (4); and
902 (II) maintains a surplus with regard to policyholders in an amount not less than
903 $20,000,000; or
904 (B) (I) has its accreditation approved by the commissioner; and
905 (II) maintains a surplus with regard to policyholders in an amount less than
906 $20,000,000.
907 (c) Credit may not be allowed a domestic ceding insurer if the assuming insurer's
908 accreditation is revoked by the commissioner after a notice and hearing.
909 (5) (a) A domestic ceding insurer is allowed a credit if:
910 (i) the reinsurance is ceded to an assuming insurer that is:
911 (A) domiciled in a state meeting the requirements of Subsection (5)(a)(ii); or
912 (B) in the case of a United States branch of an alien assuming insurer, is entered
913 through a state meeting the requirements of Subsection (5)(a)(ii);
914 (ii) the state described in Subsection (5)(a)(i) employs standards regarding credit for
915 reinsurance substantially similar to those applicable under this section; and
916 (iii) the assuming insurer or United States branch of an alien assuming insurer:
917 (A) maintains a surplus with regard to policyholders in an amount not less than
918 $20,000,000; and
919 (B) submits to the authority of the commissioner to examine its books and records.
920 (b) The requirements of Subsections (5)(a)(i) and (ii) do not apply to reinsurance ceded
921 and assumed pursuant to a pooling arrangement among insurers in the same holding company
922 system.
923 (6) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
924 assuming insurer that maintains a trust fund:
925 (i) created in accordance with rules made by the commissioner pursuant to Title 63G,
926 Chapter 3, Utah Administrative Rulemaking Act; and
927 (ii) in a qualified United States financial institution for the payment of a valid claim of:
928 (A) a United States ceding insurer of the assuming insurer;
929 (B) an assign of the United States ceding insurer; and
930 (C) a successor in interest to the United States ceding insurer.
931 (b) To enable the commissioner to determine the sufficiency of the trust fund described
932 in Subsection (6)(a), the assuming insurer shall:
933 (i) report annually to the commissioner information substantially the same as that
934 required to be reported on the National Association of Insurance Commissioners Annual
935 Statement form by a licensed insurer; and
936 (ii) (A) submit to examination of its books and records by the commissioner; and
937 (B) pay the cost of an examination.
938 (c) (i) Credit for reinsurance may not be granted under this Subsection (6) unless the
939 form of the trust and any amendment to the trust is approved by:
940 (A) the commissioner of the state where the trust is domiciled; or
941 (B) the commissioner of another state who, pursuant to the terms of the trust
942 instrument, accepts principal regulatory oversight of the trust.
943 (ii) The form of the trust and an amendment to the trust shall be filed with the
944 commissioner of every state in which a ceding insurer beneficiary of the trust is domiciled.
945 (iii) The trust instrument shall provide that a contested claim is valid and enforceable
946 upon the final order of a court of competent jurisdiction in the United States.
947 (iv) The trust shall vest legal title to its assets in its one or more trustees for the benefit
948 of:
949 (A) a United States ceding insurer of the assuming insurer;
950 (B) an assign of the United States ceding insurer; or
951 (C) a successor in interest to the United States ceding insurer.
952 (v) The trust and the assuming insurer are subject to examination as determined by the
953 commissioner.
954 (vi) The trust shall remain in effect for as long as the assuming insurer has an
955 outstanding obligation due under a reinsurance agreement subject to the trust.
956 (vii) No later than February 28 of each year, the trustee of the trust shall:
957 (A) report to the commissioner in writing the balance of the trust;
958 (B) list the trust's investments at the end of the preceding calendar year; and
959 (C) (I) certify the date of termination of the trust, if so planned; or
960 (II) certify that the trust will not expire prior to the following December 31.
961 (d) The following requirements apply to the following categories of assuming insurer:
962 (i) For a single assuming insurer:
963 (A) the trust fund shall consist of funds in trust in an amount not less than the assuming
964 insurer's liabilities attributable to reinsurance ceded by United States ceding insurers; and
965 (B) the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000,
966 except as provided in Subsection (6)(d)(ii).
967 (ii) (A) At any time after the assuming insurer has permanently discontinued
968 underwriting new business secured by the trust for at least three full years, the commissioner
969 with principal regulatory oversight of the trust may authorize a reduction in the required
970 trusteed surplus, but only after a finding, based on an assessment of the risk, that the new
971 required surplus level is adequate for the protection of United States ceding insurers,
972 policyholders, and claimants in light of reasonably foreseeable adverse loss development.
973 (B) The risk assessment may involve an actuarial review, including an independent
974 analysis of reserves and cash flows, and shall consider all material risk factors, including, when
975 applicable, the lines of business involved, the stability of the incurred loss estimates, and the
976 effect of the surplus requirements on the assuming insurer's liquidity or solvency.
977 (C) The minimum required trusteed surplus may not be reduced to an amount less than
978 30% of the assuming insurer's liabilities attributable to reinsurance ceded by United States
979 ceding insurers covered by the trust.
980 (iii) For a group acting as assuming insurer, including incorporated and individual
981 unincorporated underwriters:
982 (A) for reinsurance ceded under a reinsurance agreement with an inception,
983 amendment, or renewal date on or after August 1, 1995, the trust shall consist of a trusteed
984 account in an amount not less than the respective underwriters' several liabilities attributable to
985 business ceded by the one or more United States domiciled ceding insurers to an underwriter of
986 the group;
987 (B) for reinsurance ceded under a reinsurance agreement with an inception date on or
988 before July 31, 1995, and not amended or renewed after July 31, 1995, notwithstanding the
989 other provisions of this chapter, the trust shall consist of a trusteed account in an amount not
990 less than the respective underwriters' several insurance and reinsurance liabilities attributable to
991 business written in the United States;
992 (C) in addition to a trust described in Subsection (6)(d)(iii)(A) or (B), the group shall
993 maintain in trust a trusteed surplus of which $100,000,000 is held jointly for the benefit of the
994 one or more United States domiciled ceding insurers of a member of the group for all years of
995 account;
996 (D) the incorporated members of the group:
997 (I) may not be engaged in a business other than underwriting as a member of the group;
998 and
999 (II) are subject to the same level of regulation and solvency control by the group's
1000 domiciliary regulator as are the unincorporated members; and
1001 (E) within 90 days after the day on which the group's financial statements are due to be
1002 filed with the group's domiciliary regulator, the group shall provide to the commissioner:
1003 (I) an annual certification by the group's domiciliary regulator of the solvency of each
1004 underwriter member; or
1005 (II) if a certification is unavailable, a financial statement, prepared by an independent
1006 public accountant, of each underwriter member of the group.
1007 (iv) For a group of incorporated underwriters under common administration, the group
1008 shall:
1009 (A) have continuously transacted an insurance business outside the United States for at
1010 least three years immediately preceding the day on which the group makes application for
1011 accreditation;
1012 (B) maintain aggregate policyholders' surplus of at least $10,000,000,000;
1013 (C) maintain a trust fund in an amount not less than the group's several liabilities
1014 attributable to business ceded by the one or more United States domiciled ceding insurers to a
1015 member of the group pursuant to a reinsurance contract issued in the name of the group;
1016 (D) in addition to complying with the other provisions of this Subsection (6)(d)(iv),
1017 maintain a joint trusteed surplus of which $100,000,000 is held jointly for the benefit of the one
1018 or more United States domiciled ceding insurers of a member of the group as additional
1019 security for these liabilities; and
1020 (E) within 90 days after the day on which the group's financial statements are due to be
1021 filed with the group's domiciliary regulator, make available to the commissioner:
1022 (I) an annual certification of each underwriter member's solvency by the member's
1023 domiciliary regulator; and
1024 (II) a financial statement of each underwriter member of the group prepared by an
1025 independent public accountant.
1026 (7) If reinsurance is ceded to an assuming insurer not meeting the requirements of
1027 Subsection (3), (4), (5), or (6), a domestic ceding insurer is allowed credit only as to the
1028 insurance of a risk located in a jurisdiction where the reinsurance is required by applicable law
1029 or regulation of that jurisdiction.
1030 (8) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
1031 assuming insurer that secures its obligations in accordance with this Subsection (8):
1032 (a) The insurer shall be certified by the commissioner as a reinsurer in this state.
1033 (b) To be eligible for certification, the assuming insurer shall:
1034 (i) be domiciled and licensed to transact insurance or reinsurance in a qualified
1035 jurisdiction, as determined by the commissioner pursuant to Subsection (8)(d);
1036 (ii) maintain minimum capital and surplus, or its equivalent, in an amount to be
1037 determined by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
1038 3, Utah Administrative Rulemaking Act;
1039 (iii) maintain financial strength ratings from two or more rating agencies considered
1040 acceptable by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
1041 3, Utah Administrative Rulemaking Act; and
1042 (iv) agree to:
1043 (A) submit to the jurisdiction of this state;
1044 (B) appoint the commissioner as its agent for service of process in this state;
1045 (C) provide security for 100% of the assuming insurer's liabilities attributable to
1046 reinsurance ceded by United States ceding insurers if it resists enforcement of a final United
1047 States judgment;
1048 (D) agree to meet applicable information filing requirements as determined by the
1049 commissioner including an application for certification, a renewal and on an ongoing basis; and
1050 (E) any other requirements for certification considered relevant by the commissioner.
1051 (c) An association, including incorporated and individual unincorporated underwriters,
1052 may be a certified reinsurer. To be eligible for certification, in addition to satisfying
1053 requirements of Subsections (8)(a) and (b), the association:
1054 (i) shall satisfy its minimum capital and surplus requirements through the capital and
1055 surplus equivalents, net of liabilities, of the association and its members, which shall include a
1056 joint central fund that may be applied to any unsatisfied obligation of the association or any of
1057 its members in an amount determined by the commissioner to provide adequate protection;
1058 (ii) may not have incorporated members of the association engaged in any business
1059 other than underwriting as a member of the association;
1060 (iii) shall be subject to the same level of regulation and solvency control of the
1061 incorporated members of the association by the association's domiciliary regulator as are the
1062 unincorporated members; and
1063 (iv) within 90 days after its financial statements are due to be filed with the
1064 association's domiciliary regulator provide:
1065 (A) to the commissioner an annual certification by the association's domiciliary
1066 regulator of the solvency of each underwriter member; or
1067 (B) if a certification is unavailable, financial statements prepared by independent
1068 public accountants, of each underwriter member of the association.
1069 (d) The commissioner shall create and publish a list of qualified jurisdictions under
1070 which an assuming insurer licensed and domiciled in the jurisdiction is eligible to be
1071 considered for certification by the commissioner as a certified reinsurer.
1072 (i) To determine whether the domiciliary jurisdiction of a non-United States assuming
1073 insurer is eligible to be recognized as a qualified jurisdiction, the commissioner:
1074 (A) shall evaluate the appropriateness and effectiveness of the reinsurance supervisory
1075 system of the jurisdiction, both initially and on an ongoing basis;
1076 (B) shall consider the rights, the benefits, and the extent of reciprocal recognition
1077 afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the
1078 United States;
1079 (C) shall require the qualified jurisdiction to share information and cooperate with the
1080 commissioner with respect to all certified reinsurers domiciled within that jurisdiction; and
1081 (D) may not recognize a jurisdiction as a qualified jurisdiction if the commissioner has
1082 determined that the jurisdiction does not adequately and promptly enforce final United States
1083 judgments and arbitration awards.
1084 (ii) The commissioner may consider additional factors in determining a qualified
1085 jurisdiction.
1086 (iii) A list of qualified jurisdictions shall be published through the National
1087 Association of Insurance Commissioners' Committee Process and the commissioner shall:
1088 (A) consider this list in determining qualified jurisdictions; and
1089 (B) if the commissioner approves a jurisdiction as qualified that does not appear on the
1090 National Association of Insurance Commissioner's list of qualified jurisdictions, provide
1091 thoroughly documented justification in accordance with criteria to be developed by rule made
1092 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1093 (iv) United States jurisdictions that meet the requirement for accreditation under the
1094 National Association of Insurance Commissioners' financial standards and accreditation
1095 program shall be recognized as qualified jurisdictions.
1096 (v) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction,
1097 the commissioner may suspend the reinsurer's certification indefinitely, in lieu of revocation.
1098 (e) The commissioner shall:
1099 (i) assign a rating to each certified reinsurer, giving due consideration to the financial
1100 strength ratings that have been assigned by rating agencies considered acceptable to the
1101 commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
1102 Rulemaking Act; and
1103 (ii) publish a list of all certified reinsurers and their ratings.
1104 (f) A certified reinsurer shall secure obligations assumed from United States ceding
1105 insurers under this Subsection (8) at a level consistent with its rating, as specified in rules made
1106 by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
1107 Rulemaking Act.
1108 (i) For a domestic ceding insurer to qualify for full financial statement credit for
1109 reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a
1110 form acceptable to the commissioner and consistent with Section 31A-17-404.1, or in a
1111 multibeneficiary trust in accordance with Subsections (5), (6), and (7), except as otherwise
1112 provided in this Subsection (8).
1113 (ii) If a certified reinsurer maintains a trust to fully secure its obligations subject to
1114 Subsections (5), (6), and (7), and chooses to secure its obligations incurred as a certified
1115 reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate
1116 trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a
1117 certified reinsurer with reduced security as permitted by this Subsection (8) or comparable laws
1118 of other United States jurisdictions and for its obligations subject to Subsections (5), (6), and
1119 (7).
1120 (iii) It shall be a condition to the grant of certification under this Subsection (8) that the
1121 certified reinsurer shall have bound itself[
1122 (A) by the language of the trust and agreement with the commissioner with principal
1123 regulatory oversight of the trust account[
1124 (B) upon termination of the trust account, to fund, [
1125
1126 account.
1127 (iv) The minimum trusteed surplus requirements provided in Subsections (5), (6), and
1128 (7) are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer
1129 for the purpose of securing obligations incurred under this Subsection (8), except that the trust
1130 shall maintain a minimum trusteed surplus of $10,000,000.
1131 (v) With respect to obligations incurred by a certified reinsurer under this Subsection
1132 (8), if the security is insufficient, the commissioner:
1133 (A) shall reduce the allowable credit by an amount proportionate to the deficiency; and
1134 (B) may impose further reductions in allowable credit upon finding that there is a
1135 material risk that the certified reinsurer's obligations will not be paid in full when due.
1136 (vi) For purposes of this Subsection (8), a certified reinsurer whose certification has
1137 been terminated for any reason shall be treated as a certified reinsurer required to secure 100%
1138 of its obligations.
1139 (A) As used in this Subsection (8), the term "terminated" refers to revocation,
1140 suspension, voluntary surrender, and inactive status.
1141 (B) If the commissioner continues to assign a higher rating as permitted by other
1142 provisions of this section, the requirement under this Subsection (8)(f)(vi) does not apply to a
1143 certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.
1144 (g) If an applicant for certification has been certified as a reinsurer in a National
1145 Association of Insurance Commissioners' accredited jurisdiction, the commissioner may:
1146 (i) defer to that jurisdiction's certification;
1147 (ii) defer to the rating assigned by that jurisdiction; and
1148 (iii) consider such reinsurer to be a certified reinsurer in this state.
1149 (h) (i) A certified reinsurer that ceases to assume new business in this state may request
1150 to maintain its certification in inactive status in order to continue to qualify for a reduction in
1151 security for its in-force business.
1152 (ii) An inactive certified reinsurer shall continue to comply with all applicable
1153 requirements of this Subsection (8).
1154 (iii) The commissioner shall assign a rating to a reinsurer that qualifies under this
1155 Subsection (8)(h), that takes into account, if relevant, the reasons why the reinsurer is not
1156 assuming new business.
1157 (9) Reinsurance credit may not be allowed a domestic ceding insurer unless the
1158 assuming insurer under the reinsurance contract submits to the jurisdiction of Utah courts by:
1159 (a) (i) being an admitted insurer; and
1160 (ii) submitting to jurisdiction under Section 31A-2-309;
1161 (b) having irrevocably appointed the commissioner as the domestic ceding insurer's
1162 agent for service of process in an action arising out of or in connection with the reinsurance,
1163 which appointment is made under Section 31A-2-309; or
1164 (c) agreeing in the reinsurance contract:
1165 (i) that if the assuming insurer fails to perform its obligations under the terms of the
1166 reinsurance contract, the assuming insurer, at the request of the ceding insurer, shall:
1167 (A) submit to the jurisdiction of a court of competent jurisdiction in a state of the
1168 United States;
1169 (B) comply with all requirements necessary to give the court jurisdiction; and
1170 (C) abide by the final decision of the court or of an appellate court in the event of an
1171 appeal; and
1172 (ii) to designate the commissioner or a specific attorney licensed to practice law in this
1173 state as its attorney upon whom may be served lawful process in an action, suit, or proceeding
1174 instituted by or on behalf of the ceding company.
1175 (10) Submitting to the jurisdiction of Utah courts under Subsection (9) does not
1176 override a duty or right of a party under the reinsurance contract, including a requirement that
1177 the parties arbitrate their disputes.
1178 (11) If an assuming insurer does not meet the requirements of Subsection (3), (4), or
1179 (5), the credit permitted by Subsection (6) or (8) may not be allowed unless the assuming
1180 insurer agrees in the trust instrument to the following conditions:
1181 (a) (i) Notwithstanding any other provision in the trust instrument, if an event
1182 described in Subsection (11)(a)(ii) occurs the trustee shall comply with:
1183 (A) an order of the commissioner with regulatory oversight over the trust; or
1184 (B) an order of a court of competent jurisdiction directing the trustee to transfer to the
1185 commissioner with regulatory oversight all of the assets of the trust fund.
1186 (ii) This Subsection (11)(a) applies if:
1187 (A) the trust fund is inadequate because the trust contains an amount less than the
1188 amount required by Subsection (6)(d); or
1189 (B) the grantor of the trust is:
1190 (I) declared insolvent; or
1191 (II) placed into receivership, rehabilitation, liquidation, or similar proceeding under the
1192 laws of its state or country of domicile.
1193 (b) The assets of a trust fund described in Subsection (11)(a) shall be distributed by and
1194 a claim shall be filed with and valued by the commissioner with regulatory oversight in
1195 accordance with the laws of the state in which the trust is domiciled that are applicable to the
1196 liquidation of a domestic insurance company.
1197 (c) If the commissioner with regulatory oversight determines that the assets of the trust
1198 fund, or any part of the assets, are not necessary to satisfy the claims of the one or more United
1199 States ceding insurers of the grantor of the trust, the assets, or a part of the assets, shall be
1200 returned by the commissioner with regulatory oversight to the trustee for distribution in
1201 accordance with the trust instrument.
1202 (d) A grantor shall waive any right otherwise available to it under United States law
1203 that is inconsistent with this Subsection (11).
1204 (12) If an accredited or certified reinsurer ceases to meet the requirements for
1205 accreditation or certification, the commissioner may suspend or revoke the reinsurer's
1206 accreditation or certification.
1207 (a) The commissioner shall give the reinsurer notice and opportunity for hearing.
1208 (b) The suspension or revocation may not take effect until after the commissioner's
1209 order after a hearing, unless:
1210 (i) the reinsurer waives its right to hearing;
1211 (ii) the commissioner's order is based on:
1212 (A) regulatory action by the reinsurer's domiciliary jurisdiction; or
1213 (B) the voluntary surrender or termination of the reinsurer's eligibility to transact
1214 insurance or reinsurance business in its domiciliary jurisdiction or primary certifying state
1215 under Subsection (8)(g); or
1216 (iii) the commissioner's finding that an emergency requires immediate action and a
1217 court of competent jurisdiction has not stayed the commissioner's action.
1218 (c) While a reinsurer's accreditation or certification is suspended, no reinsurance
1219 contract issued or renewed after the effective date of the suspension qualifies for credit except
1220 to the extent that the reinsurer's obligations under the contract are secured in accordance with
1221 Section 31A-17-404.1.
1222 (d) If a reinsurer's accreditation or certification is revoked, no credit for reinsurance
1223 may be granted after the effective date of the revocation except to the extent that the reinsurer's
1224 obligations under the contract are secured in accordance with Subsection (8)(f) or Section
1225 31A-17-404.1.
1226 (13) (a) A ceding insurer shall take steps to manage its reinsurance recoverables
1227 proportionate to its own book of business.
1228 (b) (i) A domestic ceding insurer shall notify the commissioner within 30 days after
1229 reinsurance recoverables from any single assuming insurer, or group of affiliated assuming
1230 insurers:
1231 (A) exceeds 50% of the domestic ceding insurer's last reported surplus to
1232 policyholders; or
1233 (B) after it is determined that reinsurance recoverables from any single assuming
1234 insurer, or group of affiliated assuming insurers, is likely to exceed 50% of the domestic ceding
1235 insurer's last reported surplus to policyholders.
1236 (ii) The notification required by Subsection (13)(b)(i) shall demonstrate that the
1237 exposure is safely managed by the domestic ceding insurer.
1238 (c) A ceding insurer shall take steps to diversify its reinsurance program.
1239 (d) (i) A domestic ceding insurer shall notify the commissioner within 30 days after
1240 ceding or being likely to cede more than 20% of the ceding insurer's gross written premium in
1241 the prior calendar year to any:
1242 (A) single assuming insurer; or
1243 (B) group of affiliated assuming insurers.
1244 (ii) The notification shall demonstrate that the exposure is safely managed by the
1245 domestic ceding insurer.
1246 Section 20. Section 31A-17-603 is amended to read:
1247 31A-17-603. Company action level event.
1248 (1) "Company action level event" means any of the following events:
1249 (a) the filing of an RBC report by an insurer or health organization that indicates that:
1250 (i) the insurer's or health organization's total adjusted capital is greater than or equal to
1251 its regulatory action level RBC but less than its company action level RBC;
1252 (ii) if a life [
1253 [
1254 (A) has total adjusted capital that is greater than or equal to its company action level
1255 RBC but less than the product of its authorized control level RBC and 3.0; and
1256 (B) triggers the trend test determined in accordance with the trend test calculation
1257 included in the life [
1258 (iii) if a property and casualty insurer, the insurer has:
1259 (A) total adjusted capital that is greater than or equal to its company action level RBC,
1260 but less than the product of its authorized control level RBC and 3.0; and
1261 (B) triggers the trend test determined in accordance with the trend test calculation
1262 included in the property and casualty RBC instructions;
1263 (b) the notification by the commissioner to the insurer or health organization of an
1264 adjusted RBC report that indicates an event in Subsection (1)(a), provided the insurer or health
1265 organization does not challenge the adjusted RBC report under Section 31A-17-607; or
1266 (c) if, pursuant to Section 31A-17-607, an insurer or health organization challenges an
1267 adjusted RBC report that indicates the event in Subsection (1)(a), the notification by the
1268 commissioner to the insurer or health organization that after a hearing the commissioner rejects
1269 the insurer's or health organization's challenge.
1270 (2) (a) In the event of a company action level event, the insurer or health organization
1271 shall prepare and submit to the commissioner an RBC plan that shall:
1272 (i) identify the conditions that contribute to the company action level event;
1273 (ii) contain proposals of corrective actions that the insurer or health organization
1274 intends to take and that are expected to result in the elimination of the company action level
1275 event;
1276 (iii) provide projections of the insurer's or health organization's financial results in the
1277 current year and at least the four succeeding years, both in the absence of proposed corrective
1278 actions and giving effect to the proposed corrective actions, including projections of:
1279 (A) statutory operating income;
1280 (B) net income;
1281 (C) capital;
1282 (D) surplus; and
1283 (E) RBC levels;
1284 (iv) identify the key assumptions impacting the insurer's or health organization's
1285 projections and the sensitivity of the projections to the assumptions; and
1286 (v) identify the quality of, and problems associated with, the insurer's or health
1287 organization's business, including its assets, anticipated business growth and associated surplus
1288 strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each
1289 case.
1290 (b) For purposes of Subsection (2)(a)(iii), the projections for both new and renewal
1291 business may include separate projections for each major line of business and separately
1292 identify each significant income, expense, and benefit component.
1293 (3) The RBC plan shall be submitted:
1294 (a) within 45 days of the company action level event; or
1295 (b) if the insurer or health organization challenges an adjusted RBC report pursuant to
1296 Section 31A-17-607, within 45 days after notification to the insurer or health organization that
1297 after a hearing the commissioner rejects the insurer's or health organization's challenge.
1298 (4) (a) Within 60 days after the submission by an insurer or health organization of an
1299 RBC plan to the commissioner, the commissioner shall notify the insurer or health organization
1300 whether the RBC plan:
1301 (i) shall be implemented; or
1302 (ii) is unsatisfactory.
1303 (b) If the commissioner determines the RBC plan is unsatisfactory, the notification to
1304 the insurer or health organization shall set forth the reasons for the determination, and may
1305 propose revisions that will render the RBC plan satisfactory. Upon notification from the
1306 commissioner, the insurer or health organization shall:
1307 (i) prepare a revised RBC plan that incorporates any revision proposed by the
1308 commissioner; and
1309 (ii) submit the revised RBC plan to the commissioner:
1310 (A) within 45 days after the notification from the commissioner; or
1311 (B) if the insurer challenges the notification from the commissioner under Section
1312 31A-17-607, within 45 days after a notification to the insurer or health organization that after a
1313 hearing the commissioner rejects the insurer's or health organization's challenge.
1314 (5) In the event of a notification by the commissioner to an insurer or health
1315 organization that the insurer's or health organization's RBC plan or revised RBC plan is
1316 unsatisfactory, the commissioner may specify in the notification that the notification constitutes
1317 a regulatory action level event subject to the insurer's or health organization's right to a hearing
1318 under Section 31A-17-607.
1319 (6) Every domestic insurer or health organization that files an RBC plan or revised
1320 RBC plan with the commissioner shall file a copy of the RBC plan or revised RBC plan with
1321 the insurance commissioner in any state in which the insurer or health organization is
1322 authorized to do business if:
1323 (a) the state has an RBC provision substantially similar to Subsection 31A-17-608(1);
1324 and
1325 (b) the insurance commissioner of that state notifies the insurer or health organization
1326 of its request for the filing in writing, in which case the insurer or health organization shall file
1327 a copy of the RBC plan or revised RBC plan in that state no later than the later of:
1328 (i) 15 days after the receipt of notice to file a copy of its RBC plan or revised RBC plan
1329 with that state; or
1330 (ii) the date on which the RBC plan or revised RBC plan is filed under Subsections (3)
1331 and (4).
