This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Fri, Mar 2, 2018 at 5:01 PM by lpoole.
Senator Curtis S. Bramble proposes the following substitute bill:


1     
INSURANCE MODIFICATIONS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: James A. Dunnigan

5     
Senate Sponsor: Curtis S. Bramble

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to insurance.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms and modifies defined terms;
13          ▸     adds provisions that a warrantor is required to disclose in a vehicle protection
14     product warranty;
15          ▸     repeals the requirement that the fixed amount of reimbursement under a vehicle
16     protection product warranty is uniform for all warranty holders of the same vehicle
17     protection product warranty;
18          ▸     addresses the requirements for filing a binder for a health benefit plan or dental
19     policy with the commissioner;
20          ▸     modifies the date on which the commissioner presents an annual evaluation of the
21     state's health insurance market;
22          ▸     classifies certain records related to an examination as protected records;
23          ▸     modifies the membership of the Title and Escrow Commission;
24          ▸     modifies provisions related to the Captive Insurance Restricted Account;
25          ▸     enacts and consolidates provisions related to an offer of qualified health insurance

26     coverage that certain contractors and subcontractors are required to obtain and maintain;
27          ▸     amends the threshold at which certain contractors and subcontractors become
28     subject to certain health care-related requirements;
29          ▸     modifies the process by which the commissioner determines an applicant's ability to
30     provide proposed health care services under Title 31A, Chapter 8, Health
31     Maintenance Organizations and Limited Health Plans;
32          ▸     modifies the requirements for a nonadmitted insurer to be listed on the
33     commissioner's "reliable" list;
34          ▸     provides the circumstances under which the commissioner must hold a hearing on a
35     merger or other acquisition of an insurer;
36          ▸     amends the deadline for holding a hearing on a merger or other acquisition of an
37     insurer;
38          ▸     allows an insurer to terminate coverage of a spouse of an insured under an accident
39     and health insurance policy in the event of legal separation;
40          ▸     prohibits an insured from charging any additional amount for electing to extend
41     group coverage;
42          ▸     addresses the timing of open enrollment for individuals who extend or are eligible
43     to extend group coverage;
44          ▸     addresses the commissioner's authority to take action against a person who has had
45     an insurance license or other professional or occupational license denied,
46     suspended, revoked, or surrendered to resolve an administrative action;
47          ▸     addresses the circumstances under which an individual title insurance producer or
48     agency title insurance producer may do escrow involving real property transactions;
49          ▸     provides that the commissioner may take action against a licensee if the
50     commissioner finds that the licensee is convicted of a misdemeanor involving fraud,
51     misrepresentation, theft, or dishonesty;
52          ▸     modifies the training and continuing education requirements for certain licensees;
53          ▸     amends provisions related to the effect of an insurer's insolvency;
54          ▸     clarifies the process by which the state designates the essential health benefits for
55     the state;
56          ▸     repeals certain sections of the Insurance Code;

57          ▸     modifies the workers' compensation advisory council's reporting requirements;
58          ▸     authorizes the Labor Commission to use funds from the Industrial Accident
59     Restricted Account for specific purposes; and
60          ▸     makes technical and conforming changes.
61     Money Appropriated in this Bill:
62          None
63     Other Special Clauses:
64          None
65     Utah Code Sections Affected:
66     AMENDS:
67          17B-2a-818.5, as last amended by Laws of Utah 2016, Chapters 20 and 355
68          19-1-206, as last amended by Laws of Utah 2016, Chapters 20 and 355
69          26-18-402, as last amended by Laws of Utah 2013, Chapter 278
70          26-40-115, as last amended by Laws of Utah 2016, Chapter 20
71          31A-1-301, as last amended by Laws of Utah 2017, Chapter 292
72          31A-2-201.1, as last amended by Laws of Utah 2008, Chapter 382
73          31A-2-201.2, as last amended by Laws of Utah 2017, Chapter 292
74          31A-2-204, as last amended by Laws of Utah 2008, Chapter 382
75          31A-2-403, as last amended by Laws of Utah 2015, Chapter 330
76          31A-3-303, as last amended by Laws of Utah 2011, Chapters 62 and 275
77          31A-3-304, as last amended by Laws of Utah 2017, Chapter 168
78          31A-6a-101, as last amended by Laws of Utah 2017, Chapter 27
79          31A-6a-104, as last amended by Laws of Utah 2016, Chapter 138
80          31A-6a-105, as last amended by Laws of Utah 2015, Chapter 244
81          31A-8-104, as last amended by Laws of Utah 1997, Chapter 185
82          31A-8a-102, as last amended by Laws of Utah 2013, Chapters 104 and 135
83          31A-15-103, as last amended by Laws of Utah 2017, Chapter 363
84          31A-16-103, as last amended by Laws of Utah 2015, Chapter 244
85          31A-22-612, as last amended by Laws of Utah 2015, Chapter 244
86          31A-22-618.6, as last amended by Laws of Utah 2017, Chapter 168 and renumbered
87     and amended by Laws of Utah 2017, Chapter 292

88          31A-22-629, as last amended by Laws of Utah 2012, Chapter 253
89          31A-22-701, as last amended by Laws of Utah 2017, Chapter 168
90          31A-22-722, as last amended by Laws of Utah 2013, Chapter 319
91          31A-23a-107, as last amended by Laws of Utah 2012, Chapter 253
92          31A-23a-109, as last amended by Laws of Utah 2012, Chapter 253
93          31A-23a-111, as last amended by Laws of Utah 2017, Chapter 168
94          31A-23a-208, as enacted by Laws of Utah 2013, Chapter 341
95          31A-23a-406, as last amended by Laws of Utah 2013, Chapter 319
96          31A-23b-102, as last amended by Laws of Utah 2017, Chapter 168
97          31A-23b-202.5, as last amended by Laws of Utah 2017, Chapter 168
98          31A-23b-204, as enacted by Laws of Utah 2013, Chapter 341
99          31A-23b-205, as last amended by Laws of Utah 2014, Chapters 290, 300, 425 and last
100     amended by Coordination Clause, Laws of Utah 2014, Chapters 300, and 425
101          31A-23b-206, as last amended by Laws of Utah 2015, Chapter 244
102          31A-25-204, as enacted by Laws of Utah 1985, Chapter 242
103          31A-25-206, as last amended by Laws of Utah 2001, Chapter 116
104          31A-26-102, as last amended by Laws of Utah 2014, Chapters 290 and 300
105          31A-26-205, as last amended by Laws of Utah 1986, Chapter 204
106          31A-26-208, as last amended by Laws of Utah 2011, Chapter 284
107          31A-27a-111, as enacted by Laws of Utah 2007, Chapter 309
108          31A-27a-608, as enacted by Laws of Utah 2007, Chapter 309
109          31A-30-210, as enacted by Laws of Utah 2010, Chapter 229
110          31A-43-303, as last amended by Laws of Utah 2014, Chapters 290 and 300
111          34A-2-107, as last amended by Laws of Utah 2017, Chapters 18 and 363
112          34A-2-705, as last amended by Laws of Utah 2011, Chapter 328
113          63A-5-205, as last amended by Laws of Utah 2016, Chapters 20 and 355
114          63C-9-403, as last amended by Laws of Utah 2016, Chapters 20 and 355
115          63G-2-305, as last amended by Laws of Utah 2017, Chapters 374, 382, and 415
116          72-6-107.5, as last amended by Laws of Utah 2016, Chapters 20 and 355
117          79-2-404, as last amended by Laws of Utah 2016, Chapters 20 and 355
118     ENACTS:

119          31A-45-403, Utah Code Annotated 1953
120          63A-5-205.5, Utah Code Annotated 1953
121     REPEALS AND REENACTS:
122          31A-6a-111, as enacted by Laws of Utah 2015, Chapter 244
123     REPEALS:
124          31A-22-722.5, as last amended by Laws of Utah 2011, Chapters 297 and 340
125          31A-30-209, as last amended by Laws of Utah 2016, Chapter 138
126     

127     Be it enacted by the Legislature of the state of Utah:
128          Section 1. Section 17B-2a-818.5 is amended to read:
129          17B-2a-818.5. Contracting powers of public transit districts -- Health insurance
130     coverage.
131          (1) [For purposes of] As used in this section:
132          (a) "Aggregate" means the sum of all contracts, change orders, and modifications
133     related to a single project.
134          (b) "Change order" means the same as that term is defined in Section 63G-6a-103.
135          [(a)] (c) "Employee" means, as defined in Section 34A-2-104, an "employee,"
136     "worker," or "operative" [as defined in Section 34A-2-104] who:
137          (i) works at least 30 hours per calendar week; and
138          (ii) meets employer eligibility waiting requirements for health care insurance, which
139     may not exceed the first day of the calendar month following 60 days [from the date of hire]
140     after the day on which the individual is hired.
141          [(b)] (d) "Health benefit plan" means the same as that term is defined in Section
142     31A-1-301.
143          [(c)] (e) "Qualified health insurance coverage" means the same as that term is defined
144     in Section 26-40-115.
145          [(d)] (f) "Subcontractor" means the same as that term is defined in Section 63A-5-208.
146          [(2) (a) Except as provided in Subsection (3), this section applies to a design or
147     construction contract entered into by the public transit district on or after July 1, 2009, and to a
148     prime contractor or to a subcontractor in accordance with Subsection (2)(b).]
149          [(b) (i) A prime contractor is subject to this section if the prime contract is in the

150     amount of $2,000,000 or greater at the original execution of the contract.]
151          [(ii) A subcontractor is subject to this section if a subcontract is in the amount of
152     $1,000,000 or greater at the original execution of the contract.]
153          [(3) This section does not apply if:]
154          (2) Except as provided in Subsection (3), the requirements of this section apply to:
155          (a) a contractor of a design or construction contract entered into by the public transit
156     district on or after July 1, 2009, if the prime contract is in an aggregate amount equal to or
157     greater than $2,000,000; and
158          (b) a subcontractor of a contractor of a design or construction contract entered into by
159     the public transit district on or after July 1, 2009, if the subcontract is in an aggregate amount
160     equal to or greater than $1,000,000.
161          (3) The requirements of this section do not apply to a contractor or subcontractor
162     described in Subsection (2) if:
163          (a) the application of this section jeopardizes the receipt of federal funds;
164          (b) the contract is a sole source contract; or
165          (c) the contract is an emergency procurement.
166          [(4) (a) This section does not apply to a change order as defined in Section
167     63G-6a-103, or a modification to a contract, when the contract does not meet the initial
168     threshold required by Subsection (2).]
169          [(b)] (4) A person [who] that intentionally uses change orders [or], contract
170     modifications, or multiple contracts to circumvent the requirements of [Subsection (2)] this
171     section is guilty of an infraction.
172          (5) (a) A contractor subject to [Subsection (2)] the requirements of this section shall
173     demonstrate to the public transit district that the contractor has and will maintain an offer of
174     qualified health insurance coverage for the contractor's employees and the employee's
175     dependents during the duration of the contract[.] by submitting to the public transit district a
176     written statement that:
177          [(b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
178     shall:]
179          (i) Ŝ→ [
certifies that] ←Ŝ the contractor offers qualified health insurance coverage Ŝ→ [in
179a     accordance
] that complies ←Ŝ
180     with Section 26-40-115;

181          (ii) is from:
182          (A) an actuary selected by the contractor or the contractor's insurer; or
183          (B) an underwriter who is responsible for developing the employer group's premium
184     rates; and
185          (iii) was created within one year before the day on which the statement is submitted.
186          (b) A contractor that is subject to the requirements of this section shall:
187          (i) place a requirement in [the subcontract that the subcontractor] each of the
188     contractor's subcontracts that a subcontractor that is subject to the requirements of this section
189     shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
190     employees and the employees' [dependants] dependents during the duration of the subcontract;
191     and
192          [(ii) certify to the public transit district that the subcontractor has and will maintain an
193     offer of qualified health insurance coverage for the subcontractor's employees and the
194     employees' dependents during the duration of the prime contract.]
195          (ii) obtain from a subcontractor that is subject to the requirements of this section a
196     written statement that:
197          (A) Ŝ→ [
certifies that] ←Ŝ the subcontractor offers qualified health insurance coverage
197a     Ŝ→ [
in
198     accordance
] that complies ←Ŝ
with Section 26-40-115;
199          (B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
200     underwriter who is responsible for developing the employer group's premium rates; and
201          (C) was created within one year before the day on which the contractor obtains the
202     statement.
203          (c) (i) (A) A contractor [who fails to meet the requirements of] that fails to maintain an
204     offer of qualified health insurance coverage as described in Subsection (5)(a) during the
205     duration of the contract is subject to penalties in accordance with an ordinance adopted by the
206     public transit district under Subsection (6).
207          (B) A contractor is not subject to penalties for the failure of a subcontractor to [meet
208     the requirements of] obtain and maintain an offer of qualified health insurance coverage
209     described in Subsection (5)(b)(i).
210          (ii) (A) A subcontractor [who fails to meet the requirements of] that fails to obtain and
211     maintain an offer of qualified health insurance coverage described in Subsection (5)(b)(i)

212     during the duration of the [contract] subcontract is subject to penalties in accordance with an
213     ordinance adopted by the public transit district under Subsection (6).
214          (B) A subcontractor is not subject to penalties for the failure of a contractor to [meet
215     the requirements of] maintain an offer of qualified health insurance coverage described in
216     Subsection (5)(a).
217          (6) The public transit district shall adopt ordinances:
218          (a) in coordination with:
219          (i) the Department of Environmental Quality in accordance with Section 19-1-206;
220          (ii) the Department of Natural Resources in accordance with Section 79-2-404;
221          (iii) the State Building Board in accordance with Section [63A-5-205] 63A-5-205.5;
222          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403; and
223          (v) the Department of Transportation in accordance with Section 72-6-107.5; and
224          (b) that establish:
225          (i) the requirements and procedures a contractor and a subcontractor shall follow to
226     demonstrate [to the public transit district] compliance with this section [that shall include],
227     including:
228          [(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
229     time of the execution of each initial contract described in Subsection (2)(b);]
230          [(B) that the contractor's]
231          (A) that a contractor or subcontractor's compliance with this section is subject to an
232     audit by the public transit district or the Office of the Legislative Auditor General; [and]
233          [(C) that the actuarially equivalent determination required for the qualified health
234     insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
235     department or division with a written statement of actuarial equivalency, which is no more than
236     one year old, regarding the contractor's offer of qualified health coverage from an actuary
237     selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
238     developing the employer group's premium rates;]
239          (B) that a contractor that is subject to the requirements of this section shall obtain a
240     written statement described in Subsection (5)(a); and
241          (C) that a subcontractor that is subject to the requirements of this section shall obtain a
242     written statement described in Subsection (5)(b)(ii);

243          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
244     violates the provisions of this section, which may include:
245          (A) a three-month suspension of the contractor or subcontractor from entering into
246     future contracts with the public transit district upon the first violation;
247          (B) a six-month suspension of the contractor or subcontractor from entering into future
248     contracts with the public transit district upon the second violation;
249          (C) an action for debarment of the contractor or subcontractor in accordance with
250     Section 63G-6a-904 upon the third or subsequent violation; and
251          (D) monetary penalties which may not exceed 50% of the amount necessary to
252     purchase qualified health insurance coverage for employees and dependents of employees of
253     the contractor or subcontractor who were not offered qualified health insurance coverage
254     during the duration of the contract; and
255          (iii) a website on which the district shall post the commercially equivalent benchmark,
256     for the qualified health insurance coverage identified in Subsection (1)[(c)](e), that is provided
257     by the Department of Health, in accordance with Subsection 26-40-115(2).
258          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(b)(ii), a contractor
259     or subcontractor who intentionally violates the provisions of this section [shall be] is liable to
260     the employee for health care costs that would have been covered by qualified health insurance
261     coverage.
262          (ii) An employer has an affirmative defense to a cause of action under Subsection
263     (7)(a)(i) if:
264          (A) the employer relied in good faith on a written statement [of actuarial equivalency
265     provided by an:] described in Subsection (5)(a) or (5)(b)(ii); or
266          [(I) actuary; or]
267          [(II) underwriter who is responsible for developing the employer group's premium
268     rates; or]
269          (B) a department or division determines that compliance with this section is not
270     required under the provisions of Subsection (3) [or (4)].
271          (b) An employee has a private right of action only against the employee's employer to
272     enforce the provisions of this Subsection (7).
273          (8) Any penalties imposed and collected under this section shall be deposited into the

274     Medicaid Restricted Account created in Section 26-18-402.
275          (9) The failure of a contractor or subcontractor to provide qualified health insurance
276     coverage as required by this section:
277          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
278     or contractor under:
279          (i) Section 63G-6a-1602; or
280          (ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
281          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
282     contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
283     or construction.
284          Section 2. Section 19-1-206 is amended to read:
285          19-1-206. Contracting powers of department -- Health insurance coverage.
286          (1) [For purposes of] As used in this section:
287          (a) "Aggregate" means the sum of all contracts, change orders, and modifications
288     related to a single project.
289          (b) "Change order" means the same as that term is defined in Section 63G-6a-103.
290          [(a)] (c) "Employee" means, as defined in Section 34A-2-104, an "employee,"
291     "worker," or "operative" [as defined in Section 34A-2-104] who:
292          (i) works at least 30 hours per calendar week; and
293          (ii) meets employer eligibility waiting requirements for health care insurance, which
294     may not exceed the first day of the calendar month following 60 days [from the date of hire]
295     after the day on which the individual is hired.
296          [(b)] (d) "Health benefit plan" means the same as that term is defined in Section
297     31A-1-301.
298          [(c)] (e) "Qualified health insurance coverage" means the same as that term is defined
299     in Section 26-40-115.
300          [(d)] (f) "Subcontractor" means the same as that term is defined in Section 63A-5-208.
301          [(2) (a) Except as provided in Subsection (3), this section applies to a design or
302     construction contract entered into by or delegated to the department or a division or board of
303     the department on or after July 1, 2009, and to a prime contractor or subcontractor in
304     accordance with Subsection (2)(b).]

305          [(b) (i) A prime contractor is subject to this section if the prime contract is in the
306     amount of $2,000,000 or greater at the original execution of the contract.]
307          [(ii) A subcontractor is subject to this section if a subcontract is in the amount of
308     $1,000,000 or greater at the original execution of the contract.]
309          (2) Except as provided in Subsection (3), the requirements of this section apply to:
310          (a) a contractor of a design or construction contract entered into by, or delegated to, the
311     department, or a division or board of the department, on or after July 1, 2009, if the prime
312     contract is in an aggregate amount equal to or greater than $2,000,000; and
313          (b) a subcontractor of a contractor of a design or construction contract entered into by,
314     or delegated to, the department, or a division or board of the department, on or after July 1,
315     2009, if the subcontract is in an aggregate amount equal to or greater than $1,000,000.
316          (3) This section does not apply to contracts entered into by the department or a division
317     or board of the department if:
318          (a) the application of this section jeopardizes the receipt of federal funds;
319          (b) the contract or agreement is between:
320          (i) the department or a division or board of the department; and
321          (ii) (A) another agency of the state;
322          (B) the federal government;
323          (C) another state;
324          (D) an interstate agency;
325          (E) a political subdivision of this state; or
326          (F) a political subdivision of another state;
327          (c) the executive director determines that applying the requirements of this section to a
328     particular contract interferes with the effective response to an immediate health and safety
329     threat from the environment; or
330          (d) the contract is:
331          (i) a sole source contract; or
332          (ii) an emergency procurement.
333          [(4) (a) This section does not apply to a change order as defined in Section
334     63G-6a-103, or a modification to a contract, when the contract does not meet the initial
335     threshold required by Subsection (2).]

336          [(b)] (4) A person [who] that intentionally uses change orders [or], contract
337     modifications, or multiple contracts to circumvent the requirements of [Subsection (2)] this
338     section is guilty of an infraction.
339          (5) (a) A contractor subject to [Subsection (2)] the requirements of this section shall
340     demonstrate to the executive director that the contractor has and will maintain an offer of
341     qualified health insurance coverage for the contractor's employees and the employees'
342     dependents during the duration of the contract[.] by submitting to the executive director a
343     written statement that:
344          [(b) If a subcontractor of the contractor is subject to Subsection (2), the contractor
345     shall:]
346          (i) Ŝ→ [
certifies that] ←Ŝ the contractor offers qualified health insurance coverage Ŝ→ [in
346a     accordance
] that complies ←Ŝ
347     with Section 26-40-115;
348          (ii) is from:
349          (A) an actuary selected by the contractor or the contractor's insurer; or
350          (B) an underwriter who is responsible for developing the employer group's premium
351     rates; and
352          (iii) was created within one year before the day on which the statement is submitted.
353          (b) A contractor that is subject to the requirements of this section shall:
354          (i) place a requirement in [the subcontract that the subcontractor] each of the
355     contractor's subcontracts that a subcontractor that is subject to the requirements of this section
356     shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
357     employees and the employees' [dependants] dependents during the duration of the subcontract;
358     and
359          [(ii) certify to the executive director that the subcontractor has and will maintain an
360     offer of qualified health insurance coverage for the subcontractor's employees and the
361     employees' dependents during the duration of the prime contract.]
362          (ii) obtain from a subcontractor that is subject to the requirements of this section a
363     written statement that:
364          (A) Ŝ→ [
certifies that] ←Ŝ the subcontractor offers qualified health insurance coverage
364a      Ŝ→ [
in
365     accordance
] that complies ←Ŝ
with Section 26-40-115;
366          (B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an

367     underwriter who is responsible for developing the employer group's premium rates; and
368          (C) was created within one year before the day on which the contractor obtains the
369     statement.
370          (c) (i) (A) A contractor [who fails to comply with] that fails to maintain an offer of
371     qualified health insurance coverage described in Subsection (5)(a) during the duration of the
372     contract is subject to penalties in accordance with administrative rules adopted by the
373     department under Subsection (6).
374          (B) A contractor is not subject to penalties for the failure of a subcontractor to [meet
375     the requirements of] obtain and maintain an offer of qualified health insurance coverage
376     described in Subsection (5)(b)(i).
377          (ii) (A) A subcontractor [who fails to meet the requirements of] that fails to obtain and
378     maintain an offer of qualified health insurance coverage described in Subsection (5)(b) during
379     the duration of the [contract] subcontract is subject to penalties in accordance with
380     administrative rules adopted by the department under Subsection (6).
381          (B) A subcontractor is not subject to penalties for the failure of a contractor to [meet
382     the requirements of] maintain an offer of qualified health insurance coverage described in
383     Subsection (5)(a).
384          (6) The department shall adopt administrative rules:
385          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
386          (b) in coordination with:
387          (i) a public transit district in accordance with Section 17B-2a-818.5;
388          (ii) the Department of Natural Resources in accordance with Section 79-2-404;
389          (iii) the State Building Board in accordance with Section [63A-5-205] 63A-5-205.5;
390          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403;
391          (v) the Department of Transportation in accordance with Section 72-6-107.5; and
392          (vi) the Legislature's Administrative Rules Review Committee; and
393          (c) that establish:
394          (i) the requirements and procedures a contractor and a subcontractor shall follow to
395     demonstrate [to the public transit district] compliance with this section [that shall include],
396     including:
397          [(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the

398     time of the execution of each initial contract described in Subsection (2)(b);]
399          [(B) that the contractor's]
400          (A) that a contractor or subcontractor's compliance with this section is subject to an
401     audit by the department or the Office of the Legislative Auditor General; [and]
402          [(C) that the actuarially equivalent determination required for the qualified health
403     insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
404     department or division with a written statement of actuarial equivalency, which is no more than
405     one year old, regarding the contractor's offer of qualified health coverage from an actuary
406     selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
407     developing the employer group's premium rates;]
408          (B) that a contractor that is subject to the requirements of this section shall obtain a
409     written statement described in Subsection (5)(a); and
410          (C) that a subcontractor that is subject to the requirements of this section shall obtain a
411     written statement described in Subsection (5)(b)(ii);
412          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
413     violates the provisions of this section, which may include:
414          (A) a three-month suspension of the contractor or subcontractor from entering into
415     future contracts with the state upon the first violation;
416          (B) a six-month suspension of the contractor or subcontractor from entering into future
417     contracts with the state upon the second violation;
418          (C) an action for debarment of the contractor or subcontractor in accordance with
419     Section 63G-6a-904 upon the third or subsequent violation; and
420          (D) notwithstanding Section 19-1-303, monetary penalties which may not exceed 50%
421     of the amount necessary to purchase qualified health insurance coverage for an employee and
422     the dependents of an employee of the contractor or subcontractor who was not offered qualified
423     health insurance coverage during the duration of the contract; and
424          (iii) a website on which the department shall post the commercially equivalent
425     benchmark, for the qualified health insurance coverage identified in Subsection (1)[(c)](e), that
426     is provided by the Department of Health, in accordance with Subsection 26-40-115(2).
427          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c)(ii), a contractor
428     or subcontractor who intentionally violates the provisions of this section [shall be] is liable to

429     the employee for health care costs that would have been covered by qualified health insurance
430     coverage.
431          (ii) An employer has an affirmative defense to a cause of action under Subsection
432     (7)(a)(i) if:
433          (A) the employer relied in good faith on a written statement [of actuarial equivalency
434     provided by:] described in Subsection (5)(a) or (5)(b)(ii); or
435          [(I) an actuary; or]
436          [(II) an underwriter who is responsible for developing the employer group's premium
437     rates; or]
438          (B) the department determines that compliance with this section is not required under
439     the provisions of Subsection (3) [or (4)].
440          (b) An employee has a private right of action only against the employee's employer to
441     enforce the provisions of this Subsection (7).
442          (8) Any penalties imposed and collected under this section shall be deposited into the
443     Medicaid Restricted Account created in Section 26-18-402.
444          (9) The failure of a contractor or subcontractor to provide qualified health insurance
445     coverage as required by this section:
446          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
447     or contractor under:
448          (i) Section 63G-6a-1602; or
449          (ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
450          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
451     contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
452     or construction.
453          Section 3. Section 26-18-402 is amended to read:
454          26-18-402. Medicaid Restricted Account.
455          (1) There is created a restricted account in the General Fund known as the Medicaid
456     Restricted Account.
457          (2) (a) Except as provided in Subsection (3), the following shall be deposited into the
458     Medicaid Restricted Account:
459          (i) any general funds appropriated to the department for the state plan for medical