1332 Section 21. Section 31A-22-505 is amended to read:
1333 31A-22-505. Association groups.
1334 (1) A policy is subject to the requirements of this section if the policy is issued as
1335 policyholder to an association or to the trustees of a fund established, created, or maintained for
1336 the benefit of members of one or more associations:
1337 (a) with a minimum membership of 100 persons[
1338 (b) with a constitution and bylaws[
1339 (c) having a shared or common purpose that is not primarily a business or customer
1340 relationship; and
1341 (d) that has been in active existence for at least two years[
1342
1343 [
1344 of the members, one or more of the preceding entities, or all of any classes of these named
1345 entities for the benefit of persons other than the employees' employer, or any officials,
1346 representatives, trustees, or agents of the employer or association.
1347 [
1348 associations, by employer members, from funds contributed by the covered persons, or from
1349 any combination of these. Except as provided under Section 31A-22-512, a policy on which no
1350 part of the premium is contributed by the covered persons, specifically for their insurance, is
1351 required to insure all eligible persons.
1352 Section 22. Section 31A-22-605 is amended to read:
1353 31A-22-605. Accident and health insurance standards.
1354 (1) The purposes of this section include:
1355 (a) reasonable standardization and simplification of terms and coverages of individual
1356 and franchise accident and health insurance policies, including accident and health insurance
1357 contracts of insurers licensed under Chapter 7, Nonprofit Health Service Insurance
1358 Corporations, and Chapter 8, Health Maintenance Organizations and Limited Health Plans, to
1359 facilitate public understanding and comparison in purchasing;
1360 (b) elimination of provisions contained in individual and franchise accident and health
1361 insurance contracts that may be misleading or confusing in connection with either the purchase
1362 of those types of coverages or the settlement of claims; and
1363 (c) full disclosure in the sale of individual and franchise accident and health insurance
1364 contracts.
1365 (2) As used in this section:
1366 (a) "Direct response insurance policy" means an individual insurance policy solicited
1367 and sold without the policyholder having direct contact with a natural person intermediary.
1368 (b) "Medicare" means the same as that term is defined in Subsection 31A-22-620(1)(e).
1369 (c) "Medicare supplement policy" means the same as that term is defined in Subsection
1370 31A-22-620(1)(f).
1371 (3) This section applies to all individual and franchise accident and health policies.
1372 (4) The commissioner shall adopt rules, made in accordance with Title 63G, Chapter 3,
1373 Utah Administrative Rulemaking Act, relating to the following matters:
1374 (a) standards for the manner and content of policy provisions, and disclosures to be
1375 made in connection with the sale of policies covered by this section, dealing with at least the
1376 following matters:
1377 (i) terms of renewability;
1378 (ii) initial and subsequent conditions of eligibility;
1379 (iii) nonduplication of coverage provisions;
1380 (iv) coverage of dependents;
1381 (v) preexisting conditions;
1382 (vi) termination of insurance;
1383 (vii) probationary periods;
1384 (viii) limitations;
1385 (ix) exceptions;
1386 (x) reductions;
1387 (xi) elimination periods;
1388 (xii) requirements for replacement;
1389 (xiii) recurrent conditions;
1390 (xiv) coverage of persons eligible for Medicare; and
1391 (xv) definition of terms;
1392 (b) minimum standards for benefits under each of the following categories of coverage
1393 in policies covered in this section:
1394 (i) basic hospital expense coverage;
1395 (ii) basic medical-surgical expense coverage;
1396 (iii) hospital confinement indemnity coverage;
1397 (iv) major medical expense coverage;
1398 (v) income replacement coverage;
1399 (vi) accident only coverage;
1400 (vii) specified disease or specified accident coverage;
1401 (viii) limited benefit health coverage; and
1402 (ix) nursing home and long-term care coverage;
1403 (c) the content and format of the outline of coverage, in addition to that required under
1404 Subsection (6);
1405 (d) the method of identification of policies and contracts based upon coverages
1406 provided; and
1407 (e) rating practices.
1408 (5) Nothing in Subsection (4)(b) precludes the issuance of policies that combine
1409 categories of coverage in [
1410 categories meets the standards of a component category of coverage.
1411 (6) The commissioner may adopt rules, made in accordance with Title 63G, Chapter 3,
1412 Utah Administrative Rulemaking Act, relating to the following matters:
1413 (a) establishing disclosure requirements for insurance policies covered in this section,
1414 designed to adequately inform the prospective insured of the need for and extent of the
1415 coverage offered, and requiring that this disclosure be furnished to the prospective insured with
1416 the application form, unless it is a direct response insurance policy;
1417 (b) (i) prescribing caption or notice requirements designed to inform prospective
1418 insureds that particular insurance coverages are not Medicare Supplement coverages;
1419 (ii) the requirements of Subsection (6)(b)(i) apply to all insurance policies and
1420 certificates sold to persons eligible for Medicare; and
1421 (c) requiring the disclosures or information brochures to be furnished to the
1422 prospective insured on direct response insurance policies, upon his request or, in any event, no
1423 later than the time of the policy delivery.
1424 (7) A policy covered by this section may be issued only if it meets the minimum
1425 standards established by the commissioner under Subsection (4), an outline of coverage
1426 accompanies the policy or is delivered to the applicant at the time of the application, and,
1427 except with respect to direct response insurance policies, an acknowledged receipt is provided
1428 to the insurer. The outline of coverage shall include:
1429 (a) a statement identifying the applicable categories of coverage provided by the policy
1430 as prescribed under Subsection (4);
1431 (b) a description of the principal benefits and coverage;
1432 (c) a statement of the exceptions, reductions, and limitations contained in the policy;
1433 (d) a statement of the renewal provisions, including any reservation by the insurer of a
1434 right to change premiums;
1435 (e) a statement that the outline is a summary of the policy issued or applied for and that
1436 the policy should be consulted to determine governing contractual provisions; and
1437 (f) any other contents the commissioner prescribes.
1438 (8) If a policy is issued on a basis other than that applied for, the outline of coverage
1439 shall accompany the policy when it is delivered and it shall clearly state that it is not the policy
1440 for which application was made.
1441 (9) (a) Notwithstanding Subsection 31A-22-606(1), limited accident and health
1442 policies or certificates issued to persons eligible for Medicare shall contain a notice
1443 prominently printed on or attached to the cover or front page which states that the policyholder
1444 or certificate holder has the right to return the policy for any reason within 30 days after its
1445 delivery and to have the premium refunded.
1446 (b) This Subsection (9) does not apply to a policy issued to an employer group.
1447 Section 23. Section 31A-22-610.5 is amended to read:
1448 31A-22-610.5. Dependent coverage.
1449 (1) As used in this section, "child" has the same meaning as defined in Section
1450 78B-12-102.
1451 (2) (a) Any individual or group accident and health insurance policy or health
1452 maintenance organization contract that provides coverage for a policyholder's or certificate
1453 holder's dependent may not terminate coverage of an unmarried dependent by reason of the
1454 dependent's age before the dependent's 26th birthday and shall, upon application, provide
1455 coverage for all unmarried dependents up to age 26.
1456 (b) The cost of coverage for unmarried dependents 19 to 26 years of age shall be
1457 included in the premium on the same basis as other dependent coverage.
1458 (c) This section does not prohibit the employer from requiring the employee to pay all
1459 or part of the cost of coverage for unmarried dependents.
1460 (d) An individual health insurance policy, group health insurance policy, or health
1461 maintenance organization shall continue in force coverage for a dependent through the last day
1462 of the month in which the dependent ceases to be a dependent:
1463 (i) if premiums are paid; and
1464 (ii) notwithstanding Section 31A-8-402.3, 31A-8-402.5, 31A-22-721, 31A-30-107.1,
1465 or 31A-30-107.3.
1466 (3) An individual or group accident and health insurance policy or health maintenance
1467 organization contract shall reinstate dependent coverage, and for purposes of all exclusions and
1468 limitations, shall treat the dependent as if the coverage had been in force since it was
1469 terminated; if:
1470 (a) the dependent has not reached the age of 26 by July 1, 1995;
1471 (b) the dependent had coverage prior to July 1, 1994;
1472 (c) prior to July 1, 1994, the dependent's coverage was terminated solely due to the age
1473 of the dependent; and
1474 (d) the policy has not been terminated since the dependent's coverage was terminated.
1475 (4) (a) When a parent is required by a court or administrative order to provide health
1476 insurance coverage for a child, an accident and health insurer may not deny enrollment of a
1477 child under the accident and health insurance plan of the child's parent on the grounds the
1478 child:
1479 (i) was born out of wedlock and is entitled to coverage under Subsection (5);
1480 (ii) was born out of wedlock and the custodial parent seeks enrollment for the child
1481 under the custodial parent's policy;
1482 (iii) is not claimed as a dependent on the parent's federal tax return; or
1483 (iv) does not reside with the parent or in the insurer's service area.
1484 (b) A child enrolled as required under Subsection (4)(a)(iv) is subject to the terms of
1485 the accident and health insurance plan contract pertaining to services received outside of an
1486 insurer's service area. A health maintenance organization shall comply with Section
1487 31A-8-502.
1488 (5) When a child has accident and health coverage through an insurer of a noncustodial
1489 parent, and when requested by the noncustodial or custodial parent, the insurer shall:
1490 (a) provide information to the custodial parent as necessary for the child to obtain
1491 benefits through that coverage, but the insurer or employer, or the agents or employees of either
1492 of them, are not civilly or criminally liable for providing information in compliance with this
1493 Subsection (5)(a), whether the information is provided pursuant to a verbal or written request;
1494 (b) permit the custodial parent or the service provider, with the custodial parent's
1495 approval, to submit claims for covered services without the approval of the noncustodial
1496 parent; and
1497 (c) make payments on claims submitted in accordance with Subsection (5)(b) directly
1498 to the custodial parent, the child who obtained benefits, the provider, or the state Medicaid
1499 agency.
1500 (6) When a parent is required by a court or administrative order to provide health
1501 coverage for a child, and the parent is eligible for family health coverage, the insurer shall:
1502 (a) permit the parent to enroll, under the family coverage, a child who is otherwise
1503 eligible for the coverage without regard to an enrollment season restrictions;
1504 (b) if the parent is enrolled but fails to make application to obtain coverage for the
1505 child, enroll the child under family coverage upon application of the child's other parent, the
1506 state agency administering the Medicaid program, or the state agency administering 42 U.S.C.
1507 Sec. 651 through 669, the child support enforcement program; and
1508 (c) (i) when the child is covered by an individual policy, not disenroll or eliminate
1509 coverage of the child unless the insurer is provided satisfactory written evidence that:
1510 (A) the court or administrative order is no longer in effect; or
1511 (B) the child is or will be enrolled in comparable accident and health coverage through
1512 another insurer which will take effect not later than the effective date of disenrollment; or
1513 (ii) when the child is covered by a group policy, not disenroll or eliminate coverage of
1514 the child unless the employer is provided with satisfactory written evidence, which evidence is
1515 also provided to the insurer, that Subsection (9)(c)(i), (ii) or (iii) has happened.
1516 (7) An insurer may not impose requirements on a state agency that has been assigned
1517 the rights of an individual eligible for medical assistance under Medicaid and covered for
1518 accident and health benefits from the insurer that are different from requirements applicable to
1519 an agent or assignee of any other individual so covered.
1520 (8) Insurers may not reduce their coverage of pediatric vaccines below the benefit level
1521 in effect on May 1, 1993.
1522 (9) When a parent is required by a court or administrative order to provide health
1523 coverage, which is available through an employer doing business in this state, the employer
1524 shall:
1525 (a) permit the parent to enroll under family coverage any child who is otherwise
1526 eligible for coverage without regard to any enrollment season restrictions;
1527 (b) if the parent is enrolled but fails to make application to obtain coverage of the child,
1528 enroll the child under family coverage upon application by the child's other parent, by the state
1529 agency administering the Medicaid program, or the state agency administering 42 U.S.C. Sec.
1530 651 through 669, the child support enforcement program;
1531 (c) not disenroll or eliminate coverage of the child unless the employer is provided
1532 satisfactory written evidence that:
1533 (i) the court order is no longer in effect;
1534 (ii) the child is or will be enrolled in comparable coverage which will take effect no
1535 later than the effective date of disenrollment; or
1536 (iii) the employer has eliminated family health coverage for all of its employees; and
1537 (d) withhold from the employee's compensation the employee's share, if any, of
1538 premiums for health coverage and to pay this amount to the insurer.
1539 (10) An order issued under Section 62A-11-326.1 may be considered a "qualified
1540 medical support order" for the purpose of enrolling a dependent child in a group accident and
1541 health insurance plan as defined in Section 609(a), Federal Employee Retirement Income
1542 Security Act of 1974.
1543 (11) This section does not affect any insurer's ability to require as a precondition of any
1544 child being covered under any policy of insurance that:
1545 (a) the parent continues to be eligible for coverage;
1546 (b) the child shall be identified to the insurer with adequate information to comply with
1547 this section; and
1548 (c) the premium shall be paid when due.
1549 (12) [
1550 benefit plans as defined in Section 26-19-2.
1551 [
1552
1553 (13) (a) A policy that provides coverage to a child of a group member may not deny
1554 eligibility for coverage to a child solely because:
1555 (i) the child does not reside with the insured; or
1556 (ii) the child is solely dependent on a former spouse of the insured rather than on the
1557 insured.
1558 (b) A child who does not reside with the insured may be excluded on the same basis as
1559 a child who resides with the insured.
1560 Section 24. Section 31A-22-614.5 is amended to read:
1561 31A-22-614.5. Uniform claims processing -- Electronic exchange of health
1562 information.
1563 (1) (a) Except as provided in Subsection (1)(c), [
1564 insurance shall use a uniform claim form and uniform billing and claim codes.
1565 (b) Beginning January 1, 2011, all health benefit plans, and dental and vision plans,
1566 shall provide for the electronic exchange of uniform:
1567 (i) eligibility and coverage information; and
1568 (ii) coordination of benefits information.
1569 (c) For purposes of Subsection (1)(a), "health insurance" does not include a policy or
1570 certificate that provides benefits solely for:
1571 (i) income replacement; or
1572 (ii) long-term care.
1573 (2) (a) The uniform electronic standards and information required in Subsection (1)
1574 shall be adopted and approved by the commissioner in accordance with Title 63G, Chapter 3,
1575 Utah Administrative Rulemaking Act.
1576 (b) When adopting rules under this section the commissioner:
1577 (i) shall:
1578 (A) consult with national and state organizations involved with the standardized
1579 exchange of health data, and the electronic exchange of health data, to develop the standards
1580 for the use and electronic exchange of uniform:
1581 (I) claim forms;
1582 (II) billing and claim codes;
1583 (III) insurance eligibility and coverage information; and
1584 (IV) coordination of benefits information; and
1585 (B) meet federal mandatory minimum standards following the adoption of national
1586 requirements for transaction and data elements in the federal Health Insurance Portability and
1587 Accountability Act;
1588 (ii) may not require an insurer or administrator to use a specific software product or
1589 vendor; and
1590 (iii) may require an insurer who participates in the all payer database created under
1591 Section 26-33a-106.1 to allow data regarding demographic and insurance coverage information
1592 to be electronically shared with the state's designated secure health information master person
1593 index to be used:
1594 (A) in compliance with data security standards established by:
1595 (I) the federal Health Insurance Portability and Accountability Act; and
1596 (II) the electronic commerce agreements established in a business associate agreement;
1597 and
1598 (B) for the purpose of coordination of health benefit plans.
1599 (3) (a) The commissioner shall coordinate the administrative rules adopted under the
1600 provisions of this section with the administrative rules adopted by the Department of Health for
1601 the implementation of the standards for the electronic exchange of clinical health information
1602 under Section 26-1-37. The department shall establish procedures for developing the rules
1603 adopted under this section, which ensure that the Department of Health is given the opportunity
1604 to comment on proposed rules.
1605 (b) (i) The commissioner may provide information to health care providers regarding
1606 resources available to a health care provider to verify whether a health care provider's practice
1607 management software system meets the uniform electronic standards for data exchange
1608 required by this section.
1609 (ii) The commissioner may provide the information described in Subsection (3)(b)(i)
1610 by partnering with:
1611 (A) a not-for-profit, broad based coalition of state health care insurers and health care
1612 providers who are involved in the electronic exchange of the data required by this section; or
1613 (B) some other person that the commissioner determines is appropriate to provide the
1614 information described in Subsection (3)(b)(i).
1615 (c) The commissioner shall regulate any fees charged by insurers to the providers for:
1616 (i) uniform claim forms;
1617 (ii) electronic billing; or
1618 (iii) the electronic exchange of clinical health information permitted by Section
1619 26-1-37.
1620 (4) This section does not require a person to provide information concerning an
1621 employer self-insured employee welfare benefit plan as defined in 29 U.S.C. Sec. 1002(1).
1622 Section 25. Section 31A-22-617 is amended to read:
1623 31A-22-617. Preferred provider contract provisions.
1624 Health insurance policies may provide for insureds to receive services or
1625 reimbursement under the policies in accordance with preferred health care provider contracts as
1626 follows:
1627 (1) Subject to restrictions under this section, an insurer or third party administrator may
1628 enter into contracts with health care providers as defined in Section 78B-3-403 under which the
1629 health care providers agree to supply services, at prices specified in the contracts, to persons
1630 insured by an insurer.
1631 (a) (i) A health care provider contract may require the health care provider to accept the
1632 specified payment in this Subsection (1) as payment in full, relinquishing the right to collect
1633 additional amounts from the insured person.
1634 (ii) In a dispute involving a provider's claim for reimbursement, the same shall be
1635 determined in accordance with applicable law, the provider contract, the subscriber contract,
1636 and the insurer's written payment policies in effect at the time services were rendered.
1637 (iii) If the parties are unable to resolve their dispute, the matter shall be subject to
1638 binding arbitration by a jointly selected arbitrator. Each party is to bear its own expense except
1639 the cost of the jointly selected arbitrator shall be equally shared. This Subsection (1)(a)(iii)
1640 does not apply to the claim of a general acute hospital to the extent it is inconsistent with the
1641 hospital's provider agreement.
1642 (iv) An organization may not penalize a provider solely for pursuing a claims dispute
1643 or otherwise demanding payment for a sum believed owing.
1644 (v) If an insurer permits another entity with which it does not share common ownership
1645 or control to use or otherwise lease one or more of the organization's networks of participating
1646 providers, the organization shall ensure, at a minimum, that the entity pays participating
1647 providers in accordance with the same fee schedule and general payment policies as the
1648 organization would for that network.
1649 (b) The insurance contract may reward the insured for selection of preferred health care
1650 providers by:
1651 (i) reducing premium rates;
1652 (ii) reducing deductibles;
1653 (iii) coinsurance;
1654 (iv) other copayments; or
1655 (v) any other reasonable manner.
1656 (c) If the insurer is a managed care organization, as defined in Subsection
1657 31A-27a-403(1)(f):
1658 (i) the insurance contract and the health care provider contract shall provide that in the
1659 event the managed care organization becomes insolvent, the rehabilitator or liquidator may:
1660 (A) require the health care provider to continue to provide health care services under
1661 the contract until the earlier of:
1662 (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
1663 liquidation; or
1664 (II) the date the term of the contract ends; and
1665 (B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
1666 receive from the managed care organization during the time period described in Subsection
1667 (1)(c)(i)(A);
1668 (ii) the provider is required to:
1669 (A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and
1670 (B) relinquish the right to collect additional amounts from the insolvent managed care
1671 organization's enrollee, as defined in Subsection 31A-27a-403(1)(b);
1672 (iii) if the contract between the health care provider and the managed care organization
1673 has not been reduced to writing, or the contract fails to contain the requirements described in
1674 Subsection (1)(c)(i), the provider may not collect or attempt to collect from the enrollee:
1675 (A) sums owed by the insolvent managed care organization; or
1676 (B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
1677 (iv) the following may not bill or maintain an action at law against an enrollee to
1678 collect sums owed by the insolvent managed care organization or the amount of the regular fee
1679 reduction authorized under Subsection (1)(c)(i)(B):
1680 (A) a provider;
1681 (B) an agent;
1682 (C) a trustee; or
1683 (D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
1684 (v) notwithstanding Subsection (1)(c)(i):
1685 (A) a rehabilitator or liquidator may not reduce a fee [
1686 provider's regular fee set forth in the contract; and
1687 (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
1688 for services received from the provider that the enrollee was required to pay before the filing
1689 of:
1690 (I) a petition for rehabilitation; or
1691 (II) a petition for liquidation.
1692 (2) (a) Subject to Subsections (2)(b) through (2)(e), an insurer using preferred health
1693 care provider contracts is subject to the reimbursement requirements in Section 31A-8-501 on
1694 or after January 1, 2014.
1695 (b) When reimbursing for services of health care providers not under contract, the
1696 insurer may make direct payment to the insured.
1697 (c) An insurer using preferred health care provider contracts may impose a deductible
1698 on coverage of health care providers not under contract.
1699 (d) When selecting health care providers with whom to contract under Subsection (1),
1700 an insurer may not unfairly discriminate between classes of health care providers, but may
1701 discriminate within a class of health care providers, subject to Subsection (7).
1702 (e) For purposes of this section, unfair discrimination between classes of health care
1703 providers includes:
1704 (i) refusal to contract with class members in reasonable proportion to the number of
1705 insureds covered by the insurer and the expected demand for services from class members; and
1706 (ii) refusal to cover procedures for one class of providers that are:
1707 (A) commonly used by members of the class of health care providers for the treatment
1708 of illnesses, injuries, or conditions;
1709 (B) otherwise covered by the insurer; and
1710 (C) within the scope of practice of the class of health care providers.
1711 (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
1712 to the insured that it has entered into preferred health care provider contracts. The insurer shall
1713 provide sufficient detail on the preferred health care provider contracts to permit the insured to
1714 agree to the terms of the insurance contract. The insurer shall provide at least the following
1715 information:
1716 (a) a list of the health care providers under contract, and if requested their business
1717 locations and specialties;
1718 (b) a description of the insured benefits, including deductibles, coinsurance, or other
1719 copayments;
1720 (c) a description of the quality assurance program required under Subsection (4); and
1721 (d) a description of the adverse benefit determination procedures required under
1722 Subsection (5).
1723 (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
1724 assurance program for assuring that the care provided by the health care providers under
1725 contract meets prevailing standards in the state.
1726 (b) The commissioner in consultation with the executive director of the Department of
1727 Health may designate qualified persons to perform an audit of the quality assurance program.
1728 The auditors shall have full access to all records of the organization and its health care
1729 providers, including medical records of individual patients.
1730 (c) The information contained in the medical records of individual patients shall
1731 remain confidential. All information, interviews, reports, statements, memoranda, or other data
1732 furnished for purposes of the audit and any findings or conclusions of the auditors are
1733 privileged. The information is not subject to discovery, use, or receipt in evidence in any legal
1734 proceeding except hearings before the commissioner concerning alleged violations of this
1735 section.
1736 (5) An insurer using preferred health care provider contracts shall provide a reasonable
1737 procedure for resolving complaints and adverse benefit determinations initiated by the insureds
1738 and health care providers.
1739 (6) An insurer may not contract with a health care provider for treatment of illness or
1740 injury unless the health care provider is licensed to perform that treatment.
1741 (7) (a) A health care provider or insurer may not discriminate against a preferred health
1742 care provider for agreeing to a contract under Subsection (1).
1743 (b) A health care provider licensed to treat an illness or injury within the scope of the
1744 health care provider's practice, who is willing and able to meet the terms and conditions
1745 established by the insurer for designation as a preferred health care provider, shall be able to
1746 apply for and receive the designation as a preferred health care provider. Contract terms and
1747 conditions may include reasonable limitations on the number of designated preferred health
1748 care providers based upon substantial objective and economic grounds, or expected use of
1749 particular services based upon prior provider-patient profiles.
1750 (8) Upon the written request of a provider excluded from a provider contract, the
1751 commissioner may hold a hearing to determine if the insurer's exclusion of the provider is
1752 based on the criteria set forth in Subsection (7)(b).
1753 (9) Nothing in this section is to be construed as to require an insurer to offer a certain
1754 benefit or service as part of a health benefit plan.
1755 (10) This section does not apply to catastrophic mental health coverage provided in
1756 accordance with Section 31A-22-625.
1757 (11) Notwithstanding Subsection (1), Subsection (7)(b), and Section 31A-22-618, an
1758 insurer or third party administrator is not required to, but may, enter into a contract with a
1759 licensed athletic trainer, licensed under Title 58, Chapter 40a, Athletic Trainer Licensing Act.
1760 Section 26. Section 31A-22-645 is enacted to read:
1761 31A-22-645. Alcohol and drug dependency treatment.
1762 (1) An insurer offering a health benefit plan providing coverage for alcohol or drug
1763 dependency treatment may require an inpatient facility to be licensed by:
1764 (a) (i) the Department of Human Services, under Title 62A, Chapter 2, Licensure of
1765 Programs and Facilities; or
1766 (ii) the Department of Health; or
1767 (b) for an inpatient facility located outside the state, a state agency similar to one
1768 described in Subsection (1)(a).
1769 (2) For inpatient coverage provided pursuant to Subsection (1), an insurer may require
1770 an inpatient facility to be accredited by the following:
1771 (a) the Joint Commission; and
1772 (b) one other nationally recognized accrediting agency.
1773 Section 27. Section 31A-22-701 is amended to read:
1774 31A-22-701. Groups eligible for group or blanket insurance.
1775 (1) As used in this section, "association group" means a lawfully formed association of
1776 individuals or business entities that:
1777 (a) purchases insurance on a group basis on behalf of members; and
1778 (b) is formed and maintained in good faith for purposes other than obtaining insurance.
1779 (2) A group accident and health insurance policy may be issued to:
1780 (a) a group:
1781 (i) to which a group life insurance policy may be issued under Sections 31A-22-502,
1782 31A-22-503, 31A-22-504, 31A-22-506, 31A-22-507, and 31A-22-509; and
1783 (ii) that is formed and maintained in good faith for a purpose other than obtaining
1784 insurance;
1785 (b) an association group that:
1786 (i) has been actively in existence for at least five years;
1787 (ii) has a constitution and bylaws;
1788 (iii) has a shared or common purpose that is not primarily a business or customer
1789 relationship;
1790 [
1791 insurance;
1792 [
1793 status-related factor relating to an individual, including an employee of an employer or a
1794 dependent of an employee;
1795 [
1796 group available to all members regardless of any health status-related factor relating to the
1797 members or individuals eligible for coverage through a member;
1798 [
1799 association group available other than in connection with a member of the association group;
1800 and
1801 [
1802 (c) a group specifically authorized by the commissioner under Section 31A-22-509,
1803 upon a finding that:
1804 (i) authorization is not contrary to the public interest;
1805 (ii) the group is actuarially sound;
1806 (iii) formation of the proposed group may result in economies of scale in acquisition,
1807 administrative, marketing, and brokerage costs;
1808 (iv) the insurance policy, insurance certificate, or other indicia of coverage that will be
1809 offered to the proposed group is substantially equivalent to insurance policies that are
1810 otherwise available to similar groups;
1811 (v) the group would not present hazards of adverse selection;
1812 (vi) the premiums for the insurance policy and any contributions by or on behalf of the
1813 insured persons are reasonable in relation to the benefits provided; and
1814 (vii) the group is formed and maintained in good faith for a purpose other than
1815 obtaining insurance.
1816 (3) A blanket accident and health insurance policy:
1817 (a) covers a defined class of persons;
1818 (b) may not be offered or underwritten on an individual basis;
1819 (c) shall cover only a group that is:
1820 (i) actuarially sound; and
1821 (ii) formed and maintained in good faith for a purpose other than obtaining insurance;
1822 and
1823 (d) may be issued only to:
1824 (i) a common carrier or an operator, owner, or lessee of a means of transportation, as
1825 policyholder, covering persons who may become passengers as defined by reference to the
1826 person's travel status;
1827 (ii) an employer, as policyholder, covering any group of employees, dependents, or
1828 guests, as defined by reference to specified hazards incident to any activities of the
1829 policyholder;
1830 (iii) an institution of learning, including a school district, a school jurisdictional unit, or
1831 the head, principal, or governing board of a school jurisdictional unit, as policyholder, covering
1832 students, teachers, or employees;
1833 (iv) a religious, charitable, recreational, educational, or civic organization, or branch of
1834 one of those organizations, as policyholder, covering a group of members or participants as
1835 defined by reference to specified hazards incident to the activities sponsored or supervised by
1836 the policyholder;
1837 (v) a sports team, camp, or sponsor of a sports team or camp, as policyholder, covering
1838 members, campers, employees, officials, or supervisors;
1839 (vi) a volunteer fire department, first aid, civil defense, or other similar volunteer
1840 organization, as policyholder, covering a group of members or participants as defined by
1841 reference to specified hazards incident to activities sponsored, supervised, or participated in by
1842 the policyholder;
1843 (vii) a newspaper or other publisher, as policyholder, covering its carriers;
1844 (viii) an association, including a labor union, that has a constitution and bylaws and
1845 that is organized in good faith for purposes other than that of obtaining insurance, as
1846 policyholder, covering a group of members or participants as defined by reference to specified
1847 hazards incident to the activities or operations sponsored or supervised by the policyholder; and
1848 (ix) any other class of risks that, in the judgment of the commissioner, may be properly
1849 eligible for blanket accident and health insurance.
1850 (4) The judgment of the commissioner may be exercised on the basis of:
1851 (a) individual risks;
1852 (b) a class of risks; or
1853 (c) both Subsections (4)(a) and (b).
1854 Section 28. Section 31A-22-716 is amended to read:
1855 31A-22-716. Required provision for notice of termination.
1856 (1) [
1857 renewed after July 1, 1990, shall include a provision that obligates the policyholder to give 30
1858 days prior written notice of termination to each employee or group member and to notify each
1859 employee or group member of the employee's or group member's rights to continue coverage
1860 upon termination.
1861 (2) An insurer's monthly notice to the policyholder of premium payments due shall
1862 include a statement of the policyholder's obligations as set forth in Subsection (1). Insurers
1863 shall provide a sample notice to the policyholder at least once a year.
1864 [
1865
1866
1867
1868 Section 29. Section 31A-22-721 is amended to read:
1869 31A-22-721. A health benefit plan for a plan sponsor -- Discontinuance and
1870 nonrenewal.
1871 (1) Except as otherwise provided in this section, a health benefit plan for a plan
1872 sponsor is renewable and continues in force:
1873 (a) with respect to all eligible employees and dependents; and
1874 (b) at the option of the plan sponsor.
1875 (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed for a
1876 network plan, if:
1877 (a) there is no longer any enrollee under the group health plan who lives, resides, or
1878 works in:
1879 (i) the service area of the insurer; or
1880 (ii) the area for which the insurer is authorized to do business; or
1881 (b) for coverage made available in the small or large employer market only through an
1882 association, if:
1883 (i) the employer's membership in the association ceases; and
1884 (ii) the coverage is terminated uniformly without regard to any health status-related
1885 factor relating to any covered individual.
1886 (3) A health benefit plan for a plan sponsor may be discontinued if:
1887 (a) a condition described in Subsection (2) exists;
1888 (b) the plan sponsor fails to pay premiums or contributions in accordance with the
1889 terms of the contract;
1890 (c) the plan sponsor:
1891 (i) performs an act or practice that constitutes fraud; or
1892 (ii) makes an intentional misrepresentation of material fact under the terms of the
1893 coverage;
1894 (d) the insurer:
1895 (i) elects to discontinue offering a particular health benefit [
1896 issued for delivery in this state;
1897 (ii) (A) provides notice of the discontinuation in writing:
1898 (I) to each plan sponsor, employee, and dependent of a plan sponsor or employee; and
1899 (II) at least 90 days before the date the coverage will be discontinued;
1900 (B) provides notice of the discontinuation in writing:
1901 (I) to the commissioner; and
1902 (II) at least three working days prior to the date the notice is sent to the affected plan
1903 sponsors, employees, and dependents of plan sponsors or employees;
1904 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase any
1905 other health benefit [
1906 (I) by the insurer in the market; or
1907 (II) in the case of a large employer, any other health benefit plan currently being
1908 offered in that market; and
1909 (D) in exercising the option to discontinue that [
1910 offering the option of coverage in this section, the insurer acts uniformly without regard to:
1911 (I) the claims experience of a plan sponsor;
1912 (II) any health status-related factor relating to any covered participant or beneficiary; or
1913 (III) any health status-related factor relating to a new participant or beneficiary who
1914 may become eligible for coverage; or
1915 (e) the insurer:
1916 (i) elects to discontinue all of the insurer's health benefit plans:
1917 (A) in the small employer market; or
1918 (B) the large employer market; or
1919 (C) both the small and large employer markets; and
1920 (ii) (A) provides notice of the discontinuance in writing:
1921 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
1922 (II) at least 180 days before the date the coverage will be discontinued;
1923 (B) provides notice of the discontinuation in writing:
1924 (I) to the commissioner in each state in which an affected insured individual is known
1925 to reside; and
1926 (II) at least 30 business days prior to the date the notice is sent to the affected plan
1927 sponsors, employees, and dependents of a plan sponsor or employee;
1928 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
1929 market; and
1930 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115.
1931 (4) A large employer health benefit plan may be discontinued or nonrenewed:
1932 (a) if a condition described in Subsection (2) exists; or
1933 (b) for noncompliance with the insurer's:
1934 (i) minimum participation requirements; or
1935 (ii) employer contribution requirements.
1936 (5) A small employer health benefit plan may be discontinued or nonrenewed:
1937 (a) if a condition described in Subsection (2) exists; or
1938 (b) for noncompliance with the insurer's employer contribution requirements.
1939 (6) A small employer health benefit plan may be nonrenewed:
1940 (a) if a condition described in Subsection (2) exists; or
1941 (b) for noncompliance with the insurer's minimum participation requirements.
1942 (7) (a) Except as provided in Subsection (7)(d), an eligible employee may be
1943 discontinued if after issuance of coverage the eligible employee:
1944 (i) engages in an act or practice that constitutes fraud in connection with the coverage;
1945 or
1946 (ii) makes an intentional misrepresentation of material fact in connection with the
1947 coverage.
1948 (b) An eligible employee that is discontinued under Subsection (7)(a) may reenroll:
1949 (i) 12 months after the date of discontinuance; and
1950 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
1951 to reenroll.
1952 (c) At the time the eligible employee's coverage is discontinued under Subsection
1953 (7)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
1954 discontinued.
1955 (d) An eligible employee may not be discontinued under this Subsection (7) because of
1956 a fraud or misrepresentation that relates to health status.
1957 (8) (a) Except as provided in Subsection (8)(b), an insurer that elects to discontinue
1958 offering a health benefit plan under Subsection (3)(e) shall be prohibited from writing new
1959 business in such market in this state for a period of five years beginning on the date of
1960 discontinuation of the last coverage that is discontinued.
1961 (b) The commissioner may waive the prohibition under Subsection (8)(a) when the
1962 commissioner finds that waiver is in the public interest:
1963 (i) to promote competition; or
1964 (ii) to resolve inequity in the marketplace.
1965 (9) If an insurer is doing business in one established geographic service area of the
1966 state, this section applies only to the insurer's operations in that geographic service area.
1967 (10) An insurer may modify a health benefit plan for a plan sponsor only:
1968 (a) at the time of coverage renewal; and
1969 (b) if the modification is effective uniformly among all plans with a particular product
1970 or service.
1971 (11) For purposes of this section, a reference to "plan sponsor" includes a reference to
1972 the employer:
1973 (a) with respect to coverage provided to an employer member of the association; and
1974 (b) if the health benefit plan is made available by an insurer in the employer market
1975 only through:
1976 (i) an association;
1977 (ii) a trust; or
1978 (iii) a discretionary group.
1979 (12) (a) A small employer that, after purchasing a health benefit plan in the small group
1980 market, employs on average more than 50 eligible employees on each business day in a
1981 calendar year may continue to renew the health benefit plan purchased in the small group
1982 market.
1983 (b) A large employer that, after purchasing a health benefit plan in the large group
1984 market, employs on average less than 51 eligible employees on each business day in a calendar
1985 year may continue to renew the health benefit plan purchased in the large group market.
1986 (13) An insurer offering employer sponsored health benefit plans shall comply with the
1987 Health Insurance Portability and Accountability Act, 42 U.S.C. Sec. 300gg and 300gg-1.
1988 Section 30. Section 31A-22-801 is amended to read:
1989 31A-22-801. Scope of part.
1990 (1) Except as provided under Subsection (2), all life insurance and accident and health
1991 insurance in connection with loans or other credit transactions are subject to this part.
1992 (2) (a) Insurance written in connection with a [
1993
1994 title[
1995 (i) secured by a first mortgage or deed of trust; and
1996 (ii) made to finance the purchase of real property or the construction of a dwelling
1997 thereon, or to refinance a prior credit transaction made for such a purpose.
1998 (b) Isolated transactions on the part of an insurer that are not related to an agreement or
1999 plan for insuring debtors of the creditor are not subject to this part.
2000 Section 31. Section 31A-22-1902 is amended to read:
2001 31A-22-1902. Definitions.
2002 As used in this part:
2003 (1) "Administrator" means the same as that term is defined in Section 67-4a-102.
2004 (2) "Asymmetric conduct" means an insurer's use of the death master file or other
2005 similar database before July 1, 2015, in connection with searching for information regarding
2006 whether annuitants under the insurer's annuities might be deceased, but not in connection with
2007 whether the insureds under the insurer's policies might be deceased.
2008 (3) (a) "Contract" means an annuity contract.
2009 (b) "Contract" does not include an annuity used to fund an employment-based
2010 retirement plan or program when:
2011 (i) the insurer does not perform the record keeping services; or
2012 (ii) the insurer is not committed by terms of the annuity contract to pay death benefits
2013 to the beneficiaries of specific plan participants.
2014 (4) "Death master file" means the United States Social Security Administration's Death
2015 Master File or another database or service that is at least as comprehensive as the United States
2016 Social Security Administration's Death Master File for determining that a person has reportedly
2017 died.
2018 (5) "Death master file match" means a search of a death master file that results in a
2019 match of the Social Security number, or the name and date of birth of an insured, annuity
2020 owner, or retained asset account holder.
2021 [
2022 [
2023 [
2024
2025 [
2026 benefit.
2027 (b) "Policy" does not include:
2028 (i) a policy or certificate of life insurance that provides a death benefit under an
2029 employee benefit plan:
2030 (A) subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec.
2031 1002, as periodically amended; or
2032 (B) under [
2033 (ii) a policy or certificate of life insurance that is used to fund a preneed funeral
2034 contract or prearrangement;
2035 (iii) a policy or certificate of credit life or accidental death insurance; or
2036 (iv) a policy issued to a group master policyholder for which the insurer does not
2037 provide record keeping services.
2038 [
2039 agrees with a group policy or contract customer to be responsible for obtaining, maintaining,
2040 and administering, in its own or its agents' systems, information about each individual insured
2041 under an insured's group insurance contract, or a line of coverage under the group insurance
2042 contract, at least the following information:
2043 (a) social security number, or name and date of birth;
2044 (b) beneficiary designation information;
2045 (c) coverage eligibility;
2046 (d) benefit amount; and
2047 (e) premium payment status.
2048 [
2049 proceeds payable under a policy or contract is accomplished by the insurer or an entity acting
2050 on behalf of the insurer by depositing the proceeds into an account with check or draft writing
2051 privileges, where those proceeds are retained by the insurer or its agent, pursuant to a
2052 supplementary contract not involving annuity benefits other than death benefits.
2053 Section 32. Section 31A-23a-111 is amended to read:
2054 31A-23a-111. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
2055 terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
2056 (1) A license type issued under this chapter remains in force until:
2057 (a) revoked or suspended under Subsection (5);
2058 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2059 administrative action;
2060 (c) the licensee dies or is adjudicated incompetent as defined under:
2061 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2062 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2063 Minors;
2064 (d) lapsed under Section 31A-23a-113; or
2065 (e) voluntarily surrendered.
2066 (2) The following may be reinstated within one year after the day on which the license
2067 is no longer in force:
2068 (a) a lapsed license; or
2069 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
2070 not be reinstated after the license period in which the license is voluntarily surrendered.
2071 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
2072 license, submission and acceptance of a voluntary surrender of a license does not prevent the
2073 department from pursuing additional disciplinary or other action authorized under:
2074 (a) this title; or
2075 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
2076 Administrative Rulemaking Act.
2077 (4) A line of authority issued under this chapter remains in force until:
2078 (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
2079 or
2080 (b) the supporting license type:
2081 (i) is revoked or suspended under Subsection (5);
2082 (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
2083 administrative action;
2084 (iii) lapses under Section 31A-23a-113; or
2085 (iv) is voluntarily surrendered; or
2086 (c) the licensee dies or is adjudicated incompetent as defined under:
2087 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2088 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2089 Minors.
2090 (5) (a) If the commissioner makes a finding under Subsection (5)(b), as part of an
2091 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
2092 commissioner may:
2093 (i) revoke:
2094 (A) a license; or
2095 (B) a line of authority;
2096 (ii) suspend for a specified period of 12 months or less:
2097 (A) a license; or
2098 (B) a line of authority;
2099 (iii) limit in whole or in part:
2100 (A) a license; or
2101 (B) a line of authority; [
2102 (iv) deny a license application[
2103 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
2104 (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
2105 Subsection (5)(a)(v).
2106 (b) The commissioner may take an action described in Subsection (5)(a) if the
2107 commissioner finds that the licensee:
2108 (i) is unqualified for a license or line of authority under Section 31A-23a-104,
2109 31A-23a-105, or 31A-23a-107;
2110 (ii) violates:
2111 (A) an insurance statute;
2112 (B) a rule that is valid under Subsection 31A-2-201(3); or
2113 (C) an order that is valid under Subsection 31A-2-201(4);
2114 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
2115 delinquency proceedings in any state;
2116 (iv) fails to pay a final judgment rendered against the person in this state within 60
2117 days after the day on which the judgment became final;
2118 (v) fails to meet the same good faith obligations in claims settlement that is required of
2119 admitted insurers;
2120 (vi) is affiliated with and under the same general management or interlocking
2121 directorate or ownership as another insurance producer that transacts business in this state
2122 without a license;
2123 (vii) refuses:
2124 (A) to be examined; or
2125 (B) to produce its accounts, records, and files for examination;
2126 (viii) has an officer who refuses to:
2127 (A) give information with respect to the insurance producer's affairs; or
2128 (B) perform any other legal obligation as to an examination;
2129 (ix) provides information in the license application that is:
2130 (A) incorrect;
2131 (B) misleading;
2132 (C) incomplete; or
2133 (D) materially untrue;
2134 (x) violates an insurance law, valid rule, or valid order of another regulatory agency in
2135 any jurisdiction;
2136 (xi) obtains or attempts to obtain a license through misrepresentation or fraud;
2137 (xii) improperly withholds, misappropriates, or converts money or properties received
2138 in the course of doing insurance business;
2139 (xiii) intentionally misrepresents the terms of an actual or proposed:
2140 (A) insurance contract;
2141 (B) application for insurance; or
2142 (C) life settlement;
2143 (xiv) is convicted of a felony;
2144 (xv) admits or is found to have committed an insurance unfair trade practice or fraud;
2145 (xvi) in the conduct of business in this state or elsewhere:
2146 (A) uses fraudulent, coercive, or dishonest practices; or
2147 (B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
2148 (xvii) has an insurance license, or its equivalent, denied, suspended, or revoked in
2149 another state, province, district, or territory;
2150 (xviii) forges another's name to:
2151 (A) an application for insurance; or
2152 (B) a document related to an insurance transaction;
2153 (xix) improperly uses notes or another reference material to complete an examination
2154 for an insurance license;
2155 (xx) knowingly accepts insurance business from an individual who is not licensed;
2156 (xxi) fails to comply with an administrative or court order imposing a child support
2157 obligation;
2158 (xxii) fails to:
2159 (A) pay state income tax; or
2160 (B) comply with an administrative or court order directing payment of state income
2161 tax;
2162 (xxiii) violates or permits others to violate the federal Violent Crime Control and Law
2163 Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and therefore under 18 U.S.C. Sec. 1033 is
2164 prohibited from engaging in the business of insurance; or
2165 (xxiv) engages in a method or practice in the conduct of business that endangers the
2166 legitimate interests of customers and the public.
2167 (c) For purposes of this section, if a license is held by an agency, both the agency itself
2168 and any individual designated under the license are considered to be the holders of the license.
2169 (d) If an individual designated under the agency license commits an act or fails to
2170 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
2171 the commissioner may suspend, revoke, or limit the license of:
2172 (i) the individual;
2173 (ii) the agency, if the agency:
2174 (A) is reckless or negligent in its supervision of the individual; or
2175 (B) knowingly participates in the act or failure to act that is the ground for suspending,
2176 revoking, or limiting the license; or
2177 (iii) (A) the individual; and
2178 (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
2179 (6) A licensee under this chapter is subject to the penalties for acting as a licensee
2180 without a license if:
2181 (a) the licensee's license is:
2182 (i) revoked;
2183 (ii) suspended;
2184 (iii) limited;
2185 (iv) surrendered in lieu of administrative action;
2186 (v) lapsed; or
2187 (vi) voluntarily surrendered; and
2188 (b) the licensee:
2189 (i) continues to act as a licensee; or
2190 (ii) violates the terms of the license limitation.
2191 (7) A licensee under this chapter shall immediately report to the commissioner:
2192 (a) a revocation, suspension, or limitation of the person's license in another state, the
2193 District of Columbia, or a territory of the United States;
2194 (b) the imposition of a disciplinary sanction imposed on that person by another state,
2195 the District of Columbia, or a territory of the United States; or
2196 (c) a judgment or injunction entered against that person on the basis of conduct
2197 involving:
2198 (i) fraud;
2199 (ii) deceit;
2200 (iii) misrepresentation; or
2201 (iv) a violation of an insurance law or rule.
2202 (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
2203 license in lieu of administrative action may specify a time, not to exceed five years, within
2204 which the former licensee may not apply for a new license.
2205 (b) If no time is specified in an order or agreement described in Subsection (8)(a), the
2206 former licensee may not apply for a new license for five years from the day on which the order
2207 or agreement is made without the express approval by the commissioner.
2208 (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2209 a license issued under this part if so ordered by a court.
2210 (10) The commissioner shall by rule prescribe the license renewal and reinstatement
2211 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2212 Section 33. Section 31A-23a-115 is amended to read:
2213 31A-23a-115. Appointment of individual and agency insurance producer, limited
2214 line producer, or managing general agent -- Reports and lists.
2215 (1) (a) An insurer shall appoint an individual or agency with whom it has a contract as
2216 an insurance producer, limited line producer, or managing general agent to act on the insurer's
2217 behalf in order for the licensee to do business for the insurer in this state.
2218 (b) An insurer shall report to the commissioner, at intervals and in the form the
2219 commissioner establishes by rule made in accordance with Title 63G, Chapter 3, Utah
2220 Administrative Rulemaking Act:
2221 (i) a new appointment; and
2222 (ii) a termination of appointment.
2223 (2) An insurer shall notify a producer that the producer's appointment is terminated by
2224 the insurer and of the reason for termination at an interval and in the form the commissioner
2225 establishes by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
2226 Rulemaking Act.
2227 [
2228 an appointment if:
2229 (A) the reason for termination is a reason described in Subsection 31A-23a-111(5)(b);
2230 or
2231 (B) the insurer has knowledge that the individual or agency licensee is found to have
2232 engaged in an activity described in Subsection 31A-23a-111(5)(b) by:
2233 (I) a court;
2234 (II) a government body; or
2235 (III) a self-regulatory organization, which the commissioner may define by rule made
2236 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2237 (ii) The information provided to the commissioner under this Subsection [
2238 private record under Title 63G, Chapter 2, Government Records Access and Management Act.
2239 (b) An insurer is immune from civil action, civil penalty, or damages if the insurer
2240 complies in good faith with this Subsection [
2241 of termination of an appointment.
2242 (c) Notwithstanding any other provision in this section, an insurer is not immune from
2243 any action or resulting penalty imposed on the reporting insurer as a result of proceedings
2244 brought by or on behalf of the department if the action is based on evidence other than the
2245 report submitted in compliance with this Subsection [
2246 [
2247 appointment reporting fees for an individual designated on the agency's license under Section
2248 31A-23a-302.
2249 [
2249a submitted under
2250 Subsection [
2251 contracted or appointed licensee or any of the licensee's licensed employees act on behalf of the
2252 insurer.
2253 Section 34. Section 31A-23a-203 is amended to read:
2254 31A-23a-203. Training period requirements.
2255 (1) A producer is eligible to become a surplus lines producer only if the producer:
2256 (a) has passed the applicable surplus lines producer examination;
2257 (b) has been a producer with property or casualty or both lines of authority for at least
2258 three years during the four years immediately preceding the date of application; and
2259 (c) has paid the applicable fee under Section 31A-3-103.
2260 (2) A person is eligible to become a consultant only if the person has acted in a
2261 capacity that would provide the person with preparation to act as an insurance consultant for a
2262 period aggregating not less than three years during the four years immediately preceding the
2263 date of application.
2264 (3) (a) A resident producer with an accident and health line of authority may only sell
2265 long-term care insurance if the producer:
2266 (i) initially completes a minimum of three hours of long-term care training before
2267 selling long-term care coverage; and
2268 (ii) after completing the training required by Subsection (3)(a)(i), completes a
2269 minimum of three hours of long-term care training during each subsequent two-year licensing
2270 period.
2271 (b) A course taken to satisfy a long-term care training requirement may be used toward
2272 satisfying a producer continuing education requirement.
2273 (c) Long-term care training is not a continuing education requirement to renew a
2274 producer license.
2275 (d) An insurer that issues long-term care insurance shall demonstrate to the
2276 commissioner, upon request, that a producer who is appointed by the insurer and who sells
2277 long-term care insurance coverage is in compliance with this Subsection (3).
2278 (4) (a) A resident producer with a property line of authority may only sell flood
2279 insurance coverage under the National Flood Insurance Program if the producer completes a
2280 minimum of three hours of flood insurance training related to the National Flood Insurance
2281 Program before selling flood insurance coverage.
2282 (b) A course taken to satisfy a flood insurance training requirement may be used
2283 toward satisfying a producer continuing education requirement.
2284 (c) Flood insurance training is not a continuing education requirement to renew a
2285 producer license.
2286 (d) An insurer that issues flood insurance shall demonstrate to the commissioner, upon
2287 request, that a producer who is appointed by the insurer and who sells flood insurance coverage
2288 is in compliance with this Subsection (4).
2289 [
2290 applying for a license under this chapter.
2291 Section 35. Section 31A-23a-302 is amended to read:
2292 31A-23a-302. Agency designations.
2293 (1) An agency shall designate an individual that has an individual producer, surplus
2294 lines producer, limited line producer, consultant, managing general agent, or reinsurance
2295 intermediary license to act on the agency's behalf in order for the licensee to do business for the
2296 agency in this state.
2297 (2) An agency shall report to the commissioner, at intervals and in the form the
2298 commissioner establishes by rule made in accordance with Title 63G, Chapter 3, Utah
2299 Administrative Rulemaking Act:
2300 (a) a new designation; and
2301 (b) a terminated designation.
2302 (3) An agency shall notify an individual designee that the individual's designation is
2303 terminated by the agency and of the reason for termination at an interval and in the form the
2304 commissioner establishes by rule made in accordance with Title 63G, Chapter 3, Utah
2305 Administrative Rulemaking Act.
2306 [
2307 cause of termination of a designation if:
2308 (i) the reason for termination is a reason described in Subsection 31A-23a-111(5)(b);
2309 or
2310 (ii) the agency has knowledge that the individual licensee is found to have engaged in
2311 an activity described in Subsection 31A-23a-111(5)(b) by:
2312 (A) a court;
2313 (B) a government body; or
2314 (C) a self-regulatory organization, which the commissioner may define by rule made in
2315 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2316 (b) The information provided the commissioner under Subsection [
2317 private record under Title 63G, Chapter 2, Government Records Access and Management Act.
2318 (c) An agency is immune from civil action, civil penalty, or damages if the agency
2319 complies in good faith with this Subsection [
2320 of termination of a designation.
2321 (d) Notwithstanding any other provision in this section, an agency is not immune from
2322 an action or resulting penalty imposed on the reporting agency as a result of proceedings
2323 brought by or on behalf of the department if the action is based on evidence other than the
2324 report submitted in compliance with this Subsection [
2325 [
2326 licensed only through an individual who is licensed under this chapter to act in the same
2327 capacity.