460     assistance or for the Division of Health Care Financing that are not expended by the
461     department in the fiscal year for which the general funds were appropriated and which are not
462     otherwise designated as nonlapsing shall lapse into the Medicaid Restricted Account;
463          (ii) any unused state funds that are associated with the Medicaid program, as defined in
464     Section 26-18-2, from the Department of Workforce Services and the Department of Human
465     Services; and
466          (iii) any penalties imposed and collected under:
467          (A) Section 17B-2a-818.5;
468          (B) Section 19-1-206;
469          [(C) Section 63A-5-205;]
470          (C) Subsection 63A-5-205.5;
471          (D) Section 63C-9-403;
472          (E) Section 72-6-107.5; or
473          (F) Section 79-2-404.
474          (b) The account shall earn interest and all interest earned shall be deposited into the
475     account.
476          (c) The Legislature may appropriate money in the restricted account to fund programs
477     that expand medical assistance coverage and private health insurance plans to low income
478     persons who have not traditionally been served by Medicaid, including the Utah Children's
479     Health Insurance Program created in Chapter 40, Utah Children's Health Insurance Act.
480          (3) For fiscal years 2008-09, 2009-10, 2010-11, 2011-12, and 2012-13 the following
481     funds are nonlapsing:
482          (a) any general funds appropriated to the department for the state plan for medical
483     assistance, or for the Division of Health Care Financing that are not expended by the
484     department in the fiscal year in which the general funds were appropriated; and
485          (b) funds described in Subsection (2)(a)(ii).
486          Section 4. Section 26-40-115 is amended to read:
487          26-40-115. State contractor -- Employee and dependent health benefit plan
488     coverage.
489          (1) For purposes of Sections 17B-2a-818.5, 19-1-206, [63A-5-205] 63A-5-205.5,
490     63C-9-403, 72-6-107.5, and 79-2-404, "qualified health insurance coverage" means, at the time

491     the contract is entered into or renewed:
492          (a) a health benefit plan and employer contribution level with a combined actuarial
493     value at least actuarially equivalent to the combined actuarial value of the benchmark plan
494     determined by the program under Subsection 26-40-106(1), and a contribution level at which
495     the employer pays at least 50% of the premium for the employee and the dependents of the
496     employee who reside or work in the state; or
497          (b) a federally qualified high deductible health plan that, at a minimum:
498          (i) has a deductible that is:
499          (A) the lowest deductible permitted for a federally qualified high deductible health
500     plan; or
501          (B) a deductible that is higher than the lowest deductible permitted for a federally
502     qualified high deductible health plan, but includes an employer contribution to a health savings
503     account in a dollar amount at least equal to the dollar amount difference between the lowest
504     deductible permitted for a federally qualified high deductible plan and the deductible for the
505     employer offered federally qualified high deductible plan;
506          (ii) has an out-of-pocket maximum that does not exceed three times the amount of the
507     annual deductible; and
508          (iii) provides that the employer pays 60% of the premium for the employee and the
509     dependents of the employee who work or reside in the state.
510          (2) The department shall:
511          (a) on or before July 1, 2016:
512          (i) determine the commercial equivalent of the benchmark plan described in Subsection
513     (1)(a); and
514          (ii) post the commercially equivalent benchmark plan described in Subsection (2)(a)(i)
515     on the department's website, noting the date posted; and
516          (b) update the posted commercially equivalent benchmark plan annually and at the
517     time of any change in the benchmark.
518          Section 5. Section 31A-1-301 is amended to read:
519          31A-1-301. Definitions.
520          As used in this title, unless otherwise specified:
521          (1) (a) "Accident and health insurance" means insurance to provide protection against

522     economic losses resulting from:
523          (i) a medical condition including:
524          (A) a medical care expense; or
525          (B) the risk of disability;
526          (ii) accident; or
527          (iii) sickness.
528          (b) "Accident and health insurance":
529          (i) includes a contract with disability contingencies including:
530          (A) an income replacement contract;
531          (B) a health care contract;
532          (C) an expense reimbursement contract;
533          (D) a credit accident and health contract;
534          (E) a continuing care contract; and
535          (F) a long-term care contract; and
536          (ii) may provide:
537          (A) hospital coverage;
538          (B) surgical coverage;
539          (C) medical coverage;
540          (D) loss of income coverage;
541          (E) prescription drug coverage;
542          (F) dental coverage; or
543          (G) vision coverage.
544          (c) "Accident and health insurance" does not include workers' compensation insurance.
545          (d) For purposes of a national licensing registry, "accident and health insurance" is the
546     same as "accident and health or sickness insurance."
547          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
548     63G, Chapter 3, Utah Administrative Rulemaking Act.
549          (3) "Administrator" means the same as that term is defined in Subsection [(170)] (171).
550          (4) "Adult" means an individual who has attained the age of at least 18 years.
551          (5) "Affiliate" means a person who controls, is controlled by, or is under common
552     control with, another person. A corporation is an affiliate of another corporation, regardless of

553     ownership, if substantially the same group of individuals manage the corporations.
554          (6) "Agency" means:
555          (a) a person other than an individual, including a sole proprietorship by which an
556     individual does business under an assumed name; and
557          (b) an insurance organization licensed or required to be licensed under Section
558     31A-23a-301, 31A-25-207, or 31A-26-209.
559          (7) "Alien insurer" means an insurer domiciled outside the United States.
560          (8) "Amendment" means an endorsement to an insurance policy or certificate.
561          (9) "Annuity" means an agreement to make periodical payments for a period certain or
562     over the lifetime of one or more individuals if the making or continuance of all or some of the
563     series of the payments, or the amount of the payment, is dependent upon the continuance of
564     human life.
565          (10) "Application" means a document:
566          (a) (i) completed by an applicant to provide information about the risk to be insured;
567     and
568          (ii) that contains information that is used by the insurer to evaluate risk and decide
569     whether to:
570          (A) insure the risk under:
571          (I) the coverage as originally offered; or
572          (II) a modification of the coverage as originally offered; or
573          (B) decline to insure the risk; or
574          (b) used by the insurer to gather information from the applicant before issuance of an
575     annuity contract.
576          (11) "Articles" or "articles of incorporation" means:
577          (a) the original articles;
578          (b) a special law;
579          (c) a charter;
580          (d) an amendment;
581          (e) restated articles;
582          (f) articles of merger or consolidation;
583          (g) a trust instrument;

584          (h) another constitutive document for a trust or other entity that is not a corporation;
585     and
586          (i) an amendment to an item listed in Subsections (11)(a) through (h).
587          (12) "Bail bond insurance" means a guarantee that a person will attend court when
588     required, up to and including surrender of the person in execution of a sentence imposed under
589     Subsection 77-20-7(1), as a condition to the release of that person from confinement.
590          (13) "Binder" means the same as that term is defined in Section 31A-21-102.
591          (14) "Blanket insurance policy" means a group policy covering a defined class of
592     persons:
593          (a) without individual underwriting or application; and
594          (b) that is determined by definition without designating each person covered.
595          (15) "Board," "board of trustees," or "board of directors" means the group of persons
596     with responsibility over, or management of, a corporation, however designated.
597          (16) "Bona fide office" means a physical office in this state:
598          (a) that is open to the public;
599          (b) that is staffed during regular business hours on regular business days; and
600          (c) at which the public may appear in person to obtain services.
601          (17) "Business entity" means:
602          (a) a corporation;
603          (b) an association;
604          (c) a partnership;
605          (d) a limited liability company;
606          (e) a limited liability partnership; or
607          (f) another legal entity.
608          (18) "Business of insurance" means the same as that term is defined in Subsection
609     [(91)] (92).
610          (19) "Business plan" means the information required to be supplied to the
611     commissioner under Subsections 31A-5-204(2)(i) and (j), including the information required
612     when these subsections apply by reference under:
613          (a) Section 31A-7-201;
614          (b) Section 31A-8-205; or

615          (c) Subsection 31A-9-205(2).
616          (20) (a) "Bylaws" means the rules adopted for the regulation or management of a
617     corporation's affairs, however designated.
618          (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
619     corporation.
620          (21) "Captive insurance company" means:
621          (a) an insurer:
622          (i) owned by another organization; and
623          (ii) whose exclusive purpose is to insure risks of the parent organization and an
624     affiliated company; or
625          (b) in the case of a group or association, an insurer:
626          (i) owned by the insureds; and
627          (ii) whose exclusive purpose is to insure risks of:
628          (A) a member organization;
629          (B) a group member; or
630          (C) an affiliate of:
631          (I) a member organization; or
632          (II) a group member.
633          (22) "Casualty insurance" means liability insurance.
634          (23) "Certificate" means evidence of insurance given to:
635          (a) an insured under a group insurance policy; or
636          (b) a third party.
637          (24) "Certificate of authority" is included within the term "license."
638          (25) "Claim," unless the context otherwise requires, means a request or demand on an
639     insurer for payment of a benefit according to the terms of an insurance policy.
640          (26) "Claims-made coverage" means an insurance contract or provision limiting
641     coverage under a policy insuring against legal liability to claims that are first made against the
642     insured while the policy is in force.
643          (27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
644     commissioner.
645          (b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent

646     supervisory official of another jurisdiction.
647          (28) (a) "Continuing care insurance" means insurance that:
648          (i) provides board and lodging;
649          (ii) provides one or more of the following:
650          (A) a personal service;
651          (B) a nursing service;
652          (C) a medical service; or
653          (D) any other health-related service; and
654          (iii) provides the coverage described in this Subsection (28)(a) under an agreement
655     effective:
656          (A) for the life of the insured; or
657          (B) for a period in excess of one year.
658          (b) Insurance is continuing care insurance regardless of whether or not the board and
659     lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
660          (29) (a) "Control," "controlling," "controlled," or "under common control" means the
661     direct or indirect possession of the power to direct or cause the direction of the management
662     and policies of a person. This control may be:
663          (i) by contract;
664          (ii) by common management;
665          (iii) through the ownership of voting securities; or
666          (iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
667          (b) There is no presumption that an individual holding an official position with another
668     person controls that person solely by reason of the position.
669          (c) A person having a contract or arrangement giving control is considered to have
670     control despite the illegality or invalidity of the contract or arrangement.
671          (d) There is a rebuttable presumption of control in a person who directly or indirectly
672     owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
673     voting securities of another person.
674          (30) "Controlled insurer" means a licensed insurer that is either directly or indirectly
675     controlled by a producer.
676          (31) "Controlling person" means a person that directly or indirectly has the power to

677     direct or cause to be directed, the management, control, or activities of a reinsurance
678     intermediary.
679          (32) "Controlling producer" means a producer who directly or indirectly controls an
680     insurer.
681          (33) (a) "Corporation" means an insurance corporation, except when referring to:
682          (i) a corporation doing business:
683          (A) as:
684          (I) an insurance producer;
685          (II) a surplus lines producer;
686          (III) a limited line producer;
687          (IV) a consultant;
688          (V) a managing general agent;
689          (VI) a reinsurance intermediary;
690          (VII) a third party administrator; or
691          (VIII) an adjuster; and
692          (B) under:
693          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
694     Reinsurance Intermediaries;
695          (II) Chapter 25, Third Party Administrators; or
696          (III) Chapter 26, Insurance Adjusters; or
697          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
698     Holding Companies.
699          (b) "Mutual" or "mutual corporation" means a mutual insurance corporation.
700          (c) "Stock corporation" means a stock insurance corporation.
701          (34) (a) "Creditable coverage" has the same meaning as provided in federal regulations
702     adopted pursuant to the Health Insurance Portability and Accountability Act.
703          (b) "Creditable coverage" includes coverage that is offered through a public health plan
704     such as:
705          (i) the Primary Care Network Program under a Medicaid primary care network
706     demonstration waiver obtained subject to Section 26-18-3;
707          (ii) the Children's Health Insurance Program under Section 26-40-106; or

708          (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
709     No. 101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. No.
710     109-415.
711          (35) "Credit accident and health insurance" means insurance on a debtor to provide
712     indemnity for payments coming due on a specific loan or other credit transaction while the
713     debtor has a disability.
714          (36) (a) "Credit insurance" means insurance offered in connection with an extension of
715     credit that is limited to partially or wholly extinguishing that credit obligation.
716          (b) "Credit insurance" includes:
717          (i) credit accident and health insurance;
718          (ii) credit life insurance;
719          (iii) credit property insurance;
720          (iv) credit unemployment insurance;
721          (v) guaranteed automobile protection insurance;
722          (vi) involuntary unemployment insurance;
723          (vii) mortgage accident and health insurance;
724          (viii) mortgage guaranty insurance; and
725          (ix) mortgage life insurance.
726          (37) "Credit life insurance" means insurance on the life of a debtor in connection with
727     an extension of credit that pays a person if the debtor dies.
728          (38) "Creditor" means a person, including an insured, having a claim, whether:
729          (a) matured;
730          (b) unmatured;
731          (c) liquidated;
732          (d) unliquidated;
733          (e) secured;
734          (f) unsecured;
735          (g) absolute;
736          (h) fixed; or
737          (i) contingent.
738          (39) "Credit property insurance" means insurance:

739          (a) offered in connection with an extension of credit; and
740          (b) that protects the property until the debt is paid.
741          (40) "Credit unemployment insurance" means insurance:
742          (a) offered in connection with an extension of credit; and
743          (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
744          (i) specific loan; or
745          (ii) credit transaction.
746          (41) (a) "Crop insurance" means insurance providing protection against damage to
747     crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation,
748     disease, or other yield-reducing conditions or perils that is:
749          (i) provided by the private insurance market; or
750          (ii) subsidized by the Federal Crop Insurance Corporation.
751          (b) "Crop insurance" includes multiperil crop insurance.
752          (42) (a) "Customer service representative" means a person that provides an insurance
753     service and insurance product information:
754          (i) for the customer service representative's:
755          (A) producer;
756          (B) surplus lines producer; or
757          (C) consultant employer; and
758          (ii) to the customer service representative's employer's:
759          (A) customer;
760          (B) client; or
761          (C) organization.
762          (b) A customer service representative may only operate within the scope of authority of
763     the customer service representative's producer, surplus lines producer, or consultant employer.
764          (43) "Deadline" means a final date or time:
765          (a) imposed by:
766          (i) statute;
767          (ii) rule; or
768          (iii) order; and
769          (b) by which a required filing or payment must be received by the department.