2328 [
2329 commissioner in accordance with any rule made by the commissioner in accordance with Title
2330 63G, Chapter 3, Utah Administrative Rulemaking Act, the name of the designated responsible
2331 licensed individual who has authority to act on behalf of the agency in the matters pertaining to
2332 compliance with this title and orders of the commissioner.
2333 [
2333a reports submitted under
2334 Subsection (2) or [
2335 licensee acts on behalf of the agency.
2336 [
2337 individual contracted or designated under the agency license shall be considered to be the
2338 holder of the agency license for purposes of this section.
2339 (b) If an individual contracted or designated under the agency license commits an act or
2340 fails to perform a duty that is a ground for suspending, revoking, or limiting the agency license,
2341 or assessing a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i), the commissioner
2342 may assess a forfeiture, suspend, revoke, or limit the license of, or take a combination of these
2343 actions against:
2344 (i) the individual;
2345 (ii) the agency, if the agency:
2346 (A) is reckless or negligent in its supervision of the individual; or
2347 (B) knowingly participates in the act or failure to act that is the ground for assessing a
2348 forfeiture, or suspending, revoking, or limiting the license; or
2349 (iii) (A) the individual; and
2350 (B) the agency if the agency meets the requirements of Subsection [
2351 Section 36. Section 31A-23a-407 is amended to read:
2352 31A-23a-407. Liability for acts of title insurance producers.
2353 (1) Subject to the other provisions in this section, a title insurer that Ŝ→ [
2353a contract ←Ŝ with or
2354 appoints an individual title insurance producer or an agency title insurance producer is liable to
2355 a buyer, seller, borrower, lender, or third party that deposits money with the individual title
2356 insurance producer or agency title insurance producer for the receipt and disbursement of
2357 money deposited with the individual title insurance producer or agency title insurance producer
2358 for a transaction when a commitment for a policy of title insurance of that title insurer is
2359 ordered, issued, or distributed or a title insurance policy of that title insurer is issued, except
2360 that once a title insurer is named in an issued commitment only that title insurer is liable as a
2361 title insurer under this section.
2362 (2) The liability of a title insurer under Subsection (1) and the liability of an individual
2363 title insurance producer or agency title insurance producer for the receipt and disbursement of
2364 money deposited with the individual title insurance producer or agency title insurance producer
2365 is limited to the amount of money received and disbursed, not to exceed the amount of
2366 proposed insurance set forth in the commitment or title insurance policy described in
2367 Subsection (1) plus 10% of the amount of the proposed insurance.
2368 (3) The liability described in Subsection (1) does not modify, mitigate, impair, or affect
2369 the contractual obligations between an individual title insurance producer or agency title
2370 insurance producer and the title insurer.
2371 (4) The liability of a title insurer with respect to the condition of title to the real
2372 property that is the subject of a title insurance policy or a title insurance commitment for a title
2373 insurance policy is limited to the terms, conditions, and stipulations contained in the title
2374 insurance policy or title commitment.
2375 Section 37. Section 31A-23a-412 is amended to read:
2376 31A-23a-412. Place of business and residence address -- Records.
2377 (1) (a) A licensee under this chapter shall register and maintain with the commissioner:
2378 (i) the address and the one or more telephone numbers of the licensee's principal place
2379 of business; and
2380 (ii) a valid business email address at which the commissioner may contact the licensee.
2381 (b) If a licensee is an individual, in addition to complying with Subsection (1)(a) the
2382 individual shall register and maintain with the commissioner the individual's residence address
2383 and telephone number.
2384 (c) A licensee shall notify the commissioner within 30 days of a change of any of the
2385 following required to be registered with the commissioner under this section:
2386 (i) an address;
2387 (ii) a telephone number; or
2388 (iii) a business email address.
2389 (2) (a) Except as provided under Subsection (3), a licensee under this chapter or an
2390 insurer under Chapter 14, Foreign Insurers, shall keep at the principal place of business address
2391 registered under Subsection (1), separate and distinct books and records of the transactions
2392 consummated under the Utah license.
2393 (b) The books and records described in Subsection (2)(a) shall:
2394 (i) be in an organized form;
2395 (ii) be available to the commissioner for inspection upon reasonable notice; and
2396 (iii) include all of the following:
2397 (A) if the licensee is a producer, surplus lines producer, limited line producer,
2398 consultant, managing general agent, or reinsurance intermediary:
2399 (I) a record of each insurance contract procured by or issued through the licensee, with
2400 the names of insurers and insureds, the amount of premium and commissions or other
2401 compensation, and the subject of the insurance;
2402 (II) the names of any other producers, surplus lines producers, limited line producers,
2403 consultants, managing general agents, or reinsurance intermediaries from whom business is
2404 accepted, and of persons to whom commissions or allowances of any kind are promised or
2405 paid; and
2406 (III) a record of the consumer complaints forwarded to the licensee by an insurance
2407 regulator;
2408 (B) if the licensee is a consultant, a record of each agreement outlining the work
2409 performed and the fee for the work; and
2410 (C) any additional information which:
2411 (I) is customary for a similar business; or
2412 (II) may reasonably be required by the commissioner by rule made in accordance with
2413 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2414 (3) Subsection (2) is satisfied if the books and records specified in Subsection (2) can
2415 be obtained immediately from a central storage place or elsewhere by on-line computer
2416 terminals located at the registered address.
2417 (4) A licensee who represents only a single insurer satisfies Subsection (2) if the
2418 insurer maintains the books and records pursuant to Subsection (2) at a place satisfying
2419 Subsections (1) and (5).
2420 (5) (a) The books and records maintained under Subsection (2) or Section
2421 31A-23a-413 shall be available for the inspection of the commissioner during the business
2422 hours for a period of time after the date of the transaction as specified by the commissioner by
2423 rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, but
2424 in no case for less than three calendar years in addition to the current calendar year [
2425
2426 (b) Discarding [
2427 retention period has expired does not place the licensee in violation of a later-adopted longer
2428 record retention period.
2429 Section 38. Section 31A-23a-501 is amended to read:
2430 31A-23a-501. Licensee compensation.
2431 (1) As used in this section:
2432 (a) "Commission compensation" includes funds paid to or credited for the benefit of a
2433 licensee from:
2434 (i) commission amounts deducted from insurance premiums on insurance sold by or
2435 placed through the licensee;
2436 (ii) commission amounts received from an insurer or another licensee as a result of the
2437 sale or placement of insurance; or
2438 (iii) overrides, bonuses, contingent bonuses, or contingent commissions received from
2439 an insurer or another licensee as a result of the sale or placement of insurance.
2440 (b) (i) "Compensation from an insurer or third party administrator" means
2441 commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
2442 gifts, prizes, or any other form of valuable consideration:
2443 (A) whether or not payable pursuant to a written agreement; and
2444 (B) received from:
2445 (I) an insurer; or
2446 (II) a third party to the transaction for the sale or placement of insurance.
2447 (ii) "Compensation from an insurer or third party administrator" does not mean
2448 compensation from a customer that is:
2449 (A) a fee or pass-through costs as provided in Subsection (1)(e); or
2450 (B) a fee or amount collected by or paid to the producer that does not exceed an
2451 amount established by the commissioner by administrative rule.
2452 (c) (i) "Customer" means:
2453 (A) the person signing the application or submission for insurance; or
2454 (B) the authorized representative of the insured actually negotiating the placement of
2455 insurance with the producer.
2456 (ii) "Customer" does not mean a person who is a participant or beneficiary of:
2457 (A) an employee benefit plan; or
2458 (B) a group or blanket insurance policy or group annuity contract sold, solicited, or
2459 negotiated by the producer or affiliate.
2460 (d) (i) "Noncommission compensation" includes all funds paid to or credited for the
2461 benefit of a licensee other than commission compensation.
2462 (ii) "Noncommission compensation" does not include charges for pass-through costs
2463 incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
2464 (e) "Pass-through costs" include:
2465 (i) costs for copying documents to be submitted to the insurer; and
2466 (ii) bank costs for processing cash or credit card payments.
2467 (2) A licensee may receive from an insured or from a person purchasing an insurance
2468 policy, noncommission compensation if the noncommission compensation is stated on a
2469 separate, written disclosure.
2470 (a) The disclosure required by this Subsection (2) shall:
2471 (i) include the signature of the insured or prospective insured acknowledging the
2472 noncommission compensation;
2473 (ii) clearly specify:
2474 (A) the amount of any known noncommission compensation; and
2475 (B) the type and amount, if known, of any potential and contingent noncommission
2476 compensation; and
2477 (iii) be provided to the insured or prospective insured before the performance of the
2478 service.
2479 (b) Noncommission compensation shall be:
2480 (i) limited to actual or reasonable expenses incurred for services; and
2481 (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
2482 business or for a specific service or services.
2483 (c) A copy of the signed disclosure required by this Subsection (2) shall be maintained
2484 by any licensee who collects or receives the noncommission compensation or any portion of
2485 the noncommission compensation.
2486 (d) All accounting records relating to noncommission compensation shall be
2487 maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
2488 (3) (a) A licensee may receive noncommission compensation when acting as a
2489 producer for the insured in connection with the actual sale or placement of insurance if:
2490 (i) the producer and the insured have agreed on the producer's noncommission
2491 compensation; and
2492 (ii) the producer has disclosed to the insured the existence and source of any other
2493 compensation that accrues to the producer as a result of the transaction.
2494 (b) The disclosure required by this Subsection (3) shall:
2495 (i) include the signature of the insured or prospective insured acknowledging the
2496 noncommission compensation;
2497 (ii) clearly specify:
2498 (A) the amount of any known noncommission compensation;
2499 (B) the type and amount, if known, of any potential and contingent noncommission
2500 compensation; and
2501 (C) the existence and source of any other compensation; and
2502 (iii) be provided to the insured or prospective insured before the performance of the
2503 service.
2504 (c) The following additional noncommission compensation is authorized:
2505 (i) compensation received by a producer of a compensated corporate surety who under
2506 procedures approved by a rule or order of the commissioner is paid by surety bond principal
2507 debtors for extra services;
2508 (ii) compensation received by an insurance producer who is also licensed as a public
2509 adjuster under Section 31A-26-203, for services performed for an insured in connection with a
2510 claim adjustment, so long as the producer does not receive or is not promised compensation for
2511 aiding in the claim adjustment prior to the occurrence of the claim;
2512 (iii) compensation received by a consultant as a consulting fee, provided the consultant
2513 complies with the requirements of Section 31A-23a-401; or
2514 (iv) other compensation arrangements approved by the commissioner after a finding
2515 that they do not violate Section 31A-23a-401 and are not harmful to the public.
2516 (d) Subject to Section 31A-23a-402.5, a producer for the insured may receive
2517 compensation from an insured through an insurer, for the negotiation and sale of a health
2518 benefit plan, if there is a separate written agreement between the insured and the licensee for
2519 the compensation. An insurer who passes through the compensation from the insured to the
2520 licensee under this Subsection (3)(d) is not providing direct or indirect compensation or
2521 commission compensation to the licensee.
2522 (4) (a) For purposes of this Subsection (4):
2523 (i) "Large customer" means an employer who, with respect to a calendar year and to a
2524 plan year:
2525 (A) employed an average of at least 100 eligible employees on each business day
2526 during the preceding calendar year; and
2527 (B) employs at least two employees on the first day of the plan year.
2528 (ii) "Producer" includes:
2529 (A) a producer;
2530 (B) an affiliate of a producer; or
2531 (C) a consultant.
2532 (b) A producer may not accept or receive any compensation from an insurer or third
2533 party administrator for the initial placement of a health benefit plan, other than a hospital
2534 confinement indemnity policy, unless prior to a large customer's initial purchase of the health
2535 benefit plan the producer discloses in writing to the large customer that the producer will
2536 receive compensation from the insurer or third party administrator for the placement of
2537 insurance, including the amount or type of compensation known to the producer at the time of
2538 the disclosure.
2539 (c) A producer shall:
2540 (i) obtain the large customer's signed acknowledgment that the disclosure under
2541 Subsection (4)(b) was made to the large customer; or
2542 (ii) (A) sign a statement that the disclosure required by Subsection (4)(b) was made to
2543 the large customer; and
2544 (B) keep the signed statement on file in the producer's office while the health benefit
2545 plan placed with the large customer is in force.
2546 (d) A licensee who collects or receives any part of the compensation from an insurer or
2547 third party administrator in a manner that facilitates an audit shall, while the health benefit plan
2548 placed with the large customer is in force, maintain a copy of:
2549 (i) the signed acknowledgment described in Subsection (4)(c)(i); or
2550 (ii) the signed statement described in Subsection (4)(c)(ii).
2551 (e) Subsection (4)(c) does not apply to:
2552 (i) a person licensed as a producer who acts only as an intermediary between an insurer
2553 and the customer's producer, including a managing general agent; or
2554 (ii) the placement of insurance in a secondary or residual market.
2555 (f) (i) A producer shall provide to a large customer listed in this Subsection (4)(f) an
2556 annual accounting, as defined by rule made by the department in accordance with Title 63G,
2557 Chapter 3, Utah Administrative Rulemaking Act, of all amounts the producer receives in
2558 commission compensation from an insurer or third party administrator as a result of the sale or
2559 placement of a health benefit plan to a large customer that is:
2560 (A) the state;
2561 (B) a political subdivision or instrumentality of the state or a combination thereof
2562 primarily engaged in educational activities or the administration or servicing of educational
2563 activities, including the State Board of Education and its instrumentalities, an institution of
2564 higher education and its branches, a school district and its instrumentalities, a vocational and
2565 technical school, and an entity arising out of a consolidation agreement between entities
2566 described under this Subsection (4)(f)(i)(B);
2567 (C) a county, city, town, local district under Title 17B, Limited Purpose Local
2568 Government Entities - Local Districts, special service district under Title 17D, Chapter 1,
2569 Special Service District Act, an entity created by an interlocal cooperation agreement under
2570 Title 11, Chapter 13, Interlocal Cooperation Act, or any other governmental entity designated
2571 in statute as a political subdivision of the state; or
2572 (D) a quasi-public corporation, that has the same meaning as defined in Section
2573 63E-1-102.
2574 (ii) The department shall pattern the annual accounting required by this Subsection
2575 (4)(f) on the insurance related information on Internal Revenue Service Form 5500 and its
2576 relevant attachments.
2577 (g) At the request of the department, a producer shall provide the department a copy of:
2578 (i) a disclosure required by this Subsection (4); or
2579 (ii) an Internal Revenue Service Form 5500 and its relevant attachments.
2580 (5) This section does not alter the right of any licensee to recover from an insured the
2581 amount of any premium due for insurance effected by or through that licensee or to charge a
2582 reasonable rate of interest upon past-due accounts.
2583 (6) This section does not apply to bail bond producers or bail enforcement agents as
2584 defined in Section 31A-35-102.
2585 (7) A licensee may not receive noncommission compensation from an insurer, insured,
2586 or enrollee for providing a service or engaging in an act that is required to be provided or
2587 performed in order to receive commission compensation, except for the surplus lines
2588 transactions that do not receive commissions.
2589 Section 39. Section 31A-23b-102 is amended to read:
2590 31A-23b-102. Definitions.
2591 As used in this chapter:
2592 [
2593 [
2594 [
2595 [
2596 (a) (i) obtain personally identifiable information about an individual; and
2597 (ii) inform an individual about accident and health insurance plans or public programs
2598 offered on an exchange;
2599 (b) solicit insurance; or
2600 (c) submit to the exchange:
2601 (i) personally identifiable information about an individual; and
2602 (ii) an individual's selection of a particular accident and health insurance plan or public
2603 program offered on the exchange.
2604 [
2605 States Department of Health and Human Services as either a state-based small employer
2606 exchange or a federally facilitated individual exchange under PPACA.
2607 (b) "Exchange" does not include an online marketplace for the purchase of health
2608 insurance if the online marketplace is not a certified exchange in accordance with Subsection
2609 [
2610 [
2611 (a) means a person who facilitates enrollment in an exchange by offering to assist, or
2612 who advertises any services to assist, with:
2613 (i) the selection of and enrollment in a qualified health plan or a public program
2614 offered on an exchange; or
2615 (ii) applying for premium subsidies through an exchange; and
2616 (b) includes a person who is an in-person assister or a certified application counselor as
2617 described in federal regulations or guidance issued under PPACA.
2618 [
2619 [
2620 Medical Assistance Act, and Chapter 40, Utah Children's Health Insurance Act.
2621 [
2622 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2623 [
2624 Section 40. Section 31A-23b-202.5 is amended to read:
2625 31A-23b-202.5. License types.
2626 (1) A license issued under this chapter shall be issued under the license types described
2627 in Subsection (2).
2628 (2) A license type under this chapter shall be a navigator line of authority or a certified
2629 application counselor line of authority. A license type is intended to describe the matters to be
2630 considered under any education, examination, and training required of an applicant under this
2631 chapter.
2632 (3) (a) A navigator line of authority includes the enrollment process as described in
2633 Subsection 31A-23b-102[
2634 (b) (i) A certified application counselor line of authority is limited to providing
2635 information and assistance to individuals and employees about public programs and premium
2636 subsidies available through the exchange.
2637 (ii) A certified application counselor line of authority does not allow the certified
2638 application counselor to assist a person with the selection of or enrollment in a qualified health
2639 plan offered on an exchange.
2640 Section 41. Section 31A-23b-209 is amended to read:
2641 31A-23b-209. Agency designations.
2642 (1) An organization shall be licensed as a navigator agency if the organization acts as a
2643 navigator.
2644 (2) A navigator agency that does business in the state shall designate an individual who
2645 is licensed under this chapter to act on the agency's behalf.
2646 (3) A navigator agency shall report to the commissioner, at intervals and in the form
2647 the commissioner establishes by rule made in accordance with Title 63G, Chapter 3, Utah
2648 Administrative Rulemaking Act:
2649 (a) a new designation under Subsection (2); and
2650 (b) a terminated designation under Subsection (2).
2651 (4) A navigator agency shall notify an individual designee that the individual's
2652 designation is terminated by the agency and of the reason for termination at an interval and in
2653 the form the commissioner establishes by rule made in accordance with Title 63G, Chapter 3,
2654 Utah Administrative Rulemaking Act.
2655 [
2656 commissioner the cause of termination of a designation if:
2657 (i) the reason for termination is a reason described in Subsection 31A-23b-401(4)(b);
2658 or
2659 (ii) the navigator agency has knowledge that the individual licensee engaged in an
2660 activity described in Subsection 31A-23b-401(4)(b) by:
2661 (A) a court;
2662 (B) a government body; or
2663 (C) a self-regulatory organization, which the commissioner may define by rule made in
2664 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2665 (b) The information provided to the commissioner under Subsection [
2666 private record under Title 63G, Chapter 2, Government Records Access and Management Act.
2667 (c) A navigator agency is immune from civil action, civil penalty, or damages if the
2668 agency complies in good faith with this Subsection [
2669 the cause of termination of a designation.
2670 (d) A navigator agency is not immune from an action or resulting penalty imposed on
2671 the reporting agency as a result of proceedings brought by or on behalf of the department if the
2672 action is based on evidence other than the report submitted in compliance with this Subsection
2673 [
2674 [
2675 it is licensed only through an individual who is licensed under this chapter to act in the same
2676 capacity.
2677 [
2678 the commissioner, in accordance with any rule made by the commissioner pursuant to Title
2679 63G, Chapter 3, Utah Administrative Rulemaking Act, the name of the designated responsible
2680 licensed individual who has authority to act on behalf of the navigator agency in the matters
2681 pertaining to compliance with this title and orders of the commissioner.
2682 [
2682a licensee in reports
2683 submitted under Subsection (3) or [
2684 contracted or designated licensee acts on behalf of the navigator agency.
2685 [
2686 itself and any individual contracted or designated under the navigator agency license are
2687 considered the holders of the navigator agency license for purposes of this section.
2688 (b) If an individual contracted or designated under the navigator agency license
2689 commits an act or fails to perform a duty that is a ground for suspending, revoking, or limiting
2690 the navigator agency license, or assessing a forfeiture under Subsection 31A-2-308(1)(b)(i) or
2691 (1)(c)(i), the commissioner may assess a forfeiture, suspend, revoke, or limit the license of, or
2692 take a combination of these actions against:
2693 (i) the individual;
2694 (ii) the navigator agency, if the navigator agency:
2695 (A) is reckless or negligent in its supervision of the individual; or
2696 (B) knowingly participates in the act or failure to act that is the ground for suspending,
2697 revoking, or limiting the license, or assessing a forfeiture; or
2698 (iii) (A) the individual; and
2699 (B) the navigator agency, if the agency meets the requirements of Subsection [
2700 (9)(b)(ii).
2701 Section 42. Section 31A-23b-210 is amended to read:
2702 31A-23b-210. Place of business and residence address -- Records.
2703 (1) (a) A licensee under this chapter shall register and maintain with the commissioner:
2704 (i) the address and the one or more telephone numbers of the licensee's principal place
2705 of business; and
2706 (ii) a valid business email address at which the commissioner may contact the licensee.
2707 (b) If a licensee is an individual, in addition to complying with Subsection (1)(a), the
2708 individual shall register and maintain with the commissioner the individual's residence address
2709 and telephone number.
2710 (c) A licensee shall notify the commissioner within 30 days of a change of any of the
2711 following required to be registered with the commissioner under this section:
2712 (i) an address;
2713 (ii) a telephone number; or
2714 (iii) a business email address.
2715 (2) Except as provided under Subsection (3), a licensee under this chapter shall keep at
2716 the principal place of business address registered under Subsection (1), separate and distinct
2717 books and records of the transactions consummated under the Utah license.
2718 (3) Subsection (2) is satisfied if the books and records specified in Subsection (2) can
2719 be obtained immediately from a central storage place or elsewhere by online computer
2720 terminals located at the registered address.
2721 (4) (a) The books and records maintained under Subsection (2) shall be available for
2722 the inspection by the commissioner during the business hours for a period of time after the date
2723 of the transaction as specified by the commissioner by rule, but in no case for less than the
2724 current calendar year plus three years.
2725 (b) Discarding books and records after the applicable record retention period has
2726 expired does not place the licensee in violation of a later-adopted longer record retention
2727 period.
2728 Section 43. Section 31A-23b-401 is amended to read:
2729 31A-23b-401. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
2730 terminating a license -- Rulemaking for renewal or reinstatement.
2731 (1) A license as a navigator under this chapter remains in force until:
2732 (a) revoked or suspended under Subsection (4);
2733 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2734 administrative action;
2735 (c) the licensee dies or is adjudicated incompetent as defined under:
2736 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2737 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2738 Minors;
2739 (d) lapsed under this section; or
2740 (e) voluntarily surrendered.
2741 (2) The following may be reinstated within one year after the day on which the license
2742 is no longer in force:
2743 (a) a lapsed license; or
2744 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
2745 not be reinstated after the license period in which the license is voluntarily surrendered.
2746 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
2747 license, submission and acceptance of a voluntary surrender of a license does not prevent the
2748 department from pursuing additional disciplinary or other action authorized under:
2749 (a) this title; or
2750 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
2751 Administrative Rulemaking Act.
2752 (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
2753 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
2754 commissioner may:
2755 (i) revoke a license;
2756 (ii) suspend a license for a specified period of 12 months or less;
2757 (iii) limit a license in whole or in part; [
2758 (iv) deny a license application[
2759 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
2760 (vi) take a combination of actions under Subsections (4)(a)(i) through (iv) and
2761 Subsection (4)(a)(v).
2762 (b) The commissioner may take an action described in Subsection (4)(a) if the
2763 commissioner finds that the licensee:
2764 (i) is unqualified for a license under Section 31A-23b-204, 31A-23b-205, or
2765 31A-23b-206;
2766 (ii) violated:
2767 (A) an insurance statute;
2768 (B) a rule that is valid under Subsection 31A-2-201(3); or
2769 (C) an order that is valid under Subsection 31A-2-201(4);
2770 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
2771 delinquency proceedings in any state;
2772 (iv) failed to pay a final judgment rendered against the person in this state within 60
2773 days after the day on which the judgment became final;
2774 (v) refused:
2775 (A) to be examined; or
2776 (B) to produce its accounts, records, and files for examination;
2777 (vi) had an officer who refused to:
2778 (A) give information with respect to the navigator's affairs; or
2779 (B) perform any other legal obligation as to an examination;
2780 (vii) provided information in the license application that is:
2781 (A) incorrect;
2782 (B) misleading;
2783 (C) incomplete; or
2784 (D) materially untrue;
2785 (viii) violated an insurance law, valid rule, or valid order of another regulatory agency
2786 in any jurisdiction;
2787 (ix) obtained or attempted to obtain a license through misrepresentation or fraud;
2788 (x) improperly withheld, misappropriated, or converted money or properties received
2789 in the course of doing insurance business;
2790 (xi) intentionally misrepresented the terms of an actual or proposed:
2791 (A) insurance contract;
2792 (B) application for insurance; or
2793 (C) application for public program;
2794 (xii) is convicted of a felony;
2795 (xiii) admitted or is found to have committed an insurance unfair trade practice or
2796 fraud;
2797 (xiv) in the conduct of business in this state or elsewhere:
2798 (A) used fraudulent, coercive, or dishonest practices; or
2799 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
2800 (xv) had an insurance license, navigator license, or its equivalent, denied, suspended,
2801 or revoked in another state, province, district, or territory;
2802 (xvi) forged another's name to:
2803 (A) an application for insurance;
2804 (B) a document related to an insurance transaction;
2805 (C) a document related to an application for a public program; or
2806 (D) a document related to an application for premium subsidies;
2807 (xvii) improperly used notes or another reference material to complete an examination
2808 for a license;
2809 (xviii) knowingly accepted insurance business from an individual who is not licensed;
2810 (xix) failed to comply with an administrative or court order imposing a child support
2811 obligation;
2812 (xx) failed to:
2813 (A) pay state income tax; or
2814 (B) comply with an administrative or court order directing payment of state income
2815 tax;
2816 (xxi) violated or permitted others to violate the federal Violent Crime Control and Law
2817 Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and therefore under 18 U.S.C. Sec. 1033 is
2818 prohibited from engaging in the business of insurance; or
2819 (xxii) engaged in a method or practice in the conduct of business that endangered the
2820 legitimate interests of customers and the public.
2821 (c) For purposes of this section, if a license is held by an agency, both the agency itself
2822 and any individual designated under the license are considered to be the holders of the license.
2823 (d) If an individual designated under the agency license commits an act or fails to
2824 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
2825 the commissioner may suspend, revoke, or limit the license of:
2826 (i) the individual;
2827 (ii) the agency, if the agency:
2828 (A) is reckless or negligent in its supervision of the individual; or
2829 (B) knowingly participates in the act or failure to act that is the ground for suspending,
2830 revoking, or limiting the license; or
2831 (iii) (A) the individual; and
2832 (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
2833 (5) A licensee under this chapter is subject to the penalties for acting as a licensee
2834 without a license if:
2835 (a) the licensee's license is:
2836 (i) revoked;
2837 (ii) suspended;
2838 (iii) surrendered in lieu of administrative action;
2839 (iv) lapsed; or
2840 (v) voluntarily surrendered; and
2841 (b) the licensee:
2842 (i) continues to act as a licensee; or
2843 (ii) violates the terms of the license limitation.
2844 (6) A licensee under this chapter shall immediately report to the commissioner:
2845 (a) a revocation, suspension, or limitation of the person's license in another state, the
2846 District of Columbia, or a territory of the United States;
2847 (b) the imposition of a disciplinary sanction imposed on that person by another state,
2848 the District of Columbia, or a territory of the United States; or
2849 (c) a judgment or injunction entered against that person on the basis of conduct
2850 involving:
2851 (i) fraud;
2852 (ii) deceit;
2853 (iii) misrepresentation; or
2854 (iv) a violation of an insurance law or rule.
2855 (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
2856 license in lieu of administrative action may specify a time, not to exceed five years, within
2857 which the former licensee may not apply for a new license.
2858 (b) If no time is specified in an order or agreement described in Subsection (7)(a), the
2859 former licensee may not apply for a new license for five years from the day on which the order
2860 or agreement is made without the express approval of the commissioner.
2861 (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2862 a license issued under this chapter if so ordered by a court.
2863 (9) The commissioner shall by rule prescribe the license renewal and reinstatement
2864 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2865 Section 44. Section 31A-26-209 is amended to read:
2866 31A-26-209. Form and contents of license.
2867 (1) Licenses issued under this chapter shall be in the form the commissioner prescribes
2868 and shall set forth:
2869 (a) the name, address, and the one or more telephone [
2870 licensee;
2871 (b) the license classifications under Section 31A-26-204;
2872 (c) the date of license issuance; and
2873 (d) any other information the commissioner considers advisable.
2874 (2) An adjuster doing business under any other name than the adjuster's legal name
2875 shall notify the commissioner prior to using the assumed name in this state.
2876 (3) (a) An organization shall be licensed as an agency if the organization acts as:
2877 (i) an independent adjuster; or
2878 (ii) a public adjuster.
2879 (b) The agency license issued under Subsection (3)(a) shall set forth the names of all
2880 natural persons licensed under this chapter who are authorized to act in those capacities for the
2881 organization in this state.
2882 Section 45. Section 31A-26-210 is amended to read:
2883 31A-26-210. Reports from organizations licensed as adjusters.
2884 (1) An organization licensed as an adjuster under Section 31A-26-203 shall designate
2885 an individual who has an individual adjuster license to act on the organization's behalf in order
2886 for the licensee to do business for the organization in this state.
2887 (2) An organization licensed under this chapter shall report to the commissioner, at
2888 intervals and in the form the commissioner establishes by rule, made in accordance with Title
2889 63G, Chapter 3, Utah Administrative Rulemaking Act:
2890 (a) a new designation; and
2891 (b) a terminated designation.
2892 (3) An organization licensed under this chapter shall notify an individual licensee that
2893 the individual's designation has been terminated by the organization and of the reason for the
2894 termination at an interval and in the form the commissioner establishes by rule made in
2895 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2896 [
2897 commissioner the cause of termination of a designation if:
2898 (i) the reason for termination is a reason described in Subsection 31A-26-213(5)(b); or
2899 (ii) the organization has knowledge that the individual licensee is found to have
2900 engaged in an activity described in Subsection 31A-26-213(5)(b) by:
2901 (A) a court;
2902 (B) a government body; or
2903 (C) a self-regulatory organization, which the commissioner may define by rule made in
2904 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2905 (b) The information provided the commissioner under Subsection [
2906 private record under Title 63G, Chapter 2, Government Records Access and Management Act.
2907 (c) An organization is immune from civil action, civil penalty, or damages if the
2908 organization complies in good faith with this Subsection [
2909 commissioner the cause of termination of a designation.
2910 (d) Notwithstanding any other provision in this section, an organization is not immune
2911 from an action or resulting penalty imposed on the reporting organization as a result of a
2912 proceeding brought by or on behalf of the department if the action is based on evidence other
2913 than the report submitted in compliance with this Subsection [
2914 [
2915 is licensed only through an individual who is licensed under this chapter to act in the same
2916 capacity.
2917 [
2918 promptly to the commissioner the name of the designated responsible licensed individual who
2919 has authority to act on behalf of the organization in all matters pertaining to compliance with
2920 this title and orders of the commissioner.
2921 [
2921a report submitted under
2922 Subsection (2) or [
2923 licensee acts on behalf of the agency.
2924 [
2925 an individual contracted or designated under the license shall, for purposes of this section, be
2926 considered to be the holders of the organization license.
2927 (b) If an individual designated under the organization license commits an act or fails to
2928 perform a duty that is a ground for suspending, revoking, or limiting the organization license,
2929 the commissioner may assess a forfeiture against, suspend, revoke, or limit the license of, or
2930 take a combination of these actions against:
2931 (i) that individual;
2932 (ii) the organization, if the organization:
2933 (A) is reckless or negligent in its supervision of the individual; or
2934 (B) knowingly participates in the act or failure to act that is the ground for assessing a
2935 forfeiture or suspending, revoking, or limiting the license; or
2936 (iii) (A) the individual; and
2937 (B) the organization, if the organization meets the requirements of Subsection [
2938 (8)(b)(ii).
2939 Section 46. Section 31A-26-213 is amended to read:
2940 31A-26-213. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
2941 terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
2942 (1) A license type issued under this chapter remains in force until:
2943 (a) revoked or suspended under Subsection (5);
2944 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2945 administrative action;
2946 (c) the licensee dies or is adjudicated incompetent as defined under:
2947 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2948 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2949 Minors;
2950 (d) lapsed under Section 31A-26-214.5; or
2951 (e) voluntarily surrendered.
2952 (2) The following may be reinstated within one year after the day on which the license
2953 is no longer in force:
2954 (a) a lapsed license; or
2955 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
2956 not be reinstated after the license period in which it is voluntarily surrendered.
2957 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
2958 license, submission and acceptance of a voluntary surrender of a license does not prevent the
2959 department from pursuing additional disciplinary or other action authorized under:
2960 (a) this title; or
2961 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
2962 Administrative Rulemaking Act.
2963 (4) A license classification issued under this chapter remains in force until:
2964 (a) the qualifications pertaining to a license classification are no longer met by the
2965 licensee; or
2966 (b) the supporting license type:
2967 (i) is revoked or suspended under Subsection (5); or
2968 (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
2969 administrative action.
2970 (5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
2971 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
2972 commissioner may:
2973 (i) revoke:
2974 (A) a license; or
2975 (B) a license classification;
2976 (ii) suspend for a specified period of 12 months or less:
2977 (A) a license; or
2978 (B) a license classification;
2979 (iii) limit in whole or in part:
2980 (A) a license; or
2981 (B) a license classification; [
2982 (iv) deny a license application[
2983 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
2984 (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
2985 Subsection (5)(a)(v).
2986 (b) The commissioner may take an action described in Subsection (5)(a) if the
2987 commissioner finds that the licensee:
2988 (i) is unqualified for a license or license classification under Section 31A-26-202,
2989 31A-26-203, 31A-26-204, or 31A-26-205;
2990 (ii) has violated:
2991 (A) an insurance statute;
2992 (B) a rule that is valid under Subsection 31A-2-201(3); or
2993 (C) an order that is valid under Subsection 31A-2-201(4);
2994 (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
2995 delinquency proceedings in any state;
2996 (iv) fails to pay a final judgment rendered against the person in this state within 60
2997 days after the judgment became final;
2998 (v) fails to meet the same good faith obligations in claims settlement that is required of
2999 admitted insurers;
3000 (vi) is affiliated with and under the same general management or interlocking
3001 directorate or ownership as another insurance adjuster that transacts business in this state
3002 without a license;
3003 (vii) refuses:
3004 (A) to be examined; or
3005 (B) to produce its accounts, records, and files for examination;
3006 (viii) has an officer who refuses to:
3007 (A) give information with respect to the insurance adjuster's affairs; or
3008 (B) perform any other legal obligation as to an examination;
3009 (ix) provides information in the license application that is:
3010 (A) incorrect;
3011 (B) misleading;
3012 (C) incomplete; or
3013 (D) materially untrue;
3014 (x) has violated an insurance law, valid rule, or valid order of another regulatory
3015 agency in any jurisdiction;
3016 (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
3017 (xii) has improperly withheld, misappropriated, or converted money or properties
3018 received in the course of doing insurance business;
3019 (xiii) has intentionally misrepresented the terms of an actual or proposed:
3020 (A) insurance contract; or
3021 (B) application for insurance;
3022 (xiv) has been convicted of a felony;
3023 (xv) has admitted or been found to have committed an insurance unfair trade practice
3024 or fraud;
3025 (xvi) in the conduct of business in this state or elsewhere has:
3026 (A) used fraudulent, coercive, or dishonest practices; or
3027 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
3028 (xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in
3029 any other state, province, district, or territory;
3030 (xviii) has forged another's name to:
3031 (A) an application for insurance; or
3032 (B) a document related to an insurance transaction;
3033 (xix) has improperly used notes or any other reference material to complete an
3034 examination for an insurance license;
3035 (xx) has knowingly accepted insurance business from an individual who is not
3036 licensed;
3037 (xxi) has failed to comply with an administrative or court order imposing a child
3038 support obligation;
3039 (xxii) has failed to:
3040 (A) pay state income tax; or
3041 (B) comply with an administrative or court order directing payment of state income
3042 tax;
3043 (xxiii) has violated or permitted others to violate the federal Violent Crime Control and
3044 Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and therefore under 18 U.S.C. Sec. 1033 is
3045 prohibited from engaging in the business of insurance; or
3046 (xxiv) has engaged in methods and practices in the conduct of business that endanger
3047 the legitimate interests of customers and the public.
3048 (c) For purposes of this section, if a license is held by an agency, both the agency itself
3049 and any individual designated under the license are considered to be the holders of the license.
3050 (d) If an individual designated under the agency license commits an act or fails to
3051 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
3052 the commissioner may suspend, revoke, or limit the license of:
3053 (i) the individual;
3054 (ii) the agency, if the agency:
3055 (A) is reckless or negligent in its supervision of the individual; or
3056 (B) knowingly participated in the act or failure to act that is the ground for suspending,
3057 revoking, or limiting the license; or
3058 (iii) (A) the individual; and
3059 (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
3060 (6) A licensee under this chapter is subject to the penalties for conducting an insurance
3061 business without a license if:
3062 (a) the licensee's license is:
3063 (i) revoked;
3064 (ii) suspended;
3065 (iii) limited;
3066 (iv) surrendered in lieu of administrative action;
3067 (v) lapsed; or
3068 (vi) voluntarily surrendered; and
3069 (b) the licensee:
3070 (i) continues to act as a licensee; or
3071 (ii) violates the terms of the license limitation.
3072 (7) A licensee under this chapter shall immediately report to the commissioner:
3073 (a) a revocation, suspension, or limitation of the person's license in any other state, the
3074 District of Columbia, or a territory of the United States;
3075 (b) the imposition of a disciplinary sanction imposed on that person by any other state,
3076 the District of Columbia, or a territory of the United States; or
3077 (c) a judgment or injunction entered against that person on the basis of conduct
3078 involving:
3079 (i) fraud;
3080 (ii) deceit;
3081 (iii) misrepresentation; or
3082 (iv) a violation of an insurance law or rule.
3083 (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
3084 license in lieu of administrative action may specify a time not to exceed five years within
3085 which the former licensee may not apply for a new license.
3086 (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
3087 former licensee may not apply for a new license for five years without the express approval of
3088 the commissioner.
3089 (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
3090 a license issued under this part if so ordered by a court.
3091 (10) The commissioner shall by rule prescribe the license renewal and reinstatement
3092 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
3093 Section 47. Section 31A-26-312 is enacted to read:
3094 31A-26-312. Prohibited conduct.
3095 (1) An independent adjuster or public adjuster may not:
3096 (a) participate directly or indirectly in the reconstruction, repair, or restoration of
3097 damaged property that is the subject of a claim adjusted by the independent adjuster or public
3098 adjuster;
3099 (b) engage in any other activities that may reasonably be construed as presenting a
3100 conflict of interest, including soliciting or accepting remuneration from, or having a financial
3101 interest in, or deriving any direct or indirect financial benefit from, a salvage firm, repair firm,
3102 construction firm, or other firm that obtains business in connection with a claim that the
3103 independent adjuster or public adjuster has a contract or agreement to adjust;
3104 (c) subject to Subsection (2), directly or indirectly solicit employment for an attorney
3105 or enter into a contract with an insured for the primary purpose of referring an insured to an
3106 attorney and without actually performing the services customarily provided by an independent
3107 adjuster or public adjuster;
3108 (d) act on behalf of an attorney in having an insured sign an attorney representation
3109 agreement; or
3110 (e) accept a fee, commission, or other valuable consideration of any nature, regardless
3111 of form or amount, in exchange for the referral by an independent adjuster or public adjuster of
3112 an insured to a third-party person, including an attorney, appraiser, umpire, construction
3113 company, contractor, repair firm, or salvage company.
3114 (2) Subsection (1)(c) may not be construed to prohibit an independent adjuster or
3115 public adjuster from recommending a specific attorney to an insured.
3116 (3) An independent adjuster or public adjuster who violates this section is subject to
3117 Section 31A-2-308.
3118 Section 48. Section 31A-26-401 is enacted to read:
3119
3120 31A-26-401. Required contracts.
3121 (1) A public adjuster may not, directly or indirectly, act within this state as a public
3122 adjuster without having first entered into a contract, in writing, on a form filed with the
3123 department in accordance with Section 31A-21-201, executed in duplicate by the public
3124 adjuster and the insured or the insured's duly authorized representative. A public adjuster may
3125 not use a form of contract that is not filed with the department.
3126 (2) A contract described in Subsection (1) is subject to recision in accordance with
3127 Section 31A-26-311.
3128 (3) (a) A contract described in Subsection (1) shall include a prominently displayed
3129 notice in 12-point boldface type that states "WE REPRESENT THE INSURED ONLY."
3130 (b) The commissioner by rule, made in accordance with Title 63G, Chapter 3, Utah
3131 Administrative Rulemaking Act, may require additional prominently displayed notice
3132 requirements in the contract as the commissioner considers necessary.
3133 (4) A public adjuster shall keep at the public adjuster's principal place of business Ŝ→ [
3134 this state
3134a plus three years,
3135 and each contract shall be available at all times for inspection, without notice, by the
3136 commissioner or the commissioner's authorized representative.
3137 (5) A public adjuster may not enter into a contract with an insured and collect
3138 compensation as provided in the contract without actually performing the services customarily
3139 provided by a licensed public adjuster for the insured.
3140 Section 49. Section 31A-26-402 is enacted to read:
3141 31A-26-402. Compensation.
3142 (1) Except as provided by Subsection (2), a public adjuster may receive compensation
3143 for service provided under this chapter consisting of an hourly fee, a flat rate, a percentage of
3144 the total amount paid by an insurer to resolve a claim, or another method of compensation. Ŝ→ [
3145 total compensation received may not exceed 10% of the amount of the insurance settlement on
3146 the claim.
3147 (2) (a) A public adjuster may not receive a compensation consisting of a percentage of
3148 the total amount paid by an insurer to resolve a claim on a claim on which the insurer, not later
3149 than 72 hours after the date on which the loss is reported to the insurer, either pays or commits
3150 in writing to pay to the insured the policy limit of the insurance policy.
3151 (b) A public adjuster is entitled to reasonable compensation from the insured for
3152 services provided by the public adjuster on behalf of the insured, based on the time spent on a
3153 claim that is subject to this Subsection (2) and expenses incurred by the public adjuster, until
3154 the claim is paid or the insured receives a written commitment to pay from the insurer.
3155 (3) Except for the payment of compensation by the insured, a person paying proceeds
3156 of a policy of insurance or making a payment affecting an insured's rights under a policy of
3157 insurance shall:
3158 (a) include the insured as a payee on the payment draft or check; and
3159 (b) require the written signature and endorsement of the insured on the payment draft
3160 or check.
3161 (4) A public adjuster may not accept any payment that violates this section
3162 notwithstanding whether the insured gives authorization to the public adjuster. A public
3163 adjuster may not sign and endorse any payment draft or check on behalf of an insured.
3164 Section 50. Section 31A-26-403 is enacted to read:
3165 31A-26-403. Rulemaking.
3166 The commissioner may make rules, in accordance with Title 63G, Chapter 3, Utah
3167 Administrative Rulemaking Act:
3168 (1) addressing the forms required by this part;
3169 (2) providing for notice requirements in contracts; and
3170 (3) establishing the scope of a contract a public adjuster enters into with an insured that
3171 the public adjuster represents.
3172 Section 51. Section 31A-30-106 is amended to read:
3173 31A-30-106. Individual premiums -- Rating restrictions -- Disclosure.
3174 (1) Premium rates for health benefit plans for individuals under this chapter are subject
3175 to this section.
3176 (a) The index rate for a rating period for any class of business may not exceed the
3177 index rate for any other class of business by more than 20%.
3178 (b) (i) For a class of business, the premium rates charged during a rating period to
3179 covered insureds with similar case characteristics for the same or similar coverage, or the rates
3180 that could be charged to the individual under the rating system for that class of business, may
3181 not vary from the index rate by more than 30% of the index rate except as provided under
3182 Subsection (1)(b)(ii).
3183 (ii) A carrier that offers individual and small employer health benefit plans may use the
3184 small employer index rates to establish the rate limitations for individual policies, even if some
3185 individual policies are rated below the small employer base rate.
3186 (c) The percentage increase in the premium rate charged to a covered insured for a new
3187 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
3188 the following:
3189 (i) the percentage change in the new business premium rate measured from the first day
3190 of the prior rating period to the first day of the new rating period;
3191 (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
3192 of less than one year, due to the claim experience, health status, or duration of coverage of the
3193 covered individuals as determined from the rate manual for the class of business of the carrier
3194 offering an individual health benefit plan; and
3195 (iii) any adjustment due to change in coverage or change in the case characteristics of
3196 the covered insured as determined from the rate manual for the class of business of the carrier
3197 offering an individual health benefit plan.
3198 (d) (i) A carrier offering an individual health benefit plan shall apply rating factors,
3199 including case characteristics, consistently with respect to all covered insureds in a class of
3200 business.
3201 (ii) Rating factors shall produce premiums for identical individuals that:
3202 (A) differ only by the amounts attributable to plan design; and
3203 (B) do not reflect differences due to the nature of the individuals assumed to select
3204 particular health benefit [
3205 (iii) A carrier offering an individual health benefit plan shall treat all health benefit
3206 plans issued or renewed in the same calendar month as having the same rating period.
3207 (e) For the purposes of this Subsection (1), a health benefit plan that uses a restricted
3208 network provision may not be considered similar coverage to a health benefit plan that does not
3209 use a restricted network provision, provided that use of the restricted network provision results
3210 in substantial difference in claims costs.
3211 (f) A carrier offering a health benefit plan to an individual may not, without prior
3212 approval of the commissioner, use case characteristics other than:
3213 (i) age;
3214 (ii) gender;
3215 (iii) geographic area; and
3216 (iv) family composition.
3217 (g) (i) The commissioner shall establish rules in accordance with Title 63G, Chapter 3,
3218 Utah Administrative Rulemaking Act, to:
3219 (A) implement this chapter;
3220 (B) assure that rating practices used by carriers who offer health benefit plans to
3221 individuals are consistent with the purposes of this chapter; and
3222 (C) promote transparency of rating practices of health benefit plans, except that a
3223 carrier may not be required to disclose proprietary information.
3224 (ii) The rules described in Subsection (1)(g)(i) may include rules that:
3225 (A) assure that differences in rates charged for health benefit [
3226 carriers who offer health benefit plans to individuals are reasonable and reflect objective
3227 differences in plan design, not including differences due to the nature of the individuals
3228 assumed to select particular health benefit [
3229 (B) prescribe the manner in which case characteristics may be used by carriers who
3230 offer health benefit plans to individuals.
3231 (h) The commissioner shall revise rules issued for Sections 31A-22-602 and
3232 31A-22-605 regarding individual accident and health policy rates to allow rating in accordance
3233 with this section.
3234 (2) For purposes of Subsection (1)(c)(i), if a health benefit [
3235 benefit [
3236 insureds, the covered carrier shall use the percentage change in the base premium rate,
3237 provided that the change does not exceed, on a percentage basis, the change in the new
3238 business premium rate for the most similar health benefit product into which the covered
3239 carrier is actively enrolling new covered insureds.
3240 (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
3241 a class of business.
3242 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
3243 of business unless the offer is made to transfer all covered insureds in the class of business
3244 without regard to:
3245 (i) case characteristics;
3246 (ii) claim experience;
3247 (iii) health status; or
3248 (iv) duration of coverage since issue.
3249 (4) (a) A carrier who offers a health benefit plan to an individual shall maintain at the
3250 carrier's principal place of business a complete and detailed description of its rating practices
3251 and renewal underwriting practices, including information and documentation that demonstrate
3252 that the carrier's rating methods and practices are:
3253 (i) based upon commonly accepted actuarial assumptions; and
3254 (ii) in accordance with sound actuarial principles.
3255 (b) (i) A carrier subject to this section shall file with the commissioner, on or before
3256 April 1 of each year, in a form, manner, and containing such information as prescribed by the
3257 commissioner, an actuarial certification certifying that:
3258 (A) the carrier is in compliance with this chapter; and
3259 (B) the rating methods of the carrier are actuarially sound.
3260 (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
3261 carrier at the carrier's principal place of business.
3262 (c) A carrier shall make the information and documentation described in this
3263 Subsection (4) available to the commissioner upon request.
3264 (d) Except as provided in Subsection (1)(g) or required by PPACA, a record submitted
3265 to the commissioner under this section shall be maintained by the commissioner as a protected
3266 record under Title 63G, Chapter 2, Government Records Access and Management Act.
3267 Section 52. Section 31A-30-106.1 is amended to read:
3268 31A-30-106.1. Small employer premiums -- Rating restrictions -- Disclosure.
3269 (1) Premium rates for small employer health benefit plans under this chapter are
3270 subject to this section.
3271 (2) (a) The index rate for a rating period for any class of business may not exceed the
3272 index rate for any other class of business by more than 20%.
3273 (b) For a class of business, the premium rates charged during a rating period to covered
3274 insureds with similar case characteristics for the same or similar coverage, or the rates that
3275 could be charged to an employer group under the rating system for that class of business, may
3276 not vary from the index rate by more than 30% of the index rate, except when catastrophic
3277 mental health coverage is selected as provided in Subsection 31A-22-625(2)(d).
3278 (3) The percentage increase in the premium rate charged to a covered insured for a new
3279 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
3280 the following:
3281 (a) the percentage change in the new business premium rate measured from the first
3282 day of the prior rating period to the first day of the new rating period;
3283 (b) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
3284 of less than one year, due to the claim experience, health status, or duration of coverage of the
3285 covered individuals as determined from the small employer carrier's rate manual for the class of
3286 business, except when catastrophic mental health coverage is selected as provided in
3287 Subsection 31A-22-625(2)(d); and
3288 (c) any adjustment due to change in coverage or change in the case characteristics of
3289 the covered insured as determined for the class of business from the small employer carrier's
3290 rate manual.
3291 (4) (a) Adjustments in rates for claims experience, health status, and duration from
3292 issue may not be charged to individual employees or dependents.
3293 (b) Rating adjustments and factors, including case characteristics, shall be applied
3294 uniformly and consistently to the rates charged for all employees and dependents of the small
3295 employer.
3296 (c) Rating factors shall produce premiums for identical groups that:
3297 (i) differ only by the amounts attributable to plan design; and
3298 (ii) do not reflect differences due to the nature of the groups assumed to select
3299 particular health benefit [
3300 (d) A small employer carrier shall treat all health benefit plans issued or renewed in the
3301 same calendar month as having the same rating period.
3302 (5) A health benefit plan that uses a restricted network provision may not be considered
3303 similar coverage to a health benefit plan that does not use a restricted network provision,
3304 provided that use of the restricted network provision results in substantial difference in claims
3305 costs.
3306 (6) The small employer carrier may not use case characteristics other than the
3307 following:
3308 (a) age of the employee, in accordance with Subsection (7);
3309 (b) geographic area;
3310 (c) family composition in accordance with Subsection (9);
3311 (d) for plans renewed or effective on or after July 1, 2011, gender of the employee and
3312 spouse;
3313 (e) for an individual age 65 and older, whether the employer policy is primary or
3314 secondary to Medicare; and
3315 (f) a wellness program, in accordance with Subsection (12).
3316 (7) Age limited to:
3317 (a) the following age bands:
3318 (i) less than 20;
3319 (ii) 20-24;
3320 (iii) 25-29;
3321 (iv) 30-34;
3322 (v) 35-39;
3323 (vi) 40-44;
3324 (vii) 45-49;
3325 (viii) 50-54;
3326 (ix) 55-59;
3327 (x) 60-64; and
3328 (xi) 65 and above; and
3329 (b) a standard slope ratio range for each age band, applied to each family composition
3330 tier rating structure under Subsection (9)(b):
3331 (i) as developed by the commissioner by administrative rule; and
3332 (ii) not to exceed an overall ratio as provided in Subsection (8).
3333 (8) (a) The overall ratio permitted in Subsection (7)(b)(ii) may not exceed:
3334 (i) 5:1 for plans renewed or effective before January 1, 2012; and
3335 (ii) 6:1 for plans renewed or effective on or after January 1, 2012; and
3336 (b) the age slope ratios for each age band may not overlap.