770          (44) "Deemer clause" means a provision under this title under which upon the
771     occurrence of a condition precedent, the commissioner is considered to have taken a specific
772     action. If the statute so provides, a condition precedent may be the commissioner's failure to
773     take a specific action.
774          (45) "Degree of relationship" means the number of steps between two persons
775     determined by counting the generations separating one person from a common ancestor and
776     then counting the generations to the other person.
777          (46) "Department" means the Insurance Department.
778          (47) "Director" means a member of the board of directors of a corporation.
779          (48) "Disability" means a physiological or psychological condition that partially or
780     totally limits an individual's ability to:
781          (a) perform the duties of:
782          (i) that individual's occupation; or
783          (ii) an occupation for which the individual is reasonably suited by education, training,
784     or experience; or
785          (b) perform two or more of the following basic activities of daily living:
786          (i) eating;
787          (ii) toileting;
788          (iii) transferring;
789          (iv) bathing; or
790          (v) dressing.
791          (49) "Disability income insurance" means the same as that term is defined in
792     Subsection [(82)] (83).
793          (50) "Domestic insurer" means an insurer organized under the laws of this state.
794          (51) "Domiciliary state" means the state in which an insurer:
795          (a) is incorporated;
796          (b) is organized; or
797          (c) in the case of an alien insurer, enters into the United States.
798          (52) (a) "Eligible employee" means:
799          (i) an employee who:
800          (A) works on a full-time basis; and

801          (B) has a normal work week of 30 or more hours; or
802          (ii) a person described in Subsection (52)(b).
803          (b) "Eligible employee" includes:
804          (i) an owner who:
805          (A) works on a full-time basis; and
806          (B) has a normal work week of 30 or more hours; and
807          (ii) if the individual is included under a health benefit plan of a small employer:
808          (A) a sole proprietor;
809          (B) a partner in a partnership; or
810          (C) an independent contractor.
811          (c) "Eligible employee" does not include, unless eligible under Subsection (52)(b):
812          (i) an individual who works on a temporary or substitute basis for a small employer;
813          (ii) an employer's spouse who does not meet the requirements of Subsection (52)(a)(i);
814     or
815          (iii) a dependent of an employer who does not meet the requirements of Subsection
816     (52)(a)(i).
817          (53) "Employee" means:
818          (a) an individual employed by an employer; and
819          (b) an owner who meets the requirements of Subsection (52)(b)(i).
820          (54) "Employee benefits" means one or more benefits or services provided to:
821          (a) an employee; or
822          (b) a dependent of an employee.
823          (55) (a) "Employee welfare fund" means a fund:
824          (i) established or maintained, whether directly or through a trustee, by:
825          (A) one or more employers;
826          (B) one or more labor organizations; or
827          (C) a combination of employers and labor organizations; and
828          (ii) that provides employee benefits paid or contracted to be paid, other than income
829     from investments of the fund:
830          (A) by or on behalf of an employer doing business in this state; or
831          (B) for the benefit of a person employed in this state.

832          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
833     revenues.
834          (56) "Endorsement" means a written agreement attached to a policy or certificate to
835     modify the policy or certificate coverage.
836          (57) (a) "Enrollee" means:
837          (i) a policyholder;
838          (ii) a certificate holder;
839          (iii) a subscriber; or
840          (iv) a covered individual:
841          (A) who has entered into a contract with an organization for health care; or
842          (B) on whose behalf an arrangement for health care has been made.
843          (b) "Enrollee" includes an insured.
844          (58) "Enrollment date," with respect to a health benefit plan, means:
845          (a) the first day of coverage; or
846          (b) if there is a waiting period, the first day of the waiting period.
847          (59) "Enterprise risk" means an activity, circumstance, event, or series of events
848     involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a
849     material adverse effect upon the financial condition or liquidity of the insurer or its insurance
850     holding company system as a whole, including anything that would cause:
851          (a) the insurer's risk-based capital to fall into an action or control level as set forth in
852     Sections 31A-17-601 through 31A-17-613; or
853          (b) the insurer to be in hazardous financial condition set forth in Section 31A-27a-101.
854          (60) (a) "Escrow" means:
855          (i) a transaction that effects the sale, transfer, encumbering, or leasing of real property,
856     when a person not a party to the transaction, and neither having nor acquiring an interest in the
857     title, performs, in accordance with the written instructions or terms of the written agreement
858     between the parties to the transaction, any of the following actions:
859          (A) the explanation, holding, or creation of a document; or
860          (B) the receipt, deposit, and disbursement of money;
861          (ii) a settlement or closing involving:
862          (A) a mobile home;

863          (B) a grazing right;
864          (C) a water right; or
865          (D) other personal property authorized by the commissioner.
866          (b) "Escrow" does not include:
867          (i) the following notarial acts performed by a notary within the state:
868          (A) an acknowledgment;
869          (B) a copy certification;
870          (C) jurat; and
871          (D) an oath or affirmation;
872          (ii) the receipt or delivery of a document; or
873          (iii) the receipt of money for delivery to the escrow agent.
874          (61) "Escrow agent" means an agency title insurance producer meeting the
875     requirements of Sections 31A-4-107, 31A-14-211, and 31A-23a-204, who is acting through an
876     individual title insurance producer licensed with an escrow subline of authority.
877          (62) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
878     excluded.
879          (b) The items listed in a list using the term "excludes" are representative examples for
880     use in interpretation of this title.
881          (63) "Exclusion" means for the purposes of accident and health insurance that an
882     insurer does not provide insurance coverage, for whatever reason, for one of the following:
883          (a) a specific physical condition;
884          (b) a specific medical procedure;
885          (c) a specific disease or disorder; or
886          (d) a specific prescription drug or class of prescription drugs.
887          (64) "Expense reimbursement insurance" means insurance:
888          (a) written to provide a payment for an expense relating to hospital confinement
889     resulting from illness or injury; and
890          (b) written:
891          (i) as a daily limit for a specific number of days in a hospital; and
892          (ii) to have a one or two day waiting period following a hospitalization.
893          (65) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding

894     a position of public or private trust.
895          (66) (a) "Filed" means that a filing is:
896          (i) submitted to the department as required by and in accordance with applicable
897     statute, rule, or filing order;
898          (ii) received by the department within the time period provided in applicable statute,
899     rule, or filing order; and
900          (iii) accompanied by the appropriate fee in accordance with:
901          (A) Section 31A-3-103; or
902          (B) rule.
903          (b) "Filed" does not include a filing that is rejected by the department because it is not
904     submitted in accordance with Subsection (66)(a).
905          (67) "Filing," when used as a noun, means an item required to be filed with the
906     department including:
907          (a) a policy;
908          (b) a rate;
909          (c) a form;
910          (d) a document;
911          (e) a plan;
912          (f) a manual;
913          (g) an application;
914          (h) a report;
915          (i) a certificate;
916          (j) an endorsement;
917          (k) an actuarial certification;
918          (l) a licensee annual statement;
919          (m) a licensee renewal application;
920          (n) an advertisement;
921          (o) a binder; or
922          (p) an outline of coverage.
923          (68) "First party insurance" means an insurance policy or contract in which the insurer
924     agrees to pay a claim submitted to it by the insured for the insured's losses.

925          (69) "Foreign insurer" means an insurer domiciled outside of this state, including an
926     alien insurer.
927          (70) (a) "Form" means one of the following prepared for general use:
928          (i) a policy;
929          (ii) a certificate;
930          (iii) an application;
931          (iv) an outline of coverage; or
932          (v) an endorsement.
933          (b) "Form" does not include a document specially prepared for use in an individual
934     case.
935          (71) "Franchise insurance" means an individual insurance policy provided through a
936     mass marketing arrangement involving a defined class of persons related in some way other
937     than through the purchase of insurance.
938          (72) "General lines of authority" include:
939          (a) the general lines of insurance in Subsection (73);
940          (b) title insurance under one of the following sublines of authority:
941          (i) title examination, including authority to act as a title marketing representative;
942          (ii) escrow, including authority to act as a title marketing representative; and
943          (iii) title marketing representative only;
944          (c) surplus lines;
945          (d) workers' compensation; and
946          (e) another line of insurance that the commissioner considers necessary to recognize in
947     the public interest.
948          (73) "General lines of insurance" include:
949          (a) accident and health;
950          (b) casualty;
951          (c) life;
952          (d) personal lines;
953          (e) property; and
954          (f) variable contracts, including variable life and annuity.
955          (74) "Group health plan" means an employee welfare benefit plan to the extent that the

956     plan provides medical care:
957          (a) (i) to an employee; or
958          (ii) to a dependent of an employee; and
959          (b) (i) directly;
960          (ii) through insurance reimbursement; or
961          (iii) through another method.
962          (75) (a) "Group insurance policy" means a policy covering a group of persons that is
963     issued:
964          (i) to a policyholder on behalf of the group; and
965          (ii) for the benefit of a member of the group who is selected under a procedure defined
966     in:
967          (A) the policy; or
968          (B) an agreement that is collateral to the policy.
969          (b) A group insurance policy may include a member of the policyholder's family or a
970     dependent.
971          (76) "Guaranteed automobile protection insurance" means insurance offered in
972     connection with an extension of credit that pays the difference in amount between the
973     insurance settlement and the balance of the loan if the insured automobile is a total loss.
974          (77) (a) "Health benefit plan" means, except as provided in Subsection (77)(b), a
975     policy, contract, certificate, or agreement offered or issued by a health carrier to provide,
976     deliver, arrange for, pay for, or reimburse any of the costs of health care.
977          (b) "Health benefit plan" does not include:
978          (i) coverage only for accident or disability income insurance, or any combination
979     thereof;
980          (ii) coverage issued as a supplement to liability insurance;
981          (iii) liability insurance, including general liability insurance and automobile liability
982     insurance;
983          (iv) workers' compensation or similar insurance;
984          (v) automobile medical payment insurance;
985          (vi) credit-only insurance;
986          (vii) coverage for on-site medical clinics;

987          (viii) other similar insurance coverage, specified in federal regulations issued pursuant
988     to Pub. L. No. 104-191, under which benefits for health care services are secondary or
989     incidental to other insurance benefits;
990          (ix) the following benefits if they are provided under a separate policy, certificate, or
991     contract of insurance or are otherwise not an integral part of the plan:
992          (A) limited scope dental or vision benefits;
993          (B) benefits for long-term care, nursing home care, home health care,
994     community-based care, or any combination thereof; or
995          (C) other similar limited benefits, specified in federal regulations issued pursuant to
996     Pub. L. No. 104-191;
997          (x) the following benefits if the benefits are provided under a separate policy,
998     certificate, or contract of insurance, there is no coordination between the provision of benefits
999     and any exclusion of benefits under any health plan, and the benefits are paid with respect to an
1000     event without regard to whether benefits are provided under any health plan:
1001          (A) coverage only for specified disease or illness; or
1002          (B) hospital indemnity or other fixed indemnity insurance; and
1003          (xi) the following if offered as a separate policy, certificate, or contract of insurance:
1004          (A) Medicare supplemental health insurance as defined under the Social Security Act,
1005     42 U.S.C. Sec. 1395ss(g)(1);
1006          (B) coverage supplemental to the coverage provided under United States Code, Title
1007     10, Chapter 55, Civilian Health and Medical Program of the Uniformed Services
1008     (CHAMPUS); or
1009          (C) similar supplemental coverage provided to coverage under a group health insurance
1010     plan.
1011          (78) "Health care" means any of the following intended for use in the diagnosis,
1012     treatment, mitigation, or prevention of a human ailment or impairment:
1013          (a) a professional service;
1014          (b) a personal service;
1015          (c) a facility;
1016          (d) equipment;
1017          (e) a device;

1018          (f) supplies; or
1019          (g) medicine.
1020          (79) (a) "Health care insurance" or "health insurance" means insurance providing:
1021          (i) a health care benefit; or
1022          (ii) payment of an incurred health care expense.
1023          (b) "Health care insurance" or "health insurance" does not include accident and health
1024     insurance providing a benefit for:
1025          (i) replacement of income;
1026          (ii) short-term accident;
1027          (iii) fixed indemnity;
1028          (iv) credit accident and health;
1029          (v) supplements to liability;
1030          (vi) workers' compensation;
1031          (vii) automobile medical payment;
1032          (viii) no-fault automobile;
1033          (ix) equivalent self-insurance; or
1034          (x) a type of accident and health insurance coverage that is a part of or attached to
1035     another type of policy.
1036          (80) "Health care provider" means the same as that term is defined in Section
1037     78B-3-403.
1038          (81) "Health insurance exchange" means an exchange as defined in 45 C.F.R. Sec.
1039     155.20.
1040          [(81)] (82) "Health Insurance Portability and Accountability Act" means the Health
1041     Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936, as
1042     amended.
1043          [(82)] (83) "Income replacement insurance" or "disability income insurance" means
1044     insurance written to provide payments to replace income lost from accident or sickness.
1045          [(83)] (84) "Indemnity" means the payment of an amount to offset all or part of an
1046     insured loss.
1047          [(84)] (85) "Independent adjuster" means an insurance adjuster required to be licensed
1048     under Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.