3337 (9) Except as provided in Subsection 31A-30-207(2), family composition is limited to:
3338 (a) an overall ratio of:
3339 (i) 5:1 or less for plans renewed or effective before January 1, 2012; and
3340 (ii) 6:1 or less for plans renewed or effective on or after January 1, 2012; and
3341 (b) a tier rating structure that includes:
3342 (i) four tiers that include:
3343 (A) employee only;
3344 (B) employee plus spouse;
3345 (C) employee plus a child or children; and
3346 (D) a family, consisting of an employee plus spouse, and a child or children;
3347 (ii) for plans renewed or effective on or after January 1, 2012, five tiers that include:
3348 (A) employee only;
3349 (B) employee plus spouse;
3350 (C) employee plus one child;
3351 (D) employee plus two or more children; and
3352 (E) employee plus spouse plus one or more children; or
3353 (iii) for plans renewed or effective on or after January 1, 2012, six tiers that include:
3354 (A) employee only;
3355 (B) employee plus spouse;
3356 (C) employee plus one child;
3357 (D) employee plus two or more children;
3358 (E) employee plus spouse plus one child; and
3359 (F) employee plus spouse plus two or more children.
3360 (10) If a health benefit plan is a health benefit plan into which the small employer
3361 carrier is no longer enrolling new covered insureds, the small employer carrier shall use the
3362 percentage change in the base premium rate, provided that the change does not exceed, on a
3363 percentage basis, the change in the new business premium rate for the most similar health
3364 benefit [
3365 insureds.
3366 (11) (a) A covered carrier may not transfer a covered insured involuntarily into or out
3367 of a class of business.
3368 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
3369 of business unless the offer is made to transfer all covered insureds in the class of business
3370 without regard to:
3371 (i) case characteristics;
3372 (ii) claim experience;
3373 (iii) health status; or
3374 (iv) duration of coverage since issue.
3375 (12) Notwithstanding Subsection (4)(b), a small employer carrier may:
3376 (a) offer a wellness program to a small employer group if:
3377 (i) the premium discount to the employer for the wellness program does not exceed
3378 20% of the premium for the small employer group; and
3379 (ii) the carrier offers the wellness program discount uniformly across all small
3380 employer groups;
3381 (b) offer a premium discount as part of a wellness program to individual employees in
3382 a small employer group:
3383 (i) to the extent allowed by federal law; and
3384 (ii) if the employee discount based on the wellness program is offered uniformly across
3385 all small employer groups; and
3386 (c) offer a combination of premium discounts for the employer and the employee,
3387 based on a wellness program, if:
3388 (i) the employer discount complies with Subsection (12)(a); and
3389 (ii) the employee discount complies with Subsection (12)(b).
3390 (13) (a) [
3391 principal place of business a complete and detailed description of its rating practices and
3392 renewal underwriting practices, including information and documentation that demonstrate that
3393 the small employer carrier's rating methods and practices are:
3394 (i) based upon commonly accepted actuarial assumptions; and
3395 (ii) in accordance with sound actuarial principles.
3396 (b) (i) [
3397 April 1 of each year, in a form and manner and containing information as prescribed by the
3398 commissioner, an actuarial certification certifying that:
3399 (A) the small employer carrier is in compliance with this chapter; and
3400 (B) the rating methods of the small employer carrier are actuarially sound.
3401 (ii) A copy of the certification required by Subsection (13)(b)(i) shall be retained by the
3402 small employer carrier at the small employer carrier's principal place of business.
3403 (c) A small employer carrier shall make the information and documentation described
3404 in this Subsection (13) available to the commissioner upon request.
3405 (14) (a) The commissioner shall establish rules in accordance with Title 63G, Chapter
3406 3, Utah Administrative Rulemaking Act, to:
3407 (i) implement this chapter; and
3408 (ii) assure that rating practices used by small employer carriers under this section and
3409 carriers for individual plans under Section 31A-30-106 are consistent with the purposes of this
3410 chapter.
3411 (b) The rules may:
3412 (i) assure that differences in rates charged for health benefit plans by carriers are
3413 reasonable and reflect objective differences in plan design, not including differences due to the
3414 nature of the groups or individuals assumed to select particular health benefit plans; and
3415 (ii) prescribe the manner in which case characteristics may be used by small employer
3416 and individual carriers.
3417 (15) Records submitted to the commissioner under this section shall be maintained by
3418 the commissioner as protected records under Title 63G, Chapter 2, Government Records
3419 Access and Management Act.
3420 Section 53. Section 31A-30-107 is amended to read:
3421 31A-30-107. Renewal -- Limitations -- Exclusions -- Discontinuance and
3422 nonrenewal.
3423 (1) Except as otherwise provided in this section, a small employer health benefit plan is
3424 renewable and continues in force:
3425 (a) with respect to all eligible employees and dependents; and
3426 (b) at the option of the plan sponsor.
3427 (2) A small employer health benefit plan may be discontinued or nonrenewed:
3428 (a) for a network plan, if there is no longer any enrollee under the group health plan
3429 who lives, resides, or works in:
3430 (i) the service area of the covered carrier; or
3431 (ii) the area for which the covered carrier is authorized to do business; or
3432 (b) for coverage made available in the small or large employer market only through an
3433 association, if:
3434 (i) the employer's membership in the association ceases; and
3435 (ii) the coverage is terminated uniformly without regard to any health status-related
3436 factor relating to any covered individual.
3437 (3) A small employer health benefit plan may be discontinued if:
3438 (a) a condition described in Subsection (2) exists;
3439 (b) except as prohibited by Section 31A-30-206, the plan sponsor fails to pay
3440 premiums or contributions in accordance with the terms of the contract;
3441 (c) the plan sponsor:
3442 (i) performs an act or practice that constitutes fraud; or
3443 (ii) makes an intentional misrepresentation of material fact under the terms of the
3444 coverage;
3445 (d) the covered carrier:
3446 (i) elects to discontinue offering a particular small employer health benefit [
3447 plan delivered or issued for delivery in this state; and
3448 (ii) (A) provides notice of the discontinuation in writing:
3449 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
3450 (II) at least 90 days before the date the coverage will be discontinued;
3451 (B) provides notice of the discontinuation in writing:
3452 (I) to the commissioner; and
3453 (II) at least three working days prior to the date the notice is sent to the affected plan
3454 sponsors, employees, and dependents of the plan sponsors or employees;
3455 (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all
3456 other small employer health benefit [
3457 employer carrier in the market; and
3458 (D) in exercising the option to discontinue that [
3459 offering the option of coverage in this section, acts uniformly without regard to:
3460 (I) the claims experience of a plan sponsor;
3461 (II) any health status-related factor relating to any covered participant or beneficiary; or
3462 (III) any health status-related factor relating to any new participant or beneficiary who
3463 may become eligible for the coverage; or
3464 (e) the covered carrier:
3465 (i) elects to discontinue all of the covered carrier's small employer health benefit plans
3466 in:
3467 (A) the small employer market;
3468 (B) the large employer market; or
3469 (C) both the small employer and large employer markets; and
3470 (ii) (A) provides notice of the discontinuation in writing:
3471 (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
3472 (II) at least 180 days before the date the coverage will be discontinued;
3473 (B) provides notice of the discontinuation in writing:
3474 (I) to the commissioner in each state in which an affected insured individual is known
3475 to reside; and
3476 (II) at least 30 working days prior to the date the notice is sent to the affected plan
3477 sponsors, employees, and the dependents of the plan sponsors or employees;
3478 (C) discontinues and nonrenews all plans issued or delivered for issuance in the
3479 market; and
3480 (D) provides a plan of orderly withdrawal as required by Section 31A-4-115.
3481 (4) A small employer health benefit plan may be discontinued or nonrenewed:
3482 (a) if a condition described in Subsection (2) exists; or
3483 (b) except as prohibited by Section 31A-30-206, for noncompliance with the insurer's
3484 employer contribution requirements.
3485 (5) A small employer health benefit plan may be nonrenewed:
3486 (a) if a condition described in Subsection (2) exists; or
3487 (b) except as prohibited by Section 31A-30-206, for noncompliance with the insurer's
3488 minimum participation requirements.
3489 (6) (a) Except as provided in Subsection (6)(d), an eligible employee may be
3490 discontinued if after issuance of coverage the eligible employee:
3491 (i) engages in an act or practice that constitutes fraud in connection with the coverage;
3492 or
3493 (ii) makes an intentional misrepresentation of material fact in connection with the
3494 coverage.
3495 (b) An eligible employee that is discontinued under Subsection (6)(a) may reenroll:
3496 (i) 12 months after the date of discontinuance; and
3497 (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
3498 to reenroll.
3499 (c) At the time the eligible employee's coverage is discontinued under Subsection
3500 (6)(a), the covered carrier shall notify the eligible employee of the right to reenroll when
3501 coverage is discontinued.
3502 (d) An eligible employee may not be discontinued under this Subsection (6) because of
3503 a fraud or misrepresentation that relates to health status.
3504 (7) For purposes of this section, a reference to "plan sponsor" includes a reference to
3505 the employer:
3506 (a) with respect to coverage provided to an employer member of the association; and
3507 (b) if the small employer health benefit plan is made available by a covered carrier in
3508 the employer market only through:
3509 (i) an association;
3510 (ii) a trust; or
3511 (iii) a discretionary group.
3512 (8) A covered carrier may modify a small employer health benefit plan only:
3513 (a) at the time of coverage renewal; and
3514 (b) if the modification is effective uniformly among all plans with that product.
3515 Section 54. Section 31A-30-107.1 is amended to read:
3516 31A-30-107.1. Individual discontinuance and nonrenewal.
3517 (1) (a) Except as otherwise provided in this section, a health benefit plan offered on an
3518 individual basis is renewable and continues in force:
3519 (i) with respect to all individuals or dependents; and
3520 (ii) at the option of the individual.
3521 (b) Subsection (1)(a) applies regardless of:
3522 (i) whether the contract is issued through:
3523 (A) a trust;
3524 (B) an association;
3525 (C) a discretionary group; or
3526 (D) other similar grouping; or
3527 (ii) the situs of delivery of the policy or contract.
3528 (2) A health benefit plan may be discontinued or nonrenewed:
3529 (a) for a network plan, if:
3530 (i) the individual no longer lives, resides, or works in:
3531 (A) the service area of the covered carrier; or
3532 (B) the area for which the covered carrier is authorized to do business; and
3533 (ii) coverage is terminated uniformly without regard to any health status-related factor
3534 relating to any covered individual; or
3535 (b) for coverage made available through an association, if:
3536 (i) the individual's membership in the association ceases; and
3537 (ii) the coverage is terminated uniformly without regard to any health status-related
3538 factor of covered individuals.
3539 (3) A health benefit plan may be discontinued if:
3540 (a) a condition described in Subsection (2) exists;
3541 (b) the individual fails to pay premiums or contributions in accordance with the terms
3542 of the health benefit plan, including any timeliness requirements;
3543 (c) the individual:
3544 (i) performs an act or practice that constitutes fraud in connection with the coverage; or
3545 (ii) makes an intentional misrepresentation of material fact under the terms of the
3546 coverage;
3547 (d) the covered carrier:
3548 (i) elects to discontinue offering a particular health benefit [
3549 issued for delivery in this state; and
3550 (ii) (A) provides notice of the discontinuance in writing:
3551 (I) to each individual provided coverage; and
3552 (II) at least 90 days before the date the coverage will be discontinued;
3553 (B) provides notice of the discontinuation in writing:
3554 (I) to the commissioner; and
3555 (II) at least three working days prior to the date the notice is sent to the affected
3556 individuals;
3557 (C) offers to each covered individual on a guaranteed issue basis the option to purchase
3558 all other individual health benefit [
3559 carrier for individuals in that market; and
3560 (D) acts uniformly without regard to any health status-related factor of a covered
3561 individual or dependent of a covered individual who may become eligible for coverage; or
3562 (e) the covered carrier:
3563 (i) elects to discontinue all of the covered carrier's health benefit plans in the individual
3564 market; and
3565 (ii) (A) provides notice of the discontinuation in writing:
3566 (I) to each covered individual; and
3567 (II) at least 180 days before the date the coverage will be discontinued;
3568 (B) provides notice of the discontinuation in writing:
3569 (I) to the commissioner in each state in which an affected insured individual is known
3570 to reside; and
3571 (II) at least 30 working days prior to the date the notice is sent to the affected
3572 individuals;
3573 (C) discontinues and nonrenews all health benefit plans the covered carrier issues or
3574 delivers for issuance in the individual market; and
3575 (D) acts uniformly without regard to any health status-related factor of a covered
3576 individual or a dependent of a covered individual who may become eligible for coverage.
3576a Ĥ→ Section 57. Section 31A-35-103 is amended to read:
3576b 31A-35-103. Exemption from other provisions of this title.
3576c Bail bond agencies are exempted from:
3576d (1) Chapter 3, Department Funding, Fees, and Taxes, except Section 31A-3-103;
3576e (2) Chapter 4, Insurers in General, except Sections 31A-4-102, 31A-4-103, 31A-4-104, and
3576f 31A-4-107;
3576g (3) Chapter 5, Domestic Stock and Mutual Insurance Corporations, except Section 31A-5-103;
3576h (4) Chapter 6a, Service Contracts;
3576i (5) Chapter 6b, Guaranteed Asset Protection Waiver Act;
3576j (6) Chapter 7, Nonprofit Health Service Insurance Corporations;
3576k (7) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
3576l (8) Chapter 8a, Health Discount Program Consumer Protection Act;
3576m (9) Chapter 9, Insurance Fraternals;
3576n (10) Chapter 10, Annuities;
3576o (11) Chapter 11, Motor Clubs;
3576p (12) Chapter 12, State Risk Management Fund;
3576q (13) Chapter 13, Employee Welfare Funds and Plans;
3576r (14) Chapter 14, Foreign Insurers;
3576s (15) Chapter 15, Unauthorized Insurers, Surplus Lines, and Risk Retention Groups;
3576t (16) Chapter 16, Insurance Holding Companies;
3576u (17) Chapter 17, Determination of Financial Condition; ☆
3576v (18) Chapter 18, Investments;
3576w (19) Chapter 19a, Utah Rate Regulation Act;
3576x (20) Chapter 20, Underwriting Restrictions;
3576y (21) Chapter 23b, Navigator License Act;
3576z (22) Chapter 25, Third Party Administrators;
3576aa (23) Chapter 26, Insurance Adjusters;
3576ab (24) Chapter 27, Delinquency Administrative Action Provisions;
3576ac (25) Chapter 27a, Insurer Receivership Act;
3576ad (26) Chapter 28, Guaranty Associations;
3576ae (27) Chapter 30, Individual, Small Employer, and Group Health Insurance Act;
3576af (28) Chapter 31, Insurance Fraud Act;
3576ag (29) Chapter 32a, Medical Care Savings Account Act;
3576ah (30) Chapter 33, Workers' Compensation Fund;
3576ai [
3576aj [
3576ak [
3576al [
3576am [
3576an [
3576ao [
3576ap [
3576aq [
3576ar [
3577 Section Ĥ→ [
3578 31A-37-102. Definitions.
3579 As used in this chapter:
3580 (1) (a) "Affiliated company" means a business entity that because of common
3581 ownership, control, operation, or management is in the same corporate or limited liability
3582 company system as:
3583 [
3584 [
3585 [
3586 (b) Notwithstanding Subsection (1)(a), the commissioner may issue an order finding
3587 that a business entity is not an affiliated company.
3588 (2) "Alien captive insurance company" means an insurer:
3589 (a) formed to write insurance business for a parent or affiliate of the insurer; and
3590 (b) licensed pursuant to the laws of an alien or foreign jurisdiction that imposes
3591 statutory or regulatory standards:
3592 (i) on a business entity transacting the business of insurance in the alien or foreign
3593 jurisdiction; and
3594 (ii) in a form acceptable to the commissioner.
3595 (3) "Association" means a legal association of two or more persons that has been in
3596 continuous existence for at least one year if:
3597 (a) the association or its member organizations:
3598 (i) own, control, or hold with power to vote all of the outstanding voting securities of
3599 an association captive insurance company incorporated as a stock insurer; or
3600 (ii) have complete voting control over an association captive insurance company
3601 incorporated as a mutual insurer;
3602 (b) the association's member organizations collectively constitute all of the subscribers
3603 of an association captive insurance company formed as a reciprocal insurer; or
3604 (c) the association or its member organizations have complete voting control over an
3605 association captive insurance company formed as a limited liability company.
3606 (4) "Association captive insurance company" means a business entity that insures risks
3607 of:
3608 (a) a member organization of the association;
3609 (b) an affiliate of a member organization of the association; and
3610 (c) the association.
3611 (5) "Branch business" means an insurance business transacted by a branch captive
3612 insurance company in this state.
3613 (6) "Branch captive insurance company" means an alien captive insurance company
3614 that has a certificate of authority from the commissioner to transact the business of insurance in
3615 this state through a captive insurance company that is domiciled outside of this state.
3616 (7) "Branch operation" means a business operation of a branch captive insurance
3617 company in this state.
3618 (8) "Captive insurance company" means any of the following formed or holding a
3619 certificate of authority under this chapter:
3620 (a) a branch captive insurance company;
3621 (b) a pure captive insurance company;
3622 (c) an association captive insurance company;
3623 (d) a sponsored captive insurance company;
3624 (e) an industrial insured captive insurance company, including an industrial insured
3625 captive insurance company formed as a risk retention group captive in this state pursuant to the
3626 provisions of the Federal Liability Risk Retention Act of 1986;
3627 (f) a special purpose captive insurance company; or
3628 (g) a special purpose financial captive insurance company.
3629 (9) "Commissioner" means Utah's Insurance Commissioner or the commissioner's
3630 designee.
3631 (10) "Common ownership and control" means that two or more captive insurance
3632 companies are owned or controlled by the same person or group of persons as follows:
3633 (a) in the case of a captive insurance company that is a stock corporation, the direct or
3634 indirect ownership of 80% or more of the outstanding voting stock of the stock corporation;
3635 (b) in the case of a captive insurance company that is a mutual corporation, the direct
3636 or indirect ownership of 80% or more of the surplus and the voting power of the mutual
3637 corporation;
3638 (c) in the case of a captive insurance company that is a limited liability company, the
3639 direct or indirect ownership by the same member or members of 80% or more of the
3640 membership interests in the limited liability company; or
3641 (d) in the case of a sponsored captive insurance company, a protected cell is a separate
3642 captive insurance company owned and controlled by the protected cell's participant, only if:
3643 (i) the participant is the only participant with respect to the protected cell; and
3644 (ii) the participant is the sponsor or is affiliated with the sponsor of the sponsored
3645 captive insurance company through common ownership and control.
3646 (11) "Consolidated debt to total capital ratio" means the ratio of Subsection (11)(a) to
3647 (b).
3648 (a) This Subsection (11)(a) is an amount equal to the sum of all debts and hybrid
3649 capital instruments including:
3650 (i) all borrowings from depository institutions;
3651 (ii) all senior debt;
3652 (iii) all subordinated debts;
3653 (iv) all trust preferred shares; and
3654 (v) all other hybrid capital instruments that are not included in the determination of
3655 consolidated GAAP net worth issued and outstanding.
3656 (b) This Subsection (11)(b) is an amount equal to the sum of:
3657 (i) total capital consisting of all debts and hybrid capital instruments as described in
3658 Subsection (11)(a); and
3659 (ii) shareholders' equity determined in accordance with generally accepted accounting
3660 principles for reporting to the United States Securities and Exchange Commission.
3661 (12) "Consolidated GAAP net worth" means the consolidated shareholders' or
3662 members' equity determined in accordance with generally accepted accounting principles for
3663 reporting to the United States Securities and Exchange Commission.
3664 (13) "Controlled unaffiliated business" means a business entity:
3665 (a) (i) in the case of a pure captive insurance company, that is not in the corporate or
3666 limited liability company system of a parent or the parent's affiliate; or
3667 (ii) in the case of an industrial insured captive insurance company, that is not in the
3668 corporate or limited liability company system of an industrial insured or an affiliated company
3669 of the industrial insured;
3670 (b) (i) in the case of a pure captive insurance company, that has a contractual
3671 relationship with a parent or affiliate; or
3672 (ii) in the case of an industrial insured captive insurance company, that has a
3673 contractual relationship with an industrial insured or an affiliated company of the industrial
3674 insured; and
3675 (c) whose risks that are or will be insured by a pure captive insurance company, an
3676 industrial insured captive insurance company, or both are managed [
3677 accordance with Subsection 31A-37-106(1)(j) by:
3678 (i) (A) a pure captive insurance company; or
3679 [
3680 (ii) a parent or affiliate of:
3681 (A) a pure captive insurance company; or
3682 (B) an industrial insured captive insurance company.
3683 (14) "Department" means the Insurance Department.
3684 (15) "Industrial insured" means an insured:
3685 (a) that produces insurance:
3686 (i) by the services of a full-time employee acting as a risk manager or insurance
3687 manager; or
3688 (ii) using the services of a regularly and continuously qualified insurance consultant;
3689 (b) whose aggregate annual premiums for insurance on all risks total at least $25,000;
3690 and
3691 (c) that has at least 25 full-time employees.
3692 (16) "Industrial insured captive insurance company" means a business entity that:
3693 (a) insures risks of the industrial insureds that comprise the industrial insured group;
3694 and
3695 (b) may insure the risks of:
3696 (i) an affiliated company of an industrial insured; or
3697 (ii) a controlled unaffiliated business of:
3698 (A) an industrial insured; or
3699 (B) an affiliated company of an industrial insured.
3700 (17) "Industrial insured group" means:
3701 (a) a group of industrial insureds that collectively:
3702 (i) own, control, or hold with power to vote all of the outstanding voting securities of
3703 an industrial insured captive insurance company incorporated or organized as a limited liability
3704 company as a stock insurer; or
3705 (ii) have complete voting control over an industrial insured captive insurance company
3706 incorporated or organized as a limited liability company as a mutual insurer;
3707 (b) a group that is:
3708 (i) created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. Sec. 3901
3709 et seq., as amended, as a corporation or other limited liability association; and
3710 (ii) taxable under this title as a:
3711 (A) stock corporation; or
3712 (B) mutual insurer; or
3713 (c) a group that has complete voting control over an industrial captive insurance
3714 company formed as a limited liability company.
3715 (18) "Member organization" means a person that belongs to an association.
3716 (19) "Parent" means a person that directly or indirectly owns, controls, or holds with
3717 power to vote more than 50% of:
3718 (a) the outstanding voting securities of a pure captive insurance company; or
3719 (b) the pure captive insurance company, if the pure captive insurance company is
3720 formed as a limited liability company.
3721 (20) "Participant" means an entity that is insured by a sponsored captive insurance
3722 company:
3723 (a) if the losses of the participant are limited through a participant contract to the assets
3724 of a protected cell; and
3725 (b)(i) the entity is permitted to be a participant under Section 31A-37-403; or
3726 (ii) the entity is an affiliate of an entity permitted to be a participant under Section
3727 31A-37-403.
3728 (21) "Participant contract" means a contract by which a sponsored captive insurance
3729 company:
3730 (a) insures the risks of a participant; and
3731 (b) limits the losses of the participant to the assets of a protected cell.
3732 (22) "Protected cell" means a separate account established and maintained by a
3733 sponsored captive insurance company for one participant.
3734 (23) "Pure captive insurance company" means a business entity that insures risks of a
3735 parent or affiliate of the business entity.
3736 (24) "Special purpose financial captive insurance company" is as defined in Section
3737 31A-37a-102.
3738 (25) "Sponsor" means an entity that:
3739 (a) meets the requirements of Section 31A-37-402; and
3740 (b) is approved by the commissioner to:
3741 (i) provide all or part of the capital and surplus required by applicable law in an amount
3742 of not less than $350,000, which amount the commissioner may increase by order if the
3743 commissioner considers it necessary; and
3744 (ii) organize and operate a sponsored captive insurance company.
3745 (26) "Sponsored captive insurance company" means a captive insurance company:
3746 (a) in which the minimum capital and surplus required by applicable law is provided by
3747 one or more sponsors;
3748 (b) that is formed or holding a certificate of authority under this chapter;
3749 (c) that insures the risks of a separate participant through the contract; and
3750 (d) that segregates each participant's liability through one or more protected cells.
3751 (27) "Treasury rates" means the United States Treasury strip asked yield as published
3752 in the Wall Street Journal as of a balance sheet date.
3753 Section 56. Section 31A-37-106 is amended to read:
3754 31A-37-106. Authority to make rules -- Authority to issue orders.
3755 (1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
3756 commissioner may adopt rules to:
3757 (a) determine circumstances under which a branch captive insurance company is not
3758 required to be a pure captive insurance company;
3759 (b) require a statement, document, or information that a captive insurance company
3760 shall provide to the commissioner to obtain a certificate of authority;
3761 (c) determine a factor a captive insurance company shall provide evidence of under
3762 Subsection 31A-37-202(4)[
3763 (d) prescribe one or more capital requirements for a captive insurance company in
3764 addition to those required under Section 31A-37-204 based on the type, volume, and nature of
3765 insurance business transacted by the captive insurance company;
3766 (e) waive or modify a requirement for public notice and hearing for the following by a
3767 captive insurance company:
3768 (i) merger;
3769 (ii) consolidation;
3770 (iii) conversion;
3771 (iv) mutualization;
3772 (v) redomestication; or
3773 (vi) acquisition;
3774 (f) approve the use of one or more reliable methods of valuation and rating for:
3775 (i) an association captive insurance company;
3776 (ii) a sponsored captive insurance company; or
3777 (iii) an industrial insured group;
3778 (g) prohibit or limit an investment that threatens the solvency or liquidity of:
3779 (i) a pure captive insurance company; or
3780 (ii) an industrial insured captive insurance company;
3781 (h) determine the financial reports a sponsored captive insurance company shall
3782 annually file with the commissioner;
3783 (i) prescribe the required forms and reports under Section 31A-37-501; and
3784 (j) establish one or more standards to ensure that:
3785 (i) one of the following is able to exercise control of the risk management function of a
3786 controlled unaffiliated business to be insured by a pure captive insurance company:
3787 (A) a parent; or
3788 (B) an affiliated company of a parent; or
3789 (ii) one of the following is able to exercise control of the risk management function of
3790 a controlled unaffiliated business to be insured by an industrial insured captive insurance
3791 company:
3792 (A) an industrial insured; or
3793 (B) an affiliated company of the industrial insured.
3794 (2) Notwithstanding Subsection (1)(j), until the commissioner adopts the rules
3795 authorized under Subsection (1)(j), the commissioner may by temporary order grant authority
3796 to insure risks to:
3797 (a) a pure captive insurance company; or
3798 (b) an industrial insured captive insurance company.