1049          [(85)] (86) "Independently procured insurance" means insurance procured under
1050     Section 31A-15-104.
1051          [(86)] (87) "Individual" means a natural person.
1052          [(87)] (88) "Inland marine insurance" includes insurance covering:
1053          (a) property in transit on or over land;
1054          (b) property in transit over water by means other than boat or ship;
1055          (c) bailee liability;
1056          (d) fixed transportation property such as bridges, electric transmission systems, radio
1057     and television transmission towers and tunnels; and
1058          (e) personal and commercial property floaters.
1059          [(88)] (89) "Insolvency" or "insolvent" means that:
1060          (a) an insurer is unable to pay [its debts or meet its obligations as the debts and
1061     obligations mature] the insurer's obligations as the obligations are due;
1062          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
1063     RBC under Subsection 31A-17-601(8)(c); or
1064          (c) an [insurer is determined to be hazardous under this title] insurer's admitted assets
1065     are less than the insurer's liabilities.
1066          [(89)] (90) (a) "Insurance" means:
1067          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
1068     persons to one or more other persons; or
1069          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
1070     group of persons that includes the person seeking to distribute that person's risk.
1071          (b) "Insurance" includes:
1072          (i) a risk distributing arrangement providing for compensation or replacement for
1073     damages or loss through the provision of a service or a benefit in kind;
1074          (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
1075     business and not as merely incidental to a business transaction; and
1076          (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
1077     but with a class of persons who have agreed to share the risk.
1078          [(90)] (91) "Insurance adjuster" means a person who directs or conducts the
1079     investigation, negotiation, or settlement of a claim under an insurance policy other than life

1080     insurance or an annuity, on behalf of an insurer, policyholder, or a claimant under an insurance
1081     policy.
1082          [(91)] (92) "Insurance business" or "business of insurance" includes:
1083          (a) providing health care insurance by an organization that is or is required to be
1084     licensed under this title;
1085          (b) providing a benefit to an employee in the event of a contingency not within the
1086     control of the employee, in which the employee is entitled to the benefit as a right, which
1087     benefit may be provided either:
1088          (i) by a single employer or by multiple employer groups; or
1089          (ii) through one or more trusts, associations, or other entities;
1090          (c) providing an annuity:
1091          (i) including an annuity issued in return for a gift; and
1092          (ii) except an annuity provided by a person specified in Subsections 31A-22-1305(2)
1093     and (3);
1094          (d) providing the characteristic services of a motor club as outlined in Subsection
1095     [(120)] (121);
1096          (e) providing another person with insurance;
1097          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
1098     or surety, a contract or policy of title insurance;
1099          (g) transacting or proposing to transact any phase of title insurance, including:
1100          (i) solicitation;
1101          (ii) negotiation preliminary to execution;
1102          (iii) execution of a contract of title insurance;
1103          (iv) insuring; and
1104          (v) transacting matters subsequent to the execution of the contract and arising out of
1105     the contract, including reinsurance;
1106          (h) transacting or proposing a life settlement; and
1107          (i) doing, or proposing to do, any business in substance equivalent to Subsections
1108     [(91)] (92)(a) through (h) in a manner designed to evade this title.
1109          [(92)] (93) "Insurance consultant" or "consultant" means a person who:
1110          (a) advises another person about insurance needs and coverages;

1111          (b) is compensated by the person advised on a basis not directly related to the insurance
1112     placed; and
1113          (c) except as provided in Section 31A-23a-501, is not compensated directly or
1114     indirectly by an insurer or producer for advice given.
1115          [(93)] (94) "Insurance holding company system" means a group of two or more
1116     affiliated persons, at least one of whom is an insurer.
1117          [(94)] (95) (a) "Insurance producer" or "producer" means a person licensed or required
1118     to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
1119          (b) (i) "Producer for the insurer" means a producer who is compensated directly or
1120     indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
1121     insurer.
1122          (ii) "Producer for the insurer" may be referred to as an "agent."
1123          (c) (i) "Producer for the insured" means a producer who:
1124          (A) is compensated directly and only by an insurance customer or an insured; and
1125          (B) receives no compensation directly or indirectly from an insurer for selling,
1126     soliciting, or negotiating an insurance product of that insurer to an insurance customer or
1127     insured.
1128          (ii) "Producer for the insured" may be referred to as a "broker."
1129          [(95)] (96) (a) "Insured" means a person to whom or for whose benefit an insurer
1130     makes a promise in an insurance policy and includes:
1131          (i) a policyholder;
1132          (ii) a subscriber;
1133          (iii) a member; and
1134          (iv) a beneficiary.
1135          (b) The definition in Subsection [(95)] (96)(a):
1136          (i) applies only to this title;
1137          (ii) does not define the meaning of "insured" as used in an insurance policy or
1138     certificate; and
1139          (iii) includes an enrollee.
1140          [(96)] (97) (a) "Insurer" means a person doing an insurance business as a principal
1141     including:

1142          (i) a fraternal benefit society;
1143          (ii) an issuer of a gift annuity other than an annuity specified in Subsections
1144     31A-22-1305(2) and (3);
1145          (iii) a motor club;
1146          (iv) an employee welfare plan;
1147          (v) a person purporting or intending to do an insurance business as a principal on that
1148     person's own account; and
1149          (vi) a health maintenance organization.
1150          (b) "Insurer" does not include a governmental entity to the extent the governmental
1151     entity is engaged in an activity described in Section 31A-12-107.
1152          [(97)] (98) "Interinsurance exchange" means the same as that term is defined in
1153     Subsection [(152)] (153).
1154          [(98)] (99) "Involuntary unemployment insurance" means insurance:
1155          (a) offered in connection with an extension of credit; and
1156          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
1157     coming due on a:
1158          (i) specific loan; or
1159          (ii) credit transaction.
1160          [(99)] (100) (a) "Large employer," in connection with a health benefit plan, means an
1161     employer who, with respect to a calendar year and to a plan year:
1162          (i) employed an average of at least 51 employees on business days during the preceding
1163     calendar year; and
1164          (ii) employs at least one employee on the first day of the plan year.
1165          (b) The number of employees shall be determined using the method set forth in 26
1166     U.S.C. Sec. 4980H(c)(2).
1167          [(100)] (101) "Late enrollee," with respect to an employer health benefit plan, means
1168     an individual whose enrollment is a late enrollment.
1169          [(101)] (102) "Late enrollment," with respect to an employer health benefit plan, means
1170     enrollment of an individual other than:
1171          (a) on the earliest date on which coverage can become effective for the individual
1172     under the terms of the plan; or

1173          (b) through special enrollment.
1174          [(102)] (103) (a) Except for a retainer contract or legal assistance described in Section
1175     31A-1-103, "legal expense insurance" means insurance written to indemnify or pay for a
1176     specified legal expense.
1177          (b) "Legal expense insurance" includes an arrangement that creates a reasonable
1178     expectation of an enforceable right.
1179          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
1180     legal services incidental to other insurance coverage.
1181          [(103)] (104) (a) "Liability insurance" means insurance against liability:
1182          (i) for death, injury, or disability of a human being, or for damage to property,
1183     exclusive of the coverages under:
1184          (A) medical malpractice insurance;
1185          (B) professional liability insurance; and
1186          (C) workers' compensation insurance;
1187          (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
1188     insured who is injured, irrespective of legal liability of the insured, when issued with or
1189     supplemental to insurance against legal liability for the death, injury, or disability of a human
1190     being, exclusive of the coverages under:
1191          (A) medical malpractice insurance;
1192          (B) professional liability insurance; and
1193          (C) workers' compensation insurance;
1194          (iii) for loss or damage to property resulting from an accident to or explosion of a
1195     boiler, pipe, pressure container, machinery, or apparatus;
1196          (iv) for loss or damage to property caused by:
1197          (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
1198          (B) water entering through a leak or opening in a building; or
1199          (v) for other loss or damage properly the subject of insurance not within another kind
1200     of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
1201          (b) "Liability insurance" includes:
1202          (i) vehicle liability insurance;
1203          (ii) residential dwelling liability insurance; and

1204          (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
1205     boiler, machinery, or apparatus of any kind when done in connection with insurance on the
1206     elevator, boiler, machinery, or apparatus.
1207          [(104)] (105) (a) "License" means authorization issued by the commissioner to engage
1208     in an activity that is part of or related to the insurance business.
1209          (b) "License" includes a certificate of authority issued to an insurer.
1210          [(105)] (106) (a) "Life insurance" means:
1211          (i) insurance on a human life; and
1212          (ii) insurance pertaining to or connected with human life.
1213          (b) The business of life insurance includes:
1214          (i) granting a death benefit;
1215          (ii) granting an annuity benefit;
1216          (iii) granting an endowment benefit;
1217          (iv) granting an additional benefit in the event of death by accident;
1218          (v) granting an additional benefit to safeguard the policy against lapse; and
1219          (vi) providing an optional method of settlement of proceeds.
1220          [(106)] (107) "Limited license" means a license that:
1221          (a) is issued for a specific product of insurance; and
1222          (b) limits an individual or agency to transact only for that product or insurance.
1223          [(107)] (108) "Limited line credit insurance" includes the following forms of
1224     insurance:
1225          (a) credit life;
1226          (b) credit accident and health;
1227          (c) credit property;
1228          (d) credit unemployment;
1229          (e) involuntary unemployment;
1230          (f) mortgage life;
1231          (g) mortgage guaranty;
1232          (h) mortgage accident and health;
1233          (i) guaranteed automobile protection; and
1234          (j) another form of insurance offered in connection with an extension of credit that:

1235          (i) is limited to partially or wholly extinguishing the credit obligation; and
1236          (ii) the commissioner determines by rule should be designated as a form of limited line
1237     credit insurance.
1238          [(108)] (109) "Limited line credit insurance producer" means a person who sells,
1239     solicits, or negotiates one or more forms of limited line credit insurance coverage to an
1240     individual through a master, corporate, group, or individual policy.
1241          [(109)] (110) "Limited line insurance" includes:
1242          (a) bail bond;
1243          (b) limited line credit insurance;
1244          (c) legal expense insurance;
1245          (d) motor club insurance;
1246          (e) car rental related insurance;
1247          (f) travel insurance;
1248          (g) crop insurance;
1249          (h) self-service storage insurance;
1250          (i) guaranteed asset protection waiver;
1251          (j) portable electronics insurance; and
1252          (k) another form of limited insurance that the commissioner determines by rule should
1253     be designated a form of limited line insurance.
1254          [(110)] (111) "Limited lines authority" includes the lines of insurance listed in
1255     Subsection [(109)] (110).
1256          [(111)] (112) "Limited lines producer" means a person who sells, solicits, or negotiates
1257     limited lines insurance.
1258          [(112)] (113) (a) "Long-term care insurance" means an insurance policy or rider
1259     advertised, marketed, offered, or designated to provide coverage:
1260          (i) in a setting other than an acute care unit of a hospital;
1261          (ii) for not less than 12 consecutive months for a covered person on the basis of:
1262          (A) expenses incurred;
1263          (B) indemnity;
1264          (C) prepayment; or
1265          (D) another method;

1266          (iii) for one or more necessary or medically necessary services that are:
1267          (A) diagnostic;
1268          (B) preventative;
1269          (C) therapeutic;
1270          (D) rehabilitative;
1271          (E) maintenance; or
1272          (F) personal care; and
1273          (iv) that may be issued by:
1274          (A) an insurer;
1275          (B) a fraternal benefit society;
1276          (C) (I) a nonprofit health hospital; and
1277          (II) a medical service corporation;
1278          (D) a prepaid health plan;
1279          (E) a health maintenance organization; or
1280          (F) an entity similar to the entities described in Subsections [(112)] (113)(a)(iv)(A)
1281     through (E) to the extent that the entity is otherwise authorized to issue life or health care
1282     insurance.
1283          (b) "Long-term care insurance" includes:
1284          (i) any of the following that provide directly or supplement long-term care insurance:
1285          (A) a group or individual annuity or rider; or
1286          (B) a life insurance policy or rider;
1287          (ii) a policy or rider that provides for payment of benefits on the basis of:
1288          (A) cognitive impairment; or
1289          (B) functional capacity; or
1290          (iii) a qualified long-term care insurance contract.
1291          (c) "Long-term care insurance" does not include:
1292          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
1293          (ii) basic hospital expense coverage;
1294          (iii) basic medical/surgical expense coverage;
1295          (iv) hospital confinement indemnity coverage;
1296          (v) major medical expense coverage;

1297          (vi) income replacement or related asset-protection coverage;
1298          (vii) accident only coverage;
1299          (viii) coverage for a specified:
1300          (A) disease; or
1301          (B) accident;
1302          (ix) limited benefit health coverage; or
1303          (x) a life insurance policy that accelerates the death benefit to provide the option of a
1304     lump sum payment:
1305          (A) if the following are not conditioned on the receipt of long-term care:
1306          (I) benefits; or
1307          (II) eligibility; and
1308          (B) the coverage is for one or more the following qualifying events:
1309          (I) terminal illness;
1310          (II) medical conditions requiring extraordinary medical intervention; or
1311          (III) permanent institutional confinement.
1312          [(113)] (114) "Managed care organization" means a person:
1313          (a) licensed as a health maintenance organization under Chapter 8, Health Maintenance
1314     Organizations and Limited Health Plans; or
1315          (b) (i) licensed under:
1316          (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1317          (B) Chapter 7, Nonprofit Health Service Insurance Corporations; or
1318          (C) Chapter 14, Foreign Insurers; and
1319          (ii) that requires an enrollee to use, or offers incentives, including financial incentives,
1320     for an enrollee to use, network providers.
1321          [(114)] (115) "Medical malpractice insurance" means insurance against legal liability
1322     incident to the practice and provision of a medical service other than the practice and provision
1323     of a dental service.
1324          [(115)] (116) "Member" means a person having membership rights in an insurance
1325     corporation.
1326          [(116)] (117) "Minimum capital" or "minimum required capital" means the capital that
1327     must be constantly maintained by a stock insurance corporation as required by statute.

1328          [(117)] (118) "Mortgage accident and health insurance" means insurance offered in
1329     connection with an extension of credit that provides indemnity for payments coming due on a
1330     mortgage while the debtor has a disability.
1331          [(118)] (119) "Mortgage guaranty insurance" means surety insurance under which a
1332     mortgagee or other creditor is indemnified against losses caused by the default of a debtor.
1333          [(119)] (120) "Mortgage life insurance" means insurance on the life of a debtor in
1334     connection with an extension of credit that pays if the debtor dies.
1335          [(120)] (121) "Motor club" means a person:
1336          (a) licensed under:
1337          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1338          (ii) Chapter 11, Motor Clubs; or
1339          (iii) Chapter 14, Foreign Insurers; and
1340          (b) that promises for an advance consideration to provide for a stated period of time
1341     one or more:
1342          (i) legal services under Subsection 31A-11-102(1)(b);
1343          (ii) bail services under Subsection 31A-11-102(1)(c); or
1344          (iii) (A) trip reimbursement;
1345          (B) towing services;
1346          (C) emergency road services;
1347          (D) stolen automobile services;
1348          (E) a combination of the services listed in Subsections [(120)] (121)(b)(iii)(A) through
1349     (D); or
1350          (F) other services given in Subsections 31A-11-102(1)(b) through (f).
1351          [(121)] (122) "Mutual" means a mutual insurance corporation.
1352          [(122)] (123) "Network plan" means health care insurance:
1353          (a) that is issued by an insurer; and
1354          (b) under which the financing and delivery of medical care is provided, in whole or in
1355     part, through a defined set of providers under contract with the insurer, including the financing
1356     and delivery of an item paid for as medical care.
1357          [(123)] (124) "Network provider" means a health care provider who has an agreement
1358     with a managed care organization to provide health care services to an enrollee with an

1359     expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly
1360     from the managed care organization.
1361          [(124)] (125) "Nonparticipating" means a plan of insurance under which the insured is
1362     not entitled to receive a dividend representing a share of the surplus of the insurer.
1363          [(125)] (126) "Ocean marine insurance" means insurance against loss of or damage to:
1364          (a) ships or hulls of ships;
1365          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
1366     securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
1367     interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
1368          (c) earnings such as freight, passage money, commissions, or profits derived from
1369     transporting goods or people upon or across the oceans or inland waterways; or
1370          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
1371     owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
1372     in connection with maritime activity.
1373          [(126)] (127) "Order" means an order of the commissioner.
1374          [(127)] (128) "Outline of coverage" means a summary that explains an accident and
1375     health insurance policy.
1376          [(128)] (129) "Participating" means a plan of insurance under which the insured is
1377     entitled to receive a dividend representing a share of the surplus of the insurer.
1378          [(129)] (130) "Participation," as used in a health benefit plan, means a requirement
1379     relating to the minimum percentage of eligible employees that must be enrolled in relation to
1380     the total number of eligible employees of an employer reduced by each eligible employee who
1381     voluntarily declines coverage under the plan because the employee:
1382          (a) has other group health care insurance coverage; or
1383          (b) receives:
1384          (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
1385     Security Amendments of 1965; or
1386          (ii) another government health benefit.
1387          [(130)] (131) "Person" includes:
1388          (a) an individual;
1389          (b) a partnership;

1390          (c) a corporation;
1391          (d) an incorporated or unincorporated association;
1392          (e) a joint stock company;
1393          (f) a trust;
1394          (g) a limited liability company;
1395          (h) a reciprocal;
1396          (i) a syndicate; or
1397          (j) another similar entity or combination of entities acting in concert.
1398          [(131)] (132) "Personal lines insurance" means property and casualty insurance
1399     coverage sold for primarily noncommercial purposes to:
1400          (a) an individual; or
1401          (b) a family.
1402          [(132)] (133) "Plan sponsor" means the same as that term is defined in 29 U.S.C. Sec.
1403     1002(16)(B).
1404          [(133)] (134) "Plan year" means:
1405          (a) the year that is designated as the plan year in:
1406          (i) the plan document of a group health plan; or
1407          (ii) a summary plan description of a group health plan;
1408          (b) if the plan document or summary plan description does not designate a plan year or
1409     there is no plan document or summary plan description:
1410          (i) the year used to determine deductibles or limits;
1411          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
1412     or
1413          (iii) the employer's taxable year if:
1414          (A) the plan does not impose deductibles or limits on a yearly basis; and
1415          (B) (I) the plan is not insured; or
1416          (II) the insurance policy is not renewed on an annual basis; or
1417          (c) in a case not described in Subsection [(133)] (134)(a) or (b), the calendar year.
1418          [(134)] (135) (a) "Policy" means a document, including an attached endorsement or
1419     application that:
1420          (i) purports to be an enforceable contract; and

1421          (ii) memorializes in writing some or all of the terms of an insurance contract.
1422          (b) "Policy" includes a service contract issued by:
1423          (i) a motor club under Chapter 11, Motor Clubs;
1424          (ii) a service contract provided under Chapter 6a, Service Contracts; and
1425          (iii) a corporation licensed under:
1426          (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
1427          (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
1428          (c) "Policy" does not include:
1429          (i) a certificate under a group insurance contract; or
1430          (ii) a document that does not purport to have legal effect.
1431          [(135)] (136) "Policyholder" means a person who controls a policy, binder, or oral
1432     contract by ownership, premium payment, or otherwise.
1433          [(136)] (137) "Policy illustration" means a presentation or depiction that includes
1434     nonguaranteed elements of a policy of life insurance over a period of years.
1435          [(137)] (138) "Policy summary" means a synopsis describing the elements of a life
1436     insurance policy.
1437          [(138)] (139) "PPACA" means the Patient Protection and Affordable Care Act, Pub. L.
1438     No. 111-148 and the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152,
1439     and related federal regulations and guidance.
1440          [(139)] (140) "Preexisting condition," with respect to [a health benefit plan] health care
1441     insurance:
1442          (a) means a condition that was present before the effective date of coverage, whether or
1443     not medical advice, diagnosis, care, or treatment was recommended or received before that day;
1444     and
1445          (b) does not include a condition indicated by genetic information unless an actual
1446     diagnosis of the condition by a physician has been made.
1447          [(140)] (141) (a) "Premium" means the monetary consideration for an insurance policy.
1448          (b) "Premium" includes, however designated:
1449          (i) an assessment;
1450          (ii) a membership fee;
1451          (iii) a required contribution; or

1452          (iv) monetary consideration.
1453          (c) (i) "Premium" does not include consideration paid to a third party administrator for
1454     the third party administrator's services.
1455          (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
1456     insurance on the risks administered by the third party administrator.
1457          [(141)] (142) "Principal officers" for a corporation means the officers designated under
1458     Subsection 31A-5-203(3).
1459          [(142)] (143) "Proceeding" includes an action or special statutory proceeding.
1460          [(143)] (144) "Professional liability insurance" means insurance against legal liability
1461     incident to the practice of a profession and provision of a professional service.
1462          [(144)] (145) (a) Except as provided in Subsection [(144)] (145)(b), "property
1463     insurance" means insurance against loss or damage to real or personal property of every kind
1464     and any interest in that property:
1465          (i) from all hazards or causes; and
1466          (ii) against loss consequential upon the loss or damage including vehicle
1467     comprehensive and vehicle physical damage coverages.
1468          (b) "Property insurance" does not include:
1469          (i) inland marine insurance; and
1470          (ii) ocean marine insurance.
1471          [(145)] (146) "Qualified long-term care insurance contract" or "federally tax qualified
1472     long-term care insurance contract" means:
1473          (a) an individual or group insurance contract that meets the requirements of Section
1474     7702B(b), Internal Revenue Code; or
1475          (b) the portion of a life insurance contract that provides long-term care insurance:
1476          (i) (A) by rider; or
1477          (B) as a part of the contract; and
1478          (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
1479     Code.
1480          [(146)] (147) "Qualified United States financial institution" means an institution that:
1481          (a) is:
1482          (i) organized under the laws of the United States or any state; or

1483          (ii) in the case of a United States office of a foreign banking organization, licensed
1484     under the laws of the United States or any state;
1485          (b) is regulated, supervised, and examined by a United States federal or state authority
1486     having regulatory authority over a bank or trust company; and
1487          (c) meets the standards of financial condition and standing that are considered
1488     necessary and appropriate to regulate the quality of a financial institution whose letters of credit
1489     will be acceptable to the commissioner as determined by:
1490          (i) the commissioner by rule; or
1491          (ii) the Securities Valuation Office of the National Association of Insurance
1492     Commissioners.
1493          [(147)] (148) (a) "Rate" means:
1494          (i) the cost of a given unit of insurance; or
1495          (ii) for property or casualty insurance, that cost of insurance per exposure unit either
1496     expressed as:
1497          (A) a single number; or
1498          (B) a pure premium rate, adjusted before the application of individual risk variations
1499     based on loss or expense considerations to account for the treatment of:
1500          (I) expenses;
1501          (II) profit; and
1502          (III) individual insurer variation in loss experience.
1503          (b) "Rate" does not include a minimum premium.
1504          [(148)] (149) (a) Except as provided in Subsection [(148)] (149)(b), "rate service
1505     organization" means a person who assists an insurer in rate making or filing by:
1506          (i) collecting, compiling, and furnishing loss or expense statistics;
1507          (ii) recommending, making, or filing rates or supplementary rate information; or
1508          (iii) advising about rate questions, except as an attorney giving legal advice.
1509          (b) "Rate service organization" does not mean:
1510          (i) an employee of an insurer;
1511          (ii) a single insurer or group of insurers under common control;
1512          (iii) a joint underwriting group; or
1513          (iv) an individual serving as an actuarial or legal consultant.

1514          [(149)] (150) "Rating manual" means any of the following used to determine initial and
1515     renewal policy premiums:
1516          (a) a manual of rates;
1517          (b) a classification;
1518          (c) a rate-related underwriting rule; and
1519          (d) a rating formula that describes steps, policies, and procedures for determining
1520     initial and renewal policy premiums.
1521          [(150)] (151) (a) "Rebate" means a licensee paying, allowing, giving, or offering to
1522     pay, allow, or give, directly or indirectly:
1523          (i) a refund of premium or portion of premium;
1524          (ii) a refund of commission or portion of commission;
1525          (iii) a refund of all or a portion of a consultant fee; or
1526          (iv) providing services or other benefits not specified in an insurance or annuity
1527     contract.
1528          (b) "Rebate" does not include:
1529          (i) a refund due to termination or changes in coverage;
1530          (ii) a refund due to overcharges made in error by the licensee; or
1531          (iii) savings or wellness benefits as provided in the contract by the licensee.
1532          [(151)] (152) "Received by the department" means:
1533          (a) the date delivered to and stamped received by the department, if delivered in
1534     person;
1535          (b) the post mark date, if delivered by mail;
1536          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
1537          (d) the received date recorded on an item delivered, if delivered by:
1538          (i) facsimile;
1539          (ii) email; or
1540          (iii) another electronic method; or
1541          (e) a date specified in:
1542          (i) a statute;
1543          (ii) a rule; or
1544          (iii) an order.

1545          [(152)] (153) "Reciprocal" or "interinsurance exchange" means an unincorporated
1546     association of persons:
1547          (a) operating through an attorney-in-fact common to all of the persons; and
1548          (b) exchanging insurance contracts with one another that provide insurance coverage
1549     on each other.
1550          [(153)] (154) "Reinsurance" means an insurance transaction where an insurer, for
1551     consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
1552     reinsurance transactions, this title sometimes refers to:
1553          (a) the insurer transferring the risk as the "ceding insurer"; and
1554          (b) the insurer assuming the risk as the:
1555          (i) "assuming insurer"; or
1556          (ii) "assuming reinsurer."
1557          [(154)] (155) "Reinsurer" means a person licensed in this state as an insurer with the
1558     authority to assume reinsurance.
1559          [(155)] (156) "Residential dwelling liability insurance" means insurance against
1560     liability resulting from or incident to the ownership, maintenance, or use of a residential
1561     dwelling that is a detached single family residence or multifamily residence up to four units.
1562          [(156)] (157) (a) "Retrocession" means reinsurance with another insurer of a liability
1563     assumed under a reinsurance contract.
1564          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
1565     liability assumed under a reinsurance contract.
1566          [(157)] (158) "Rider" means an endorsement to:
1567          (a) an insurance policy; or
1568          (b) an insurance certificate.
1569          [(158)] (159) "Secondary medical condition" means a complication related to an
1570     exclusion from coverage in accident and health insurance.
1571          [(159)] (160) (a) "Security" means a:
1572          (i) note;
1573          (ii) stock;
1574          (iii) bond;
1575          (iv) debenture;

1576          (v) evidence of indebtedness;
1577          (vi) certificate of interest or participation in a profit-sharing agreement;
1578          (vii) collateral-trust certificate;
1579          (viii) preorganization certificate or subscription;
1580          (ix) transferable share;
1581          (x) investment contract;
1582          (xi) voting trust certificate;
1583          (xii) certificate of deposit for a security;
1584          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
1585     payments out of production under such a title or lease;
1586          (xiv) commodity contract or commodity option;
1587          (xv) certificate of interest or participation in, temporary or interim certificate for,
1588     receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
1589     in Subsections [(159)] (160)(a)(i) through (xiv); or
1590          (xvi) another interest or instrument commonly known as a security.
1591          (b) "Security" does not include:
1592          (i) any of the following under which an insurance company promises to pay money in a
1593     specific lump sum or periodically for life or some other specified period:
1594          (A) insurance;
1595          (B) an endowment policy; or
1596          (C) an annuity contract; or
1597          (ii) a burial certificate or burial contract.
1598          [(160)] (161) "Securityholder" means a specified person who owns a security of a
1599     person, including:
1600          (a) common stock;
1601          (b) preferred stock;
1602          (c) debt obligations; and
1603          (d) any other security convertible into or evidencing the right of any of the items listed
1604     in this Subsection [(160)] (161).
1605          [(161)] (162) (a) "Self-insurance" means an arrangement under which a person
1606     provides for spreading its own risks by a systematic plan.