3799 (3) The commissioner may issue prohibitory, mandatory, and other orders relating to a
3800 captive insurance company as necessary to enable the commissioner to secure compliance with
3801 this chapter.
3802 Section 57. Section 31A-37-202 is amended to read:
3803 31A-37-202. Permissive areas of insurance.
3804 (1) (a) Except as provided in Subsection (1)(b), when permitted by its articles of
3805 incorporation, certificate of organization, or charter, a captive insurance company may apply to
3806 the commissioner for a certificate of authority to do all insurance authorized by this title except
3807 workers' compensation insurance.
3808 (b) Notwithstanding Subsection (1)(a):
3809 (i) a pure captive insurance company may not insure a risk other than a risk of:
3810 (A) [
3811 (B) a controlled unaffiliated business; or
3812 (C) a combination of Subsections (1)(b)(i)(A) and (B);
3813 (ii) an association captive insurance company may not insure a risk other than a risk of:
3814 (A) an affiliate;
3815 (B) a member organization of its association; and
3816 (C) an affiliate of a member organization of its association;
3817 (iii) an industrial insured captive insurance company may not insure a risk other than a
3818 risk of:
3819 (A) an industrial insured that is part of the industrial insured group;
3820 (B) an affiliate of an industrial insured that is part of the industrial insured group; and
3821 (C) a controlled unaffiliated business of:
3822 (I) an industrial insured that is part of the industrial insured group; or
3823 (II) an affiliate of an industrial insured that is part of the industrial insured group;
3824 (iv) a special purpose captive insurance company may only insure a risk of its parent;
3825 (v) a captive insurance company may not provide:
3826 (A) personal motor vehicle insurance coverage;
3827 (B) homeowner's insurance coverage; or
3828 (C) a component of a coverage described in this Subsection (1)(b)(v); and
3829 (vi) a captive insurance company may not accept or cede reinsurance except as
3830 provided in Section 31A-37-303.
3831 (c) Notwithstanding Subsection (1)(b)(iv), for a risk approved by the commissioner a
3832 special purpose captive insurance company may provide:
3833 (i) insurance;
3834 (ii) reinsurance; or
3835 (iii) both insurance and reinsurance.
3836 (2) To conduct insurance business in this state a captive insurance company shall:
3837 (a) obtain from the commissioner a certificate of authority authorizing it to conduct
3838 insurance business in this state;
3839 (b) hold at least once each year in this state:
3840 (i) a board of directors meeting; or
3841 [
3842 [
3843 (c) maintain in this state:
3844 (i) the principal place of business of the captive insurance company; or
3845 (ii) in the case of a branch captive insurance company, the principal place of business
3846 for the branch operations of the branch captive insurance company; and
3847 (d) except as provided in Subsection (3), appoint a resident registered agent to accept
3848 service of process and to otherwise act on behalf of the captive insurance company in this state.
3849 (3) Notwithstanding Subsection (2)(d), in the case of a captive insurance company
3850 formed as a corporation [
3851 diligence be found at the registered office of the captive insurance company, the commissioner
3852 is the agent of the captive insurance company upon whom process, notice, or demand may be
3853 served.
3854 (4) (a) Before receiving a certificate of authority, a captive insurance company:
3855 (i) formed as a corporation shall file with the commissioner:
3856 (A) a certified copy of:
3857 (I) articles of incorporation or the charter of the corporation; and
3858 (II) bylaws of the corporation;
3859 (B) a statement under oath of the president and secretary of the corporation showing
3860 the financial condition of the corporation; and
3861 (C) any other statement or document required by the commissioner under Section
3862 31A-37-106; and
3863 [
3864 [
3865 [
3866 [
3867 [
3868
3869 [
3870
3871 [
3872 [
3873 [
3874 [
3875 [
3876 [
3877 [
3878 (A) a certified copy of the certificate of organization and the operating agreement of
3879 the organization;
3880 (B) a statement under oath of the president and secretary of the organization showing
3881 the financial condition of the organization;
3882 (C) evidence that the limited liability company is manager-managed; and
3883 (D) any other statement or document required by the commissioner under Section
3884 31A-37-106.
3885 [
3886
3887
3888
3889 [
3890
3891
3892 [
3893
3894 [
3895 captive insurance company shall file with the commissioner evidence of:
3896 (i) the amount and liquidity of the assets of the applicant captive insurance company
3897 relative to the risks to be assumed by the applicant captive insurance company;
3898 (ii) the adequacy of the expertise, experience, and character of the person who will
3899 manage the applicant captive insurance company;
3900 (iii) the overall soundness of the plan of operation of the applicant captive insurance
3901 company;
3902 (iv) the adequacy of the loss prevention programs for the following of the applicant
3903 captive insurance company:
3904 (A) a parent;
3905 (B) a member organization; or
3906 (C) an industrial insured; and
3907 (v) any other factor the commissioner:
3908 (A) adopts by rule under Section 31A-37-106; and
3909 (B) considers relevant in ascertaining whether the applicant captive insurance company
3910 will be able to meet the policy obligations of the applicant captive insurance company.
3911 [
3912
3913 (i) a business plan at the level of detail required by the commissioner under Section
3914 31A-37-106 demonstrating:
3915 (A) the manner in which the applicant sponsored captive insurance company will
3916 account for the losses and expenses of each protected cell; and
3917 (B) the manner in which the applicant sponsored captive insurance company will report
3918 to the commissioner the financial history, including losses and expenses, of each protected cell;
3919 (ii) a statement acknowledging that the applicant sponsored captive insurance company
3920 will make all financial records of the applicant sponsored captive insurance company,
3921 including records pertaining to a protected cell, available for inspection or examination by the
3922 commissioner;
3923 (iii) a contract or sample contract between the applicant sponsored captive insurance
3924 company and a participant; and
3925 (iv) evidence that expenses will be allocated to each protected cell in an equitable
3926 manner.
3927 (5) (a) Information submitted pursuant to Subsection (4) is classified as a protected
3928 record under Title 63G, Chapter 2, Government Records Access and Management Act.
3929 (b) Notwithstanding Title 63G, Chapter 2, Government Records Access and
3930 Management Act, the commissioner may disclose information submitted pursuant to
3931 Subsection (4) to a public official having jurisdiction over the regulation of insurance in
3932 another state if:
3933 (i) the public official receiving the information agrees in writing to maintain the
3934 confidentiality of the information; and
3935 (ii) the laws of the state in which the public official serves require the information to be
3936 confidential.
3937 (c) This Subsection (5) does not apply to information provided by an industrial insured
3938 captive insurance company insuring the risks of an industrial insured group.
3939 (6) (a) A captive insurance company shall pay to the department the following
3940 nonrefundable fees established by the department under Sections 31A-3-103, 31A-3-304, and
3941 63J-1-504:
3942 (i) a fee for examining, investigating, and processing, by a department employee, of an
3943 application for a certificate of authority made by a captive insurance company;
3944 (ii) a fee for obtaining a certificate of authority for the year the captive insurance
3945 company is issued a certificate of authority by the department; and
3946 (iii) a certificate of authority renewal fee.
3947 (b) The commissioner may:
3948 (i) assign a department employee or retain legal, financial, and examination services
3949 from outside the department to perform the services described in:
3950 (A) Subsection (6)(a); and
3951 (B) Section 31A-37-502; and
3952 (ii) charge the reasonable cost of services described in Subsection (6)(b)(i) to the
3953 applicant captive insurance company.
3954 (7) If the commissioner is satisfied that the documents and statements filed by the
3955 applicant captive insurance company comply with this chapter, the commissioner may grant a
3956 certificate of authority authorizing the company to do insurance business in this state.
3957 (8) A certificate of authority granted under this section expires annually and shall be
3958 renewed by July 1 of each year.
3959 Section 58. Section 31A-37-204 is amended to read:
3960 31A-37-204. Paid-in capital -- Other capital.
3961 (1) (a) The commissioner may not issue a certificate of authority to a company
3962 described in Subsection (1)(c) unless the company possesses and thereafter maintains
3963 unimpaired paid-in capital and unimpaired paid-in surplus of:
3964 (i) in the case of a pure captive insurance company, not less than $250,000;
3965 (ii) in the case of an association captive insurance company [
3966
3967 (iii) in the case of an industrial insured captive insurance company incorporated as a
3968 stock insurer, not less than $700,000;
3969 (iv) in the case of a sponsored captive insurance company, not less than $1,000,000, of
3970 which a minimum of $350,000 is provided by the sponsor; or
3971 (v) in the case of a special purpose captive insurance company, an amount determined
3972 by the commissioner after giving due consideration to the company's business plan, feasibility
3973 study, and pro-formas, including the nature of the risks to be insured.
3974 (b) The paid-in capital and surplus required under this Subsection (1) may be in the
3975 form of:
3976 (i) (A) cash; or
3977 (B) cash equivalent;
3978 (ii) an irrevocable letter of credit:
3979 (A) issued by:
3980 (I) a bank chartered by this state; or
3981 (II) a member bank of the Federal Reserve System; and
3982 (B) approved by the commissioner; [
3983 (iii) marketable securities as determined by [
3984 Subsection (5); or
3985 (iv) some other thing of value approved by the commissioner, for a period not to
3986 exceed 45 days, to facilitate the formation of a captive insurance company in this state pursuant
3987 to an approved plan of liquidation and reorganization of another captive insurance company or
3988 alien captive insurance company in another jurisdiction.
3989 (c) This Subsection (1) applies to:
3990 (i) a pure captive insurance company;
3991 (ii) a sponsored captive insurance company;
3992 (iii) a special purpose captive insurance company;
3993 (iv) an association captive insurance company [
3994 (v) an industrial insured captive insurance company [
3995 (2) (a) The commissioner may, under Section 31A-37-106, prescribe additional capital
3996 based on the type, volume, and nature of insurance business transacted.
3997 (b) The capital prescribed by the commissioner under this Subsection (2) may be in the
3998 form of:
3999 (i) cash;
4000 (ii) an irrevocable letter of credit issued by:
4001 (A) a bank chartered by this state; or
4002 (B) a member bank of the Federal Reserve System; or
4003 (iii) marketable securities as determined by [
4004 Subsection (5).
4005 (3) (a) Except as provided in Subsection (3)(c), a branch captive insurance company, as
4006 security for the payment of liabilities attributable to branch operations, shall, through its branch
4007 operations, establish and maintain a trust fund:
4008 (i) funded by an irrevocable letter of credit or other acceptable asset; and
4009 (ii) in the United States for the benefit of:
4010 (A) United States policyholders; and
4011 (B) United States ceding insurers under:
4012 (I) insurance policies issued; or
4013 (II) reinsurance contracts issued or assumed.
4014 (b) The amount of the security required under this Subsection (3) shall be no less than:
4015 (i) the capital and surplus required by this chapter; and
4016 (ii) the reserves on the insurance policies or reinsurance contracts, including:
4017 (A) reserves for losses;
4018 (B) allocated loss adjustment expenses;
4019 (C) incurred but not reported losses; and
4020 (D) unearned premiums with regard to business written through branch operations.
4021 (c) Notwithstanding the other provisions of this Subsection (3)[
4022 (i) the commissioner may permit a branch captive insurance company that is required
4023 to post security for loss reserves on branch business by its reinsurer to reduce the funds in the
4024 trust account required by this section by the same amount as the security posted if the security
4025 remains posted with the reinsurer[
4026 (ii) a branch captive insurance company that is the result of the licensure of an alien
4027 captive insurance company that is not formed in an alien jurisdiction is not subject to the
4028 requirements of this Subsection (3).
4029 (4) (a) A captive insurance company may not pay the following without the prior
4030 approval of the commissioner:
4031 (i) a dividend out of capital or surplus in excess of the limits under Section
4032 16-10a-640; or
4033 (ii) a distribution with respect to capital or surplus in excess of the limits under Section
4034 16-10a-640.
4035 (b) The commissioner shall condition approval of an ongoing plan for the payment of
4036 dividends or other distributions on the retention, at the time of each payment, of capital or
4037 surplus in excess of:
4038 (i) amounts specified by the commissioner under Section 31A-37-106; or
4039 (ii) determined in accordance with formulas approved by the commissioner under
4040 Section 31A-37-106.
4041 [
4042
4043
4044 [
4045
4046 [
4047
4048 [
4049 [
4050 (5) For purposes of this section, marketable securities means:
4051 (a) a bond or other evidence of indebtedness of a governmental unit in the United
4052 States or Canada or any instrumentality of the United States or Canada; or
4053 (b) securities:
4054 (i) traded on one or more of the following exchanges in the United States:
4055 (A) New York;
4056 (B) American; or
4057 (C) NASDAQ;
4058 (ii) when no particular security, or a substantially related security, applied toward the
4059 required minimum capital and surplus requirement of Subsection (1) represents more than 50%
4060 of the minimum capital and surplus requirement; and
4061 (iii) when no group of up to four particular securities, consolidating substantially
4062 related securities, applied toward the required minimum capital and surplus requirement of
4063 Subsection (1) represents more than 90% of the minimum capital and surplus requirement.
4064 (6) Notwithstanding Subsection (5), to protect the solvency and liquidity of a captive
4065 insurance company, the commissioner may reject the application of specific assets or amounts
4066 of specific assets to satisfying the requirement of Subsection (1).
4067 Section 59. Section 31A-37-301 is amended to read:
4068 31A-37-301. Formation.
4069 (1) A pure captive insurance company or a sponsored captive insurance company
4070 formed as a stock insurer shall be incorporated as a stock insurer with the capital of the pure
4071 captive insurance company or sponsored captive insurance company:
4072 (a) divided into shares; and
4073 (b) held by the stockholders of the pure captive insurance company or sponsored
4074 captive insurance company.
4075 (2) A pure captive insurance company or a sponsored captive insurance company
4076 formed as a limited liability company shall be organized as a members' interest insurer with the
4077 capital of the pure captive insurance company or sponsored captive insurance company:
4078 (a) divided into interests; and
4079 (b) held by the members of the pure captive insurance company or sponsored captive
4080 insurance company.
4081 (3) An association captive insurance company or an industrial insured captive
4082 insurance company may be:
4083 (a) incorporated as a stock insurer with the capital of the association captive insurance
4084 company or industrial insured captive insurance company:
4085 (i) divided into shares; and
4086 (ii) held by the stockholders of the association captive insurance company or industrial
4087 insured captive insurance company;
4088 (b) incorporated as a mutual insurer without capital stock, with a governing body
4089 elected by the member organizations of the association captive insurance company or industrial
4090 insured captive insurance company; or
4091 [
4092 (c) organized as a limited liability company with the capital of the association captive
4093 insurance company or industrial insured captive insurance company:
4094 (i) divided into interests; and
4095 (ii) held by the members of the association captive insurance company or industrial
4096 insured captive insurance company.
4097 (4) A captive insurance company formed as a corporation may not have fewer than
4098 three incorporators of whom one shall be a resident of this state.
4099 (5) A captive insurance company formed as a limited liability company may not have
4100 fewer than three organizers of whom one shall be a resident of this state.
4101 (6) (a) Before a captive insurance company formed as a corporation files the
4102 corporation's articles of incorporation with the Division of Corporations and Commercial
4103 Code, the incorporators shall obtain from the commissioner a certificate finding that the
4104 establishment and maintenance of the proposed corporation will promote the general good of
4105 the state.
4106 (b) In considering a request for a certificate under Subsection (6)(a), the commissioner
4107 shall consider:
4108 (i) the character, reputation, financial standing, and purposes of the incorporators;
4109 (ii) the character, reputation, financial responsibility, insurance experience, and
4110 business qualifications of the officers and directors;
4111 (iii) any information in:
4112 (A) the application for a certificate of authority; or
4113 (B) the department's files; and
4114 (iv) other aspects that the commissioner considers advisable.
4115 (7) (a) Before a captive insurance company formed as a limited liability company files
4116 the limited liability company's certificate of organization with the Division of Corporations and
4117 Commercial Code, the limited liability company shall obtain from the commissioner a
4118 certificate finding that the establishment and maintenance of the proposed limited liability
4119 company will promote the general good of the state.
4120 (b) In considering a request for a certificate under Subsection (7)(a), the commissioner
4121 shall consider:
4122 (i) the character, reputation, financial standing, and purposes of the organizers;
4123 (ii) the character, reputation, financial responsibility, insurance experience, and
4124 business qualifications of the managers;
4125 (iii) any information in:
4126 (A) the application for a certificate of authority; or
4127 (B) the department's files; and
4128 (iv) other aspects that the commissioner considers advisable.
4129 (8) (a) A captive insurance company formed as a corporation shall file with the
4130 Division of Corporations and Commercial Code:
4131 (i) the captive insurance company's articles of incorporation;
4132 (ii) the certificate issued pursuant to Subsection (6); and
4133 (iii) the fees required by the Division of Corporations and Commercial Code.
4134 (b) The Division of Corporations and Commercial Code shall file both the articles of
4135 incorporation and the certificate described in Subsection (6) for a captive insurance company
4136 that complies with this section.
4137 (9) (a) A captive insurance company formed as a limited liability company shall file
4138 with the Division of Corporations and Commercial Code:
4139 (i) the captive insurance company's certificate of organization;
4140 (ii) the certificate issued pursuant to Subsection (7); and
4141 (iii) the fees required by the Division of Corporations and Commercial Code.
4142 (b) The Division of Corporations and Commercial Code shall file both the certificate
4143 of organization and the certificate described in Subsection (7) for a captive insurance company
4144 that complies with this section.
4145 (10) (a) The organizers of a captive insurance company formed as a reciprocal insurer
4146 shall obtain from the commissioner a certificate finding that the establishment and maintenance
4147 of the proposed association will promote the general good of the state.
4148 (b) In considering a request for a certificate under Subsection (10)(a), the
4149 commissioner shall consider:
4150 (i) the character, reputation, financial standing, and purposes of the incorporators;
4151 (ii) the character, reputation, financial responsibility, insurance experience, and
4152 business qualifications of the officers and directors;
4153 (iii) any information in:
4154 (A) the application for a certificate of authority; or
4155 (B) the department's files; and
4156 (iv) other aspects that the commissioner considers advisable.
4157 (11) (a) An alien captive insurance company that has received a certificate of authority
4158 to act as a branch captive insurance company shall obtain from the commissioner a certificate
4159 finding that:
4160 (i) the home [
4161 statutory or regulatory standards in a form acceptable to the commissioner on companies
4162 transacting the business of insurance in that state; and
4163 (ii) after considering the character, reputation, financial responsibility, insurance
4164 experience, and business qualifications of the officers and directors of the alien captive
4165 insurance company, and other relevant information, the establishment and maintenance of the
4166 branch operations will promote the general good of the state.
4167 (b) After the commissioner issues a certificate under Subsection (11)(a) to an alien
4168 captive insurance company, the alien captive insurance company may register to do business in
4169 this state.
4170 (12) At least one of the members of the board of directors of a captive insurance
4171 company formed as a corporation shall be a resident of this state.
4172 (13) At least one of the managers of a limited liability company shall be a resident of
4173 this state.
4174 [
4175
4176 [
4177 has the privileges and is subject to the provisions of the general corporation law as well as the
4178 applicable provisions contained in this chapter.
4179 (b) If a conflict exists between a provision of the general corporation law and a
4180 provision of this chapter, this chapter shall control.
4181 (c) Except as provided in Subsection [
4182 pertaining to a merger, consolidation, conversion, mutualization, and redomestication apply in
4183 determining the procedures to be followed by a captive insurance company in carrying out any
4184 of the transactions described in those provisions.
4185 (d) Notwithstanding Subsection [
4186 the requirements for public notice and hearing in accordance with rules adopted under Section
4187 31A-37-106.
4188 (e) If a notice of public hearing is required, but no one requests a hearing, the
4189 commissioner may cancel the public hearing.
4190 [
4191 under this chapter has the privileges and is subject to [
4192
4193 Liability Company Act[
4194 applicable provisions in this chapter.
4195 (b) If a conflict exists between a provision of the limited liability company law and a
4196 provision of this chapter, this chapter controls.
4197 (c) The provisions of this title pertaining to a merger, consolidation, conversion,
4198 mutualization, and redomestication apply in determining the procedures to be followed by a
4199 captive insurance company in carrying out any of the transactions described in those
4200 provisions.
4201 (d) Notwithstanding Subsection [
4202 the requirements for public notice and hearing in accordance with rules adopted under Section
4203 31A-37-106.
4204 (e) If a notice of public hearing is required, but no one requests a hearing, the
4205 commissioner may cancel the public hearing.
4206 [
4207
4208
4209 [
4210
4211 [
4212
4213
4214
4215 [
4216
4217
4218 [
4219 formed as a corporation may not authorize a quorum of a board of directors to consist of fewer
4220 than one-third of the fixed or prescribed number of directors as provided in Section
4221 16-10a-824.
4222 (b) The certificate of organization of a captive insurance company formed as a limited
4223 liability company may not authorize a quorum of a board of managers to consist of fewer than
4224 one-third of the fixed or prescribed number of directors required in Section 16-10a-824.
4225 Section 60. Section 31A-37-303 is amended to read:
4226 31A-37-303. Reinsurance.
4227 (1) A captive insurance company may cede risks to any insurance company approved
4228 by the commissioner. A captive insurance company may provide reinsurance, as authorized in
4229 this title, on risks ceded for the benefit of a parent, affiliate, or controlled unaffiliated business.
4230 (2) (a) A captive insurance company may take credit for reserves on risks or portions of
4231 risks ceded to reinsurers if the captive insurance company complies with Section 31A-17-404,
4232 31A-17-404.1, 31A-17-404.3, or 31A-17-404.4 or if the captive insurance company complies
4233 with other requirements as the commissioner may establish by rule made in accordance with
4234 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
4235 (b) Unless the reinsurer is in compliance with Section 31A-17-404, 31A-17-404.1,
4236 31A-17-404.3, or 31A-17-404.4 or a rule adopted under Subsection (2)(a), a captive insurance
4237 company may not take credit for:
4238 (i) reserves on risks ceded to a reinsurer; or
4239 (ii) portions of risks ceded to a reinsurer.
4240 Section 61. Section 31A-37-305 is amended to read:
4241 31A-37-305. Contributions to guaranty or insolvency fund prohibited.
4242 (1) A captive insurance company[
4243
4244 following in this state:
4245 (a) a plan;
4246 (b) a pool;
4247 (c) an association;
4248 (d) a guaranty fund; or
4249 (e) an insolvency fund.
4250 (2) A captive insurance company, the insured of a captive insurance company, the
4251 parent of a captive insurance company, an affiliate of a captive insurance company, or a
4252 member organization of an association captive insurance company[
4253
4254
4255 (a) a plan;
4256 (b) a pool;
4257 (c) an association;
4258 (d) a guaranty fund for claims arising out of the operations of the captive insurance
4259 company; or
4260 (e) an insolvency fund for claims arising out of the operations of the captive insurance
4261 company.
4262 Section 62. Section 31A-42-201 is amended to read:
4263 31A-42-201. Creation of risk adjuster mechanism -- Board of directors --
4264 Appointment -- Terms -- Quorum -- Plan preparation.
4265 (1) There is created the "Utah Defined Contribution Risk Adjuster," a nonprofit entity
4266 within the department.
4267 (2) (a) The risk adjuster is under the direction of a board of directors composed of up to
4268 nine members described in Subsection (2)(b).
4269 (b) The board of directors shall consist of:
4270 (i) the following directors appointed by the governor with the consent of the Senate:
4271 (A) at least [
4272 represent insurers[
4273 contribution arrangement market in the state; [
4274 [
4275
4276 (B) one director who represents either an individual employee or employer; and
4277 (C) one director who represents the Office of Consumer Health Services within the
4278 Governor's Office of Economic Development;
4279 (ii) one director representing the Public Employees' Benefit and Insurance Program
4280 with actuarial experience, appointed by the director of the Public Employees' Benefit and
4281 Insurance Program; and
4282 (iii) the commissioner, or a representative of the commissioner who:
4283 (A) is appointed by the commissioner; and
4284 (B) has actuarial experience.
4285 (c) The commissioner, or a representative appointed by the commissioner may vote
4286 only in the event of a tie vote.
4287 (3) (a) Except as required by Subsection (3)(b), as terms of current board members
4288 appointed by the governor expire, the governor shall appoint each new member or reappointed
4289 member to a four-year term.
4290 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
4291 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
4292 board members are staggered so that approximately half of the board is appointed every two
4293 years.
4294 (c) Notwithstanding the requirements of Subsection (3)(a), a board member shall
4295 continue to serve until the board member is reappointed or replaced by another individual in
4296 accordance with this section.
4297 (4) When a vacancy occurs in the membership for any reason, the replacement shall be
4298 appointed for the unexpired term in the same manner as the original appointment was made.
4299 (5) (a) A board member who is not a government employee may not receive
4300 compensation or benefits for the board member's services.
4301 (b) A state government member who is a board member because of the board member's
4302 state government position may not receive per diem or expenses for the member's service.
4303 (6) The board shall elect annually a chair and vice chair from its membership.
4304 (7) A majority of the board members is a quorum for the transaction of business.
4305 (8) The action of a majority of the members of the quorum is the action of the board.
4306 Section 63. Section 31A-44-603 is amended to read:
4307 31A-44-603. Examinations.
4308 (1) The department may conduct periodic on-site examinations of a provider.
4309 (2) In conducting an examination, the department or the department's staff:
4310 (a) shall have full and free access to all the provider's records; and
4311 (b) may summon and qualify as a witness, under oath, and examine, any director,
4312 officer, member, agent, or employee of the provider, and any other person, concerning the
4313 condition and affairs of the provider or a facility.
4314 (3) Books and records shall be kept for not less than three calendar years in addition to
4315 the current calendar year.
4316 [
4317 section.
4318 [
4319 examination performed by a representative of an agency of another state.
4320 [
4321 examination report of an agency of another state that has regulatory oversight of the provider,
4322 or a report prepared by an independent accounting firm.
4323 (b) A report accepted under Subsection [
4324 official report of the department.
4325 [
4326 an unlicensed person to determine whether a violation of this chapter has occurred.
4327 Section 64. Section 53-2a-1102 is amended to read:
4328 53-2a-1102. Search and Rescue Financial Assistance Program -- Uses --
4329 Rulemaking -- Distribution.
4330 (1) (a) "Assistance card program" means the Utah Search and Rescue Assistance Card
4331 Program created within this section.
4332 (b) "Card" means the Search and Rescue Assistance Card issued under this section to a
4333 participant.