1607          (b) Except as provided in this Subsection [(161)] (162), "self-insurance" does not
1608     include an arrangement under which a number of persons spread their risks among themselves.
1609          (c) "Self-insurance" includes:
1610          (i) an arrangement by which a governmental entity undertakes to indemnify an
1611     employee for liability arising out of the employee's employment; and
1612          (ii) an arrangement by which a person with a managed program of self-insurance and
1613     risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
1614     employees for liability or risk that is related to the relationship or employment.
1615          (d) "Self-insurance" does not include an arrangement with an independent contractor.
1616          [(162)] (163) "Sell" means to exchange a contract of insurance:
1617          (a) by any means;
1618          (b) for money or its equivalent; and
1619          (c) on behalf of an insurance company.
1620          [(163)] (164) "Short-term care insurance" means an insurance policy or rider
1621     advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
1622     insurance, but that provides coverage for less than 12 consecutive months for each covered
1623     person.
1624          [(164)] (165) "Significant break in coverage" means a period of 63 consecutive days
1625     during each of which an individual does not have creditable coverage.
1626          [(165)] (166) (a) "Small employer" means, in connection with a health benefit plan and
1627     with respect to a calendar year and to a plan year, an employer who:
1628          (i) (A) employed at least one [employee] but not more than 50 eligible employees on
1629     business days during the preceding calendar year; [and] or
1630          (B) if the employer did not exist for the entirety of the preceding calendar year,
1631     reasonably expects to employ an average of at least one but not more than 50 eligible
1632     employees on business days during the current calendar year;
1633          (ii) employs at least one employee on the first day of the plan year[.]; and
1634          [(b) The number of employees shall:]
1635          [(i) be determined using the method set forth in 26 U.S.C. Sec. 4980H(c)(2); and]
1636          [(ii) include an owner described in Subsection (52)(b)(i).]
1637          (iii) for an employer who has common ownership with one or more other employers, is

1638     treated as a single employer under 26 U.S.C. Sec. 414(b), (c), (m), or (o).
1639          [(c)] (b) "Small employer" does not include a sole proprietor that does not employ at
1640     least one employee.
1641          [(166)] (167) "Special enrollment period," in connection with a health benefit plan, has
1642     the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
1643     Portability and Accountability Act.
1644          [(167)] (168) (a) "Subsidiary" of a person means an affiliate controlled by that person
1645     either directly or indirectly through one or more affiliates or intermediaries.
1646          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1647     shares are owned by that person either alone or with its affiliates, except for the minimum
1648     number of shares the law of the subsidiary's domicile requires to be owned by directors or
1649     others.
1650          [(168)] (169) Subject to Subsection [(89)] (90)(b), "surety insurance" includes:
1651          (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
1652     perform the principal's obligations to a creditor or other obligee;
1653          (b) bail bond insurance; and
1654          (c) fidelity insurance.
1655          [(169)] (170) (a) "Surplus" means the excess of assets over the sum of paid-in capital
1656     and liabilities.
1657          (b) (i) "Permanent surplus" means the surplus of an insurer or organization that is
1658     designated by the insurer or organization as permanent.
1659          (ii) Sections 31A-5-211, 31A-7-201, 31A-8-209, 31A-9-209, and 31A-14-205 require
1660     that insurers or organizations doing business in this state maintain specified minimum levels of
1661     permanent surplus.
1662          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
1663     same as the minimum required capital requirement that applies to stock insurers.
1664          (c) "Excess surplus" means:
1665          (i) for a life insurer, accident and health insurer, health organization, or property and
1666     casualty insurer as defined in Section 31A-17-601, the lesser of:
1667          (A) that amount of an insurer's or health organization's total adjusted capital that
1668     exceeds the product of:

1669          (I) 2.5; and
1670          (II) the sum of the insurer's or health organization's minimum capital or permanent
1671     surplus required under Section 31A-5-211, 31A-9-209, or 31A-14-205; or
1672          (B) that amount of an insurer's or health organization's total adjusted capital that
1673     exceeds the product of:
1674          (I) 3.0; and
1675          (II) the authorized control level RBC as defined in Subsection 31A-17-601(8)(a); and
1676          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
1677     that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1678          (A) 1.5; and
1679          (B) the insurer's total adjusted capital required by Subsection 31A-17-609(1).
1680          [(170)] (171) "Third party administrator" or "administrator" means a person who
1681     collects charges or premiums from, or who, for consideration, adjusts or settles claims of
1682     residents of the state in connection with insurance coverage, annuities, or service insurance
1683     coverage, except:
1684          (a) a union on behalf of its members;
1685          (b) a person administering a:
1686          (i) pension plan subject to the federal Employee Retirement Income Security Act of
1687     1974;
1688          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1689          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1690          (c) an employer on behalf of the employer's employees or the employees of one or
1691     more of the subsidiary or affiliated corporations of the employer;
1692          (d) an insurer licensed under the following, but only for a line of insurance for which
1693     the insurer holds a license in this state:
1694          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1695          (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
1696          (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1697          (iv) Chapter 9, Insurance Fraternals; or
1698          (v) Chapter 14, Foreign Insurers;
1699          (e) a person:

1700          (i) licensed or exempt from licensing under:
1701          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1702     Reinsurance Intermediaries; or
1703          (B) Chapter 26, Insurance Adjusters; and
1704          (ii) whose activities are limited to those authorized under the license the person holds
1705     or for which the person is exempt; or
1706          (f) an institution, bank, or financial institution:
1707          (i) that is:
1708          (A) an institution whose deposits and accounts are to any extent insured by a federal
1709     deposit insurance agency, including the Federal Deposit Insurance Corporation or National
1710     Credit Union Administration; or
1711          (B) a bank or other financial institution that is subject to supervision or examination by
1712     a federal or state banking authority; and
1713          (ii) that does not adjust claims without a third party administrator license.
1714          [(171)] (172) "Title insurance" means the insuring, guaranteeing, or indemnifying of an
1715     owner of real or personal property or the holder of liens or encumbrances on that property, or
1716     others interested in the property against loss or damage suffered by reason of liens or
1717     encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
1718     or unenforceability of any liens or encumbrances on the property.
1719          [(172)] (173) "Total adjusted capital" means the sum of an insurer's or health
1720     organization's statutory capital and surplus as determined in accordance with:
1721          (a) the statutory accounting applicable to the annual financial statements required to be
1722     filed under Section 31A-4-113; and
1723          (b) another item provided by the RBC instructions, as RBC instructions is defined in
1724     Section 31A-17-601.
1725          [(173)] (174) (a) "Trustee" means "director" when referring to the board of directors of
1726     a corporation.
1727          (b) "Trustee," when used in reference to an employee welfare fund, means an
1728     individual, firm, association, organization, joint stock company, or corporation, whether acting
1729     individually or jointly and whether designated by that name or any other, that is charged with
1730     or has the overall management of an employee welfare fund.

1731          [(174)] (175) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
1732     insurer" means an insurer:
1733          (i) not holding a valid certificate of authority to do an insurance business in this state;
1734     or
1735          (ii) transacting business not authorized by a valid certificate.
1736          (b) "Admitted insurer" or "authorized insurer" means an insurer:
1737          (i) holding a valid certificate of authority to do an insurance business in this state; and
1738          (ii) transacting business as authorized by a valid certificate.
1739          [(175)] (176) "Underwrite" means the authority to accept or reject risk on behalf of the
1740     insurer.
1741          [(176)] (177) "Vehicle liability insurance" means insurance against liability resulting
1742     from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
1743     vehicle comprehensive or vehicle physical damage coverage under Subsection [(144)] (145).
1744          [(177)] (178) "Voting security" means a security with voting rights, and includes a
1745     security convertible into a security with a voting right associated with the security.
1746          [(178)] (179) "Waiting period" for a health benefit plan means the period that must
1747     pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
1748     the health benefit plan, can become effective.
1749          [(179)] (180) "Workers' compensation insurance" means:
1750          (a) insurance for indemnification of an employer against liability for compensation
1751     based on:
1752          (i) a compensable accidental injury; and
1753          (ii) occupational disease disability;
1754          (b) employer's liability insurance incidental to workers' compensation insurance and
1755     written in connection with workers' compensation insurance; and
1756          (c) insurance assuring to a person entitled to workers' compensation benefits the
1757     compensation provided by law.
1758          Section 6. Section 31A-2-201.1 is amended to read:
1759          31A-2-201.1. General filing requirements.
1760          Except as otherwise provided in this title, the commissioner may set by rule made in
1761     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, specific

1762     requirements for filing any of the following required by this title:
1763          (1) a form;
1764          (2) a rate; [or]
1765          (3) a report[.]; or
1766          (4) a binder for a health benefit plan or dental policy.
1767          Section 7. Section 31A-2-201.2 is amended to read:
1768          31A-2-201.2. Evaluation of health insurance market.
1769          (1) Each year the commissioner shall:
1770          (a) conduct an evaluation of the state's health insurance market;
1771          (b) report the findings of the evaluation to the Health and Human Services Interim
1772     Committee before [October] December 1 of each year; and
1773          (c) publish the findings of the evaluation on the department website.
1774          (2) The evaluation required by this section shall:
1775          (a) analyze the effectiveness of the insurance regulations and statutes in promoting a
1776     healthy, competitive health insurance market that meets the needs of the state, and includes an
1777     analysis of:
1778          (i) the availability and marketing of individual and group products;
1779          (ii) rate changes;
1780          (iii) coverage and demographic changes;
1781          (iv) benefit trends;
1782          (v) market share changes; and
1783          (vi) accessibility;
1784          (b) assess complaint ratios and trends within the health insurance market, which
1785     assessment shall include complaint data from the Office of Consumer Health Assistance within
1786     the department;
1787          (c) contain recommendations for action to improve the overall effectiveness of the
1788     health insurance market, administrative rules, and statutes; and
1789          (d) include claims loss ratio data for each health insurance company doing business in
1790     the state.
1791          (3) When preparing the evaluation and report required by this section, the
1792     commissioner may seek the input of insurers, employers, insured persons, providers, and others

1793     with an interest in the health insurance market.
1794          (4) The commissioner may adopt administrative rules for the purpose of collecting the
1795     data required by this section, taking into account the business confidentiality of the insurers.
1796          (5) Records submitted to the commissioner under this section shall be maintained by
1797     the commissioner as protected records under Title 63G, Chapter 2, Government Records
1798     Access and Management Act.
1799          Section 8. Section 31A-2-204 is amended to read:
1800          31A-2-204. Conducting examinations.
1801          (1) As used in this section, "work papers" means a record that is created or relied upon:
1802          (a) during the course of an examination conducted under Section 31A-2-203; or
1803          (b) in drafting an examination report.
1804          [(1)] (2) (a) For each examination under Section 31A-2-203, the commissioner shall
1805     issue an order:
1806          (i) stating the scope of the examination; and
1807          (ii) designating the examiner in charge.
1808          (b) The commissioner need not give advance notice of an examination to an examinee.
1809          (c) The examiner in charge shall give the examinee a copy of the order issued under
1810     this Subsection [(1)] (2).
1811          (d) (i) The commissioner may alter the scope or nature of an examination at any time
1812     without advance notice to the examinee.
1813          (ii) If the commissioner amends an order described in this Subsection [(1)] (2), the
1814     commissioner shall provide a copy of any amended order to the examinee.
1815          (e) Statements in the commissioner's examination order concerning examination scope
1816     are for the examiner's guidance only.
1817          (f) Examining relevant matters not mentioned in an order issued under this Subsection
1818     [(1)] (2) is not a violation of this title.
1819          [(2)] (3) The commissioner shall, whenever practicable, cooperate with the insurance
1820     regulators of other states by conducting joint examinations of:
1821          (a) multistate insurers doing business in this state; or
1822          (b) other multistate licensees doing business in this state.
1823          [(3)] (4) An examiner authorized by the commissioner shall, when necessary to the