4334 (c) "Participant" means an individual, family, or group who is registered pursuant to
4335 this section as having a valid card at the time search, rescue, or both are provided.
4336 (d) "Program" means the Search and Rescue Financial Assistance Program created
4337 within this section.
4338 (e) (i) "Reimbursable expenses," as used in this section, means those reasonable
4339 expenses incidental to search and rescue activities.
4340 (ii) "Reimbursable expenses" include:
4341 (A) rental for fixed wing aircraft, helicopters, snowmobiles, boats, and generators;
4342 (B) replacement and upgrade of search and rescue equipment;
4343 (C) training of search and rescue volunteers;
4344 (D) costs of providing workers' compensation benefits for volunteer search and rescue
4345 team members under Section 67-20-7.5; and
4346 (E) any other equipment or expenses necessary or appropriate for conducting search
4347 and rescue activities.
4348 (iii) "Reimbursable expenses" do not include any salary or overtime paid to any person
4349 on a regular or permanent payroll, including permanent part-time employees of any agency of
4350 the state.
4351 (f) "Rescue" means search services, rescue services, or both search and rescue services.
4352 (2) There is created the Search and Rescue Financial Assistance Program within the
4353 division.
4354 (3) (a) The program shall be funded from the following revenue sources:
4355 (i) any voluntary contributions to the state received for search and rescue operations;
4356 (ii) money received by the state under Subsection (11) and under Sections 23-19-42,
4357 41-22-34, and 73-18-24; and
4358 (iii) appropriations made to the program by the Legislature.
4359 (b) All money received from the revenue sources in Subsections (3)(a)(i) and (ii) shall
4360 be deposited into the General Fund as a dedicated credit to be used solely for the purposes
4361 under this section.
4362 (c) All funding for the program is nonlapsing.
4363 (4) The director shall use the money to reimburse counties for all or a portion of each
4364 county's reimbursable expenses for search and rescue operations, subject to:
4365 (a) the approval of the Search and Rescue Advisory Board as provided in Section
4366 53-2a-1104;
4367 (b) money available in the program; and
4368 (c) rules made under Subsection (7).
4369 (5) Program money may not be used to reimburse for any paid personnel costs or paid
4370 man hours spent in emergency response and search and rescue related activities.
4371 (6) The Legislature finds that these funds are for a general and statewide public
4372 purpose.
4373 (7) The division, with the approval of the Search and Rescue Advisory Board, shall
4374 make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
4375 consistent with this section:
4376 (a) specifying the costs that qualify as reimbursable expenses;
4377 (b) defining the procedures of counties to submit expenses and be reimbursed;
4378 (c) defining a participant in the assistance card program, including:
4379 (i) individuals; and
4380 (ii) families and organized groups who qualify as participants;
4381 (d) defining the procedure for issuing a card to a participant;
4382 (e) defining excluded expenses that may not be reimbursed under the program,
4383 including medical expenses;
4384 (f) establishing the card renewal cycle for the Utah Search and Rescue Assistance Card
4385 Program;
4386 (g) establishing the frequency of review of the fee schedule;
4387 (h) providing for the administration of the program; and
4388 (i) providing a formula to govern the distribution of available money among the
4389 counties for uncompensated search and rescue expenses based on:
4390 (i) the total qualifying expenses submitted;
4391 (ii) the number of search and rescue incidents per county population;
4392 (iii) the number of victims that reside outside the county; and
4393 (iv) the number of volunteer hours spent in each county in emergency response and
4394 search and rescue related activities per county population.
4395 (8) (a) The division shall, in consultation with the Outdoor Recreation Office, establish
4396 the fee schedule of the Search and Rescue Assistance Card under Subsection 63J-1-504(6).
4397 (b) The division shall provide a discount of not less than 10% of the card fee under
4398 Subsection (8)(a) to a person who has paid a fee under Section 23-19-42, 41-22-34, or
4399 73-18-24 during the same calendar year in which the person applies to be a participant in the
4400 assistance card program.
4401 (9) (a) Counties may bill reimbursable expenses to an individual for costs incurred for
4402 the rescue of an individual, if the individual is not a participant in the Utah Search and Rescue
4403 Assistance Card Program.
4404 (b) Counties may bill a participant for reimbursable expenses for costs incurred for the
4405 rescue of the participant if the participant is found by the rescuing county to have acted
4406 recklessly or to have intentionally created a situation resulting in the need for a county to
4407 provide rescue service for the participant.
4408 (10) (a) There is created the Utah Search and Rescue Assistance Card Program. The
4409 program is located within the division.
4410 (b) The program may not be utilized to cover any expenses, such as medically related
4411 expenses, that are not reimbursable expenses related to the rescue.
4412 (11) (a) To participate in the program, a person shall purchase a Search and Rescue
4413 Assistance Card from the division by paying the fee as determined by the division in
4414 Subsection (8).
4415 (b) The money generated by the fees shall be deposited into the General Fund as a
4416 dedicated credit for the Search and Rescue Financial Assistance Program created in this
4417 section.
4418 (c) Participation and payment of fees by a person under Sections 23-19-42, 41-22-34,
4419 and 73-18-24 do not constitute purchase of a card under this section.
4420 (12) The division shall consult with the Outdoor Recreation Office regarding:
4421 (a) administration of the assistance card program; and
4422 (b) outreach and marketing strategies.
4423 (13) Pursuant to Subsection 31A-1-103(7), the Utah Search and Rescue Assistance
4424 Card Program under this section is exempt from being considered [
4425
4426 Section 65. Section 59-7-102 is amended to read:
4427 59-7-102. Exemptions.
4428 (1) Except as provided in this section, the following are exempt from a tax under this
4429 chapter:
4430 (a) an organization exempt under Section 501, Internal Revenue Code;
4431 (b) an organization exempt under Section 528, Internal Revenue Code;
4432 (c) an insurance company that is subject to taxation on the insurance company's
4433 premiums under Chapter 9, Taxation of Admitted Insurers, regardless of whether the insurance
4434 company has a tax liability under that chapter;
4435 (d) a local building authority as defined in Section 17D-2-102;
4436 (e) a farmers' cooperative; [
4437 (f) a public agency, as defined in Section 11-13-103, with respect to or as a result of an
4438 ownership interest in:
4439 (i) a project, as defined in Section 11-13-103; or
4440 (ii) facilities providing additional project capacity, as defined in Section 11-13-103[
4441 (g) an insurance company that engages in a transaction that is subject to taxation under
4442 Section 31A-3-301 or 31A-3-302, regardless of whether the insurance company has a tax
4443 liability under that section; or
4444 (h) a captive insurance company that pays a fee under Section 31A-3-304.
4445 (2) A corporation is exempt from a tax under this chapter:
4446 (a) if the corporation is an out-of-state business as defined in Section 53-2a-1202; and
4447 (b) for income earned:
4448 (i) during a disaster period as defined in Section 53-2a-1202; and
4449 (ii) for the purpose of responding to a declared state disaster or emergency as defined
4450 in Section 53-2a-1202.
4451 (3) Notwithstanding any other provision in this chapter or Chapter 8, Gross Receipts
4452 Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, a
4453 person not otherwise subject to the tax imposed by this chapter or Chapter 8, Gross Receipts
4454 Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, is
4455 not subject to a tax imposed by Section 59-7-104, 59-7-201, 59-7-701, or 59-8-104, because of:
4456 (a) that person's ownership of tangible personal property located at the premises of a
4457 printer's facility in this state with which the person has contracted for printing; or
4458 (b) the activities of the person's employees or agents who are:
4459 (i) located solely at the premises of a printer's facility; and
4460 (ii) performing services:
4461 (A) related to:
4462 (I) quality control;
4463 (II) distribution; or
4464 (III) printing services; and
4465 (B) performed by the printer's facility in this state with which the person has contracted
4466 for printing.
4467 (4) Notwithstanding Subsection (1), an organization, company, authority, farmers'
4468 cooperative, or public agency exempt from this chapter under Subsection (1) is subject to Part
4469 8, Unrelated Business Income, to the extent provided in Part 8, Unrelated Business Income.
4470 (5) Notwithstanding Subsection (1)(b), to the extent the income of an organization
4471 described in Subsection (1)(b) is taxable for federal tax purposes under Section 528, Internal
4472 Revenue Code, the organization's income is also taxable under this chapter.
4473 Section 66. Section 59-9-101 is amended to read:
4474 59-9-101. Tax basis -- Rates -- Exemptions -- Rate reductions.
4475 (1) (a) Except as provided in Subsection (1)(b), (1)(d), or (5), an admitted insurer shall
4476 pay to the commission on or before March 31 in each year, a tax of 2-1/4% of the total
4477 premiums received by it during the preceding calendar year from insurance covering property
4478 or risks located in this state.
4479 (b) This Subsection (1) does not apply to:
4480 (i) workers' compensation insurance, assessed under Subsection (2);
4481 (ii) title insurance premiums taxed under Subsection (3);
4482 (iii) annuity considerations;
4483 (iv) insurance premiums paid by an institution within the state system of higher
4484 education as specified in Section 53B-1-102; and
4485 (v) ocean marine insurance.
4486 (c) The taxable premium under this Subsection (1) shall be reduced by:
4487 (i) the premiums returned or credited to policyholders on direct business subject to tax
4488 in this state;
4489 (ii) the premiums received for reinsurance of property or risks located in this state; and
4490 (iii) the dividends, including premium reduction benefits maturing within the year:
4491 (A) paid or credited to policyholders in this state; or
4492 (B) applied in abatement or reduction of premiums due during the preceding calendar
4493 year.
4494 (d) (i) For purposes of this Subsection (1)(d):
4495 (A) "Utah variable life insurance premium" means an insurance premium paid:
4496 (I) by:
4497 (Aa) a corporation; or
4498 (Bb) a trust established or funded by a corporation; and
4499 (II) for variable life insurance covering risks located within the state.
4500 (B) "Variable life insurance" means an insurance policy that provides for life
4501 insurance, the amount or duration of which varies according to the investment experience of
4502 one or more separate accounts that are established and maintained by the insurer pursuant to
4503 Title 31A, Insurance Code.
4504 (ii) Notwithstanding Subsection (1)(a), beginning on January 1, 2006, the tax on that
4505 portion of the total premiums subject to a tax under Subsection (1)(a) that is a Utah variable
4506 life insurance premium shall be calculated as follows:
4507 (A) 2-1/4% of the first $100,000 of Utah variable life insurance premiums:
4508 (I) paid for each variable life insurance policy; and
4509 (II) received by the admitted insurer in the preceding calendar year; and
4510 (B) 0.08% of the Utah variable life insurance premiums that exceed $100,000:
4511 (I) paid for the policy described in Subsection (1)(d)(ii)(A); and
4512 (II) received by the admitted insurer in the preceding calendar year.
4513 (2) (a) An admitted insurer writing workers' compensation insurance in this state,
4514 including the Workers' Compensation Fund created under Title 31A, Chapter 33, Workers'
4515 Compensation Fund, shall pay to the tax commission, on or before March 31 in each year, a
4516 premium assessment on the basis of the total workers' compensation premium income received
4517 by the insurer from workers' compensation insurance in this state during the preceding calendar
4518 year as follows:
4519 (i) on or before December 31, 2010, an amount of equal to or greater than 1%, but
4520 equal to or less than 5.75% of the total workers' compensation premium income described in
4521 this Subsection (2);
4522 (ii) on and after January 1, 2011, but on or before December 31, 2017, an amount of
4523 equal to or greater than 1%, but equal to or less than 4.25% of the total workers' compensation
4524 premium income described in this Subsection (2); and
4525 (iii) on and after January 1, 2018, an amount equal to 1.25% of the total workers'
4526 compensation premium income described in this Subsection (2).
4527 (b) Total workers' compensation premium income means the net written premium as
4528 calculated before any premium reduction for any insured employer's deductible, retention, or
4529 reimbursement amounts and also those amounts equivalent to premiums as provided in Section
4530 34A-2-202.
4531 (c) The percentage of premium assessment applicable for a calendar year shall be
4532 determined by the Labor Commission under Subsection (2)(d). The total premium income
4533 shall be reduced in the same manner as provided in Subsections (1)(c)(i) and (1)(c)(ii), but not
4534 as provided in Subsection (1)(c)(iii). The commission shall promptly remit from the premium
4535 assessment collected under this Subsection (2):
4536 (i) income to the state treasurer for credit to the Employers' Reinsurance Fund created
4537 under Subsection 34A-2-702(1) as follows:
4538 (A) on or before December 31, 2009, an amount of up to 5% of the total workers'
4539 compensation premium income;
4540 (B) on and after January 1, 2010, but on or before December 31, 2010, an amount of up
4541 to 4.5% of the total workers' compensation premium income;
4542 (C) on and after January 1, 2011, but on or before December 31, 2017, an amount of up
4543 to 3% of the total workers' compensation premium income; and
4544 (D) on and after January 1, 2018, 0% of the total workers' compensation premium
4545 income;
4546 (ii) an amount equal to 0.25% of the total workers' compensation premium income to
4547 the state treasurer for credit to the Workplace Safety Account created by Section 34A-2-701;
4548 (iii) an amount of up to 0.5% and any remaining assessed percentage of the total
4549 workers' compensation premium income to the state treasurer for credit to the Uninsured
4550 Employers' Fund created under Section 34A-2-704; and
4551 (iv) beginning on January 1, 2010, 0.5% of the total workers' compensation premium
4552 income to the state treasurer for credit to the Industrial Accident Restricted Account created in
4553 Section 34A-2-705.
4554 (d) (i) The Labor Commission shall determine the amount of the premium assessment
4555 for each year on or before each October 15 of the preceding year. The Labor Commission shall
4556 make this determination following a public hearing. The determination shall be based upon the
4557 recommendations of a qualified actuary.
4558 (ii) The actuary shall recommend a premium assessment rate sufficient to provide
4559 payments of benefits and expenses from the Employers' Reinsurance Fund and to project a
4560 funded condition with assets greater than liabilities by no later than June 30, 2025.
4561 (iii) The actuary shall recommend a premium assessment rate sufficient to provide
4562 payments of benefits and expenses from the Uninsured Employers' Fund and to maintain it at a
4563 funded condition with assets equal to or greater than liabilities.
4564 (iv) At the end of each fiscal year the minimum approximate assets in the Employers'
4565 Reinsurance Fund shall be $5,000,000 which amount shall be adjusted each year beginning in
4566 1990 by multiplying by the ratio that the total workers' compensation premium income for the
4567 preceding calendar year bears to the total workers' compensation premium income for the
4568 calendar year 1988.
4569 (v) The requirements of Subsection (2)(d)(iv) cease when the future annual
4570 disbursements from the Employers' Reinsurance Fund are projected to be less than the
4571 calculations of the corresponding future minimum required assets. The Labor Commission
4572 shall, after a public hearing, determine if the future annual disbursements are less than the
4573 corresponding future minimum required assets from projections provided by the actuary.
4574 (vi) At the end of each fiscal year the minimum approximate assets in the Uninsured
4575 Employers' Fund shall be $2,000,000, which amount shall be adjusted each year beginning in
4576 1990 by multiplying by the ratio that the total workers' compensation premium income for the
4577 preceding calendar year bears to the total workers' compensation premium income for the
4578 calendar year 1988.
4579 (e) A premium assessment that is to be transferred into the General Fund may be
4580 collected on premiums received from Utah public agencies.
4581 (3) An admitted insurer writing title insurance in this state shall pay to the commission,
4582 on or before March 31 in each year, a tax of .45% of the total premium received by either the
4583 insurer or by its agents during the preceding calendar year from title insurance concerning
4584 property located in this state. In calculating this tax, "premium" includes the charges made to
4585 an insured under or to an applicant for a policy or contract of title insurance for:
4586 (a) the assumption by the title insurer of the risks assumed by the issuance of the policy
4587 or contract of title insurance; and
4588 (b) abstracting title, title searching, examining title, or determining the insurability of
4589 title, and every other activity, exclusive of escrow, settlement, or closing charges, whether
4590 denominated premium or otherwise, made by a title insurer, an agent of a title insurer, a title
4591 insurance producer, or any of them.
4592 (4) Beginning July 1, 1986, a former county mutual and a former mutual benefit
4593 association shall pay the premium tax or assessment due under this chapter. Premiums
4594 received after July 1, 1986, shall be considered in determining the tax or assessment.
4595 (5) The following insurers are not subject to the premium tax on health care insurance
4596 that would otherwise be applicable under Subsection (1):
4597 (a) an insurer licensed under Title 31A, Chapter 5, Domestic Stock and Mutual
4598 Insurance Corporations;
4599 (b) an insurer licensed under Title 31A, Chapter 7, Nonprofit Health Service Insurance
4600 Corporations;
4601 (c) an insurer licensed under Title 31A, Chapter 8, Health Maintenance Organizations
4602 and Limited Health Plans;
4603 (d) an insurer licensed under Title 31A, Chapter 9, Insurance Fraternals;
4604 (e) an insurer licensed under Title 31A, Chapter 11, Motor Clubs;
4605 (f) an insurer licensed under Title 31A, Chapter 13, Employee Welfare Funds and
4606 Plans; and
4607 (g) an insurer licensed under Title 31A, Chapter 14, Foreign Insurers.
4608 (6) A captive insurer, as provided in Section 31A-3-304, that pays a fee imposed under
4609 Section 31A-3-304 is not subject to the premium tax under this section.
4610 [
4611 the premiums among the policies for purposes of reducing the aggregate premium tax or
4612 assessment applicable to the policies.
4613 [
4614 and Taxes, apply to the tax or assessment imposed under this chapter.
4615 Section 67. Section 63G-2-302 is amended to read:
4616 63G-2-302. Private records.
4617 (1) The following records are private:
4618 (a) records concerning an individual's eligibility for unemployment insurance benefits,
4619 social services, welfare benefits, or the determination of benefit levels;
4620 (b) records containing data on individuals describing medical history, diagnosis,
4621 condition, treatment, evaluation, or similar medical data;
4622 (c) records of publicly funded libraries that when examined alone or with other records
4623 identify a patron;
4624 (d) records received by or generated by or for:
4625 (i) the Independent Legislative Ethics Commission, except for:
4626 (A) the commission's summary data report that is required under legislative rule; and
4627 (B) any other document that is classified as public under legislative rule; or
4628 (ii) a Senate or House Ethics Committee in relation to the review of ethics complaints,
4629 unless the record is classified as public under legislative rule;
4630 (e) records received by, or generated by or for, the Independent Executive Branch
4631 Ethics Commission, except as otherwise expressly provided in Title 63A, Chapter 14, Review
4632 of Executive Branch Ethics Complaints;
4633 (f) records received or generated for a Senate confirmation committee concerning
4634 character, professional competence, or physical or mental health of an individual:
4635 (i) if, prior to the meeting, the chair of the committee determines release of the records:
4636 (A) reasonably could be expected to interfere with the investigation undertaken by the
4637 committee; or
4638 (B) would create a danger of depriving a person of a right to a fair proceeding or
4639 impartial hearing; and
4640 (ii) after the meeting, if the meeting was closed to the public;
4641 (g) employment records concerning a current or former employee of, or applicant for
4642 employment with, a governmental entity that would disclose that individual's home address,
4643 home telephone number, social security number, insurance coverage, marital status, or payroll
4644 deductions;
4645 (h) records or parts of records under Section 63G-2-303 that a current or former
4646 employee identifies as private according to the requirements of that section;
4647 (i) that part of a record indicating a person's social security number or federal employer
4648 identification number if provided under Section 31A-23a-104, 31A-25-202, 31A-26-202,
4649 58-1-301, 58-55-302, 61-1-4, or 61-2f-203;
4650 (j) that part of a voter registration record identifying a voter's:
4651 (i) driver license or identification card number;
4652 (ii) Social Security number, or last four digits of the Social Security number;
4653 (iii) email address; or
4654 (iv) date of birth;
4655 (k) a voter registration record that is classified as a private record by the lieutenant
4656 governor or a county clerk under Subsection 20A-2-104(4)(f) or 20A-2-101.1(5)(a);
4657 (l) a record that:
4658 (i) contains information about an individual;
4659 (ii) is voluntarily provided by the individual; and
4660 (iii) goes into an electronic database that:
4661 (A) is designated by and administered under the authority of the Chief Information
4662 Officer; and
4663 (B) acts as a repository of information about the individual that can be electronically
4664 retrieved and used to facilitate the individual's online interaction with a state agency;
4665 (m) information provided to the Commissioner of Insurance under:
4666 (i) Subsection 31A-23a-115[
4667 (ii) Subsection 31A-23a-302[
4668 (iii) Subsection 31A-26-210[
4669 (n) information obtained through a criminal background check under Title 11, Chapter
4670 40, Criminal Background Checks by Political Subdivisions Operating Water Systems;
4671 (o) information provided by an offender that is:
4672 (i) required by the registration requirements of Title 77, Chapter 41, Sex and Kidnap
4673 Offender Registry; and
4674 (ii) not required to be made available to the public under Subsection 77-41-110(4);
4675 (p) a statement and any supporting documentation filed with the attorney general in
4676 accordance with Section 34-45-107, if the federal law or action supporting the filing involves
4677 homeland security;
4678 (q) electronic toll collection customer account information received or collected under
4679 Section 72-6-118 and customer information described in Section 17B-2a-815 received or
4680 collected by a public transit district, including contact and payment information and customer
4681 travel data;
4682 (r) an email address provided by a military or overseas voter under Section
4683 20A-16-501;
4684 (s) a completed military-overseas ballot that is electronically transmitted under Title
4685 20A, Chapter 16, Uniform Military and Overseas Voters Act;
4686 (t) records received by or generated by or for the Political Subdivisions Ethics Review
4687 Commission established in Section 11-49-201, except for:
4688 (i) the commission's summary data report that is required in Section 11-49-202; and
4689 (ii) any other document that is classified as public in accordance with Title 11, Chapter
4690 49, Political Subdivisions Ethics Review Commission;
4691 (u) a record described in Subsection 53A-11a-203(3) that verifies that a parent was
4692 notified of an incident or threat; and
4693 (v) a criminal background check or credit history report conducted in accordance with
4694 Section 63A-3-201.
4695 (2) The following records are private if properly classified by a governmental entity:
4696 (a) records concerning a current or former employee of, or applicant for employment
4697 with a governmental entity, including performance evaluations and personal status information
4698 such as race, religion, or disabilities, but not including records that are public under Subsection
4699 63G-2-301(2)(b) or 63G-2-301(3)(o) or private under Subsection (1)(b);
4700 (b) records describing an individual's finances, except that the following are public:
4701 (i) records described in Subsection 63G-2-301(2);
4702 (ii) information provided to the governmental entity for the purpose of complying with
4703 a financial assurance requirement; or
4704 (iii) records that must be disclosed in accordance with another statute;
4705 (c) records of independent state agencies if the disclosure of those records would
4706 conflict with the fiduciary obligations of the agency;
4707 (d) other records containing data on individuals the disclosure of which constitutes a
4708 clearly unwarranted invasion of personal privacy;
4709 (e) records provided by the United States or by a government entity outside the state
4710 that are given with the requirement that the records be managed as private records, if the
4711 providing entity states in writing that the record would not be subject to public disclosure if
4712 retained by it;
4713 (f) any portion of a record in the custody of the Division of Aging and Adult Services,
4714 created in Section 62A-3-102, that may disclose, or lead to the discovery of, the identity of a
4715 person who made a report of alleged abuse, neglect, or exploitation of a vulnerable adult; and
4716 (g) audio and video recordings created by a body-worn camera, as defined in Section
4717 77-7a-103, that record sound or images inside a home or residence except for recordings that:
4718 (i) depict the commission of an alleged crime;
4719 (ii) record any encounter between a law enforcement officer and a person that results in
4720 death or bodily injury, or includes an instance when an officer fires a weapon;
4721 (iii) record any encounter that is the subject of a complaint or a legal proceeding
4722 against a law enforcement officer or law enforcement agency;
4723 (iv) contain an officer involved critical incident as defined in Section 76-2-408(1)(d);
4724 or
4725 (v) have been requested for reclassification as a public record by a subject or
4726 authorized agent of a subject featured in the recording.
4727 (3) (a) As used in this Subsection (3), "medical records" means medical reports,
4728 records, statements, history, diagnosis, condition, treatment, and evaluation.
4729 (b) Medical records in the possession of the University of Utah Hospital, its clinics,
4730 doctors, or affiliated entities are not private records or controlled records under Section
4731 63G-2-304 when the records are sought:
4732 (i) in connection with any legal or administrative proceeding in which the patient's
4733 physical, mental, or emotional condition is an element of any claim or defense; or
4734 (ii) after a patient's death, in any legal or administrative proceeding in which any party
4735 relies upon the condition as an element of the claim or defense.
4736 (c) Medical records are subject to production in a legal or administrative proceeding
4737 according to state or federal statutes or rules of procedure and evidence as if the medical
4738 records were in the possession of a nongovernmental medical care provider.
4739 Section 68. Repealer.
4740 This bill repeals:
4741 Section 31A-22-715, Alcohol and drug dependency treatment.
4742 Section 31A-22-718, Dependent coverage.
4742a Ĥ→ Section 31A-34-101, Title.
4742b Section 31A-34-102, Purpose and intent -- Legislative findings.
4742c Section 31A-34-103, Definitions.
4742d Section 31A-34-104, Alliance -- Required license.
4742e Section 31A-34-105, Association requirements.
4742f Section 31A-34-106, Jurisdiction of the commissioner.
4742g Section 31A-34-107, Directors, trustees, and officers.
4742h Section 31A-34-108, Powers of and restrictions on alliances.
4742i Section 31A-34-109, Operation of alliances.
4742j Section 31A-34-110, Contracts with member employers and contracted insurers.
4742k Section 31A-34-111, Alliance evaluation. ←Ĥ
4743 Section 31A-37-306, Conversion or merger.
4744 Section 69. Retrospective operation.
4745 (1) The amendments in this bill to Section 31A-3-102 and Section 59-7-102 have
4746 retrospective operation for a taxable year beginning on or after January 1, 2017 Ŝ→ [
4747 amendments to Subsections 31A-3-102(2)(b) and 59-7-102(1)(g) have retrospective operation
4748 for a taxable year beginning on or after January 1, 2011
4749 (2) The amendments in this bill to Section 59-9-101 have retrospective operation to
4750 January 1, 2017.