1824     purposes of the examination, have access at all reasonable hours to the premises and to any
1825     books, records, files, securities, documents, or property of:
1826          (a) the examinee; and
1827          (b) any of the following if the premises, books, records, files, securities, documents, or
1828     property relate to the affairs of the examinee:
1829          (i) an officer of the examinee;
1830          (ii) any other person who:
1831          (A) has executive authority over the examinee; or
1832          (B) is in charge of any segment of the examinee's affairs; or
1833          (iii) any affiliate of the examinee under Subsection 31A-2-203(1)(b).
1834          [(4)] (5) (a) The officers, employees, and agents of the examinee and of persons under
1835     Subsection 31A-2-203(1)(b) shall comply with every reasonable request of the examiners for
1836     assistance in any matter relating to the examination.
1837          (b) A person may not obstruct or interfere with the examination except by legal
1838     process.
1839          [(5)] (6) If the commissioner finds the accounts or records to be inadequate for proper
1840     examination of the condition and affairs of the examinee or improperly kept or posted, the
1841     commissioner may employ experts to rewrite, post, or balance the accounts or records at the
1842     expense of the examinee.
1843          [(6)] (7) (a) The examiner in charge of an examination shall make a report of the
1844     examination no later than 60 days after the completion of the examination that shall include:
1845          (i) the information and analysis ordered under Subsection [(1)] (2); and
1846          (ii) the examiner's recommendations.
1847          (b) At the option of the examiner in charge, preparation of the report may include
1848     conferences with the examinee or representatives of the examinee.
1849          (c) The report is confidential until the report becomes a public document under
1850     Subsection [(7)] (8), except the commissioner may use information from the report as a basis
1851     for action under Chapter 27a, Insurer Receivership Act.
1852          [(7)] (8) (a) The commissioner shall serve a copy of the examination report described
1853     in Subsection [(6)] (7) upon the examinee.
1854          (b) Within 20 days after service, the examinee shall:

1855          (i) accept the examination report as written; or
1856          (ii) request agency action to modify the examination report.
1857          (c) The report is considered accepted under this Subsection [(7)] (8) if the examinee
1858     does not file a request for agency action to modify the report within 20 days after service of the
1859     report.
1860          (d) If the examination report is accepted:
1861          (i) the examination report immediately becomes a public document; and
1862          (ii) the commissioner shall distribute the examination report to all jurisdictions in
1863     which the examinee is authorized to do business.
1864          (e) (i) Any adjudicative proceeding held as a result of the examinee's request for
1865     agency action shall, upon the examinee's demand, be closed to the public, except that the
1866     commissioner need not exclude any participating examiner from this closed hearing.
1867          (ii) Within 20 days after the hearing held under this Subsection [(7)] (8)(e), the
1868     commissioner shall:
1869          (A) adopt the examination report with any necessary modifications; and
1870          (B) serve a copy of the adopted report upon the examinee.
1871          (iii) Unless the examinee seeks judicial relief, the adopted examination report:
1872          (A) shall become a public document 10 days after service; and
1873          (B) may be distributed as described in this section.
1874          (f) Notwithstanding Title 63G, Chapter 4, Administrative Procedures Act, to the extent
1875     that this section is in conflict with Title 63G, Chapter 4, Administrative Procedures Act, this
1876     section governs:
1877          (i) a request for agency action under this section; or
1878          (ii) adjudicative proceeding under this section.
1879          [(8)] (9) The examinee shall promptly furnish copies of the adopted examination report
1880     described in Subsection [(7)] (8) to each member of the examinee's board.
1881          [(9)] (10) After an examination report becomes a public document under Subsection
1882     [(7)] (8), the commissioner may furnish, without cost or at a reasonable price set under Section
1883     31A-3-103, a copy of the examination report to interested persons, including:
1884          (a) a member of the board of the examinee; or
1885          (b) one or more newspapers in this state.

1886          [(10)] (11) (a) In a proceeding by or against the examinee, or any officer or agent of the
1887     examinee, the examination report as adopted by the commissioner is admissible as evidence of
1888     the facts stated in the report.
1889          (b) In any proceeding commenced under Chapter 27a, Insurer Receivership Act, the
1890     examination report, whether adopted by the commissioner or not, is admissible as evidence of
1891     the facts stated in the examination report.
1892          (12) Work papers are protected records under Title 63G, Chapter 2, Government
1893     Records Access and Management Act.
1894          Section 9. Section 31A-2-403 is amended to read:
1895          31A-2-403. Title and Escrow Commission created.
1896          (1) (a) Subject to Subsection (1)(b), there is created within the department the Title and
1897     Escrow Commission that is comprised of five members appointed by the governor with the
1898     consent of the Senate as follows:
1899          (i) except as provided in Subsection (1)(c), two members shall be employees of a title
1900     insurer;
1901          (ii) two members shall:
1902          (A) be employees of a Utah agency title insurance producer;
1903          (B) be or have been licensed under the title insurance line of authority;
1904          (C) as of the day on which the member is appointed, be or have been licensed with the
1905     title examination or escrow subline of authority for at least five years; and
1906          (D) as of the day on which the member is appointed, not be from the same county as
1907     another member appointed under this Subsection (1)(a)(ii); and
1908          (iii) one member shall be a member of the general public from any county in the state.
1909          (b) No more than one commission member may be appointed from a single company
1910     or an affiliate or subsidiary of the company.
1911          (c) If the governor is unable to identify more than one individual who is an employee
1912     of a title insurer and willing to serve as a member of the commission, the commission shall
1913     include the following members in lieu of the members described in Subsection (1)(a)(i):
1914          (i) one member who is an employee of a title insurer; and
1915          (ii) one member who is an employee of a Utah agency title insurance producer.
1916          (2) (a) Subject to Subsection (2)(c), a commission member shall file with the

1917     commissioner a disclosure of any position of employment or ownership interest that the
1918     commission member has with respect to a person that is subject to the jurisdiction of the
1919     commissioner.
1920          (b) The disclosure statement required by this Subsection (2) shall be:
1921          (i) filed by no later than the day on which the person begins that person's appointment;
1922     and
1923          (ii) amended when a significant change occurs in any matter required to be disclosed
1924     under this Subsection (2).
1925          (c) A commission member is not required to disclose an ownership interest that the
1926     commission member has if the ownership interest is in a publicly traded company or held as
1927     part of a mutual fund, trust, or similar investment.
1928          (3) (a) Except as required by Subsection (3)(b), as terms of current commission
1929     members expire, the governor shall appoint each new commission member to a four-year term
1930     ending on June 30.
1931          (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1932     time of appointment, adjust the length of terms to ensure that the terms of the commission
1933     members are staggered so that approximately half of the members appointed under Subsection
1934     (1)(a)(i) and half of the members appointed under Subsection (1)(a)(ii) are appointed every two
1935     years.
1936          (c) A commission member may not serve more than one consecutive term.
1937          (d) When a vacancy occurs in the membership for any reason, the governor, with the
1938     consent of the Senate, shall appoint a replacement for the unexpired term.
1939          (e) Notwithstanding the other provisions of this Subsection (3), a commission member
1940     serves until a successor is appointed by the governor with the consent of the Senate.
1941          (4) A commission member may not receive compensation or benefits for the
1942     commission member's service, but may receive per diem and travel expenses in accordance
1943     with:
1944          (a) Section 63A-3-106;
1945          (b) Section 63A-3-107; and
1946          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
1947     63A-3-107.

1948          (5) Members of the commission shall annually select one commission member to serve
1949     as chair.
1950          (6) (a) The commission shall meet at least monthly. Notwithstanding Section
1951     52-4-207, a commission member shall physically attend a regularly scheduled monthly meeting
1952     of the commission and may not attend through electronic means. A commission member may
1953     attend subcommittee meetings, emergency meetings, or other not regularly scheduled meetings
1954     electronically in accordance with Section 52-4-207.
1955          (b) The commissioner may call additional meetings:
1956          (i) at the commissioner's discretion;
1957          (ii) upon the request of the chair of the commission; or
1958          (iii) upon the written request of three or more commission members.
1959          (c) (i) Three commission members constitute a quorum for the transaction of business.
1960          (ii) The action of a majority of the commission members when a quorum is present is
1961     the action of the commission.
1962          (7) The commissioner shall staff the commission.
1963          Section 10. Section 31A-3-303 is amended to read:
1964          31A-3-303. Payment of tax.
1965          (1) (a) An insurer, the producers involved in the transaction, and the policyholder are
1966     jointly and severally liable for the payment of the taxes required under Section 31A-3-301.
1967          (b) The policyholder's liability for payment of the premium tax under Section
1968     31A-3-301 ends when the policyholder pays the tax to a producer or an insurer.
1969          (c) The insurer and the producers involved in the transaction are jointly and severally
1970     liable for the payment of the additional tax required under Section 31A-3-302.
1971          (d) Except for the tax under Section 31A-3-302, the policyholder shall pay a tax under
1972     this part and shall be billed specifically for the tax when billed for the premium.
1973          (e) Except for the tax imposed under Section 31A-3-302, absorption of the tax by the
1974     producer or insurer is an unfair method of competition under Sections 31A-23a-402 and
1975     31A-23a-402.5.
1976          (2) (a) The commissioner shall by rule prescribe accounting and reporting forms and
1977     procedures for insurers, producers, and policyholders to use in determining the amount of taxes
1978     owed under this part, and the manner and time of payment.

1979          (b) If a tax is not paid within the time prescribed under the commissioner's rule, a
1980     penalty shall be imposed of 25% of the tax due, plus 1-1/2% per month from the time of
1981     default until full payment of the tax.
1982          (3) Upon making a record of its actions, and upon reasonable cause shown, the
1983     commissioner may waive, reduce, or compromise any of the penalties or interest imposed
1984     under this part.
1985          [(4) Subject to Section 31A-3-305, if a policy covers risks that are only partially
1986     located in this state, for computation of tax under this part the premium shall be reasonably
1987     allocated among the states on the basis of risk locations. However, the premiums with respect
1988     to surplus lines insurance received in this state by a surplus lines producer or charged on
1989     policies written or negotiated in or from this state are taxable in full under this part, subject to a
1990     credit for any tax actually paid in another state to the extent of a reasonable allocation on the
1991     basis of risk locations.]
1992          (4) When Utah is the home state, premiums for surplus lines insurance are taxable in
1993     full.
1994          (5) Subject to Section 31A-3-305, the premium taxes collected under this part by a
1995     producer or by an insurer are the property of this state.
1996          (6) If the property of a producer is seized under any process in a court in this state, or if
1997     a producer's business is suspended by the action of creditors or put into the hands of an
1998     assignee, receiver, or trustee, the taxes and penalties due this state under this part are preferred
1999     claims and the state is to that extent a preferred creditor.
2000          Section 11. Section 31A-3-304 is amended to read:
2001          31A-3-304. Annual fees -- Other taxes or fees prohibited -- Captive Insurance
2002     Restricted Account.
2003          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
2004     to obtain or renew a certificate of authority.
2005          (b) The commissioner shall:
2006          (i) determine the annual fee pursuant to Section 31A-3-103; and
2007          (ii) consider whether the annual fee is competitive with fees imposed by other states on
2008     captive insurance companies.
2009          (2) A captive insurance company that fails to pay the fee required by this section is

2010     subject to the relevant sanctions of this title.
2011          (3) (a) A captive insurance company that pays one of the following fees is exempt from
2012     Title 59, Chapter 7, Corporate Franchise and Income Taxes, and Title 59, Chapter 9, Taxation
2013     of Admitted Insurers:
2014          (i) a fee under this section;
2015          (ii) a fee under Chapter 37, Captive Insurance Companies Act; or
2016          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
2017     Act.
2018          (b) The state or a county, city, or town within the state may not levy or collect an
2019     occupation tax or other fee or charge not described in Subsections (3)(a)(i) through (iii) against
2020     a captive insurance company.
2021          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
2022     against a captive insurance company.
2023          (4) A captive insurance company shall pay the fee imposed by this section to the
2024     commissioner by June 1 of each year.
2025          (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
2026     deposited into the Captive Insurance Restricted Account.
2027          (b) There is created in the General Fund a restricted account known as the "Captive
2028     Insurance Restricted Account."
2029          (c) The Captive Insurance Restricted Account shall consist of the fees described in
2030     Subsection (3)(a).
2031          (d) The commissioner shall administer the Captive Insurance Restricted Account.
2032     Subject to appropriations by the Legislature, the commissioner shall use the money deposited
2033     into the Captive Insurance Restricted Account to:
2034          (i) administer and enforce:
2035          (A) Chapter 37, Captive Insurance Companies Act; and
2036          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
2037          (ii) promote the captive insurance industry in Utah.
2038          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
2039     except that at the end of each fiscal year, money received by the commissioner in excess of the
2040     following shall be treated as free revenue in the General Fund:

2041          [(i) for fiscal year 2015-2016, in excess of $1,250,000;]
2042          [(ii) for fiscal year 2016-2017, in excess of $1,250,000; and]
2043          [(iii)] (i) for fiscal year 2017-2018 and subsequent fiscal years, in excess of
2044     $1,850,000[.]; and
2045          (ii) for fiscal year 2018-2019 and subsequent fiscal years, in excess of $1,600,000.
2046          Section 12. Section 31A-6a-101 is amended to read:
2047          31A-6a-101. Definitions.
2048          As used in this chapter:
2049          (1) (a) "Incidental cost" means a cost, incurred by a warranty holder in relation to a
2050     vehicle protection product warranty, that is in addition to the cost of purchasing the warranty.
2051          (b) "Incidental cost" includes an insurance policy deductible, a rental vehicle charge,
2052     the difference between the actual value of the stolen vehicle at the time of theft and the cost of
2053     a replacement vehicle, sales tax, a registration fee, a transaction fee, a mechanical inspection
2054     fee, or damage a theft causes to a vehicle.
2055          [(1)] (2) "Mechanical breakdown insurance" means a policy, contract, or agreement
2056     issued by an insurance company that has complied with either Chapter 5, Domestic Stock and
2057     Mutual Insurance Corporations, or Chapter 14, Foreign Insurers, that undertakes to perform or
2058     provide repair or replacement service on goods or property, or indemnification for repair or
2059     replacement service, for the operational or structural failure of the goods or property due to a
2060     defect in materials, workmanship, or normal wear and tear.
2061          [(2)] (3) "Nonmanufacturers' parts" means replacement parts not made for or by the
2062     original manufacturer of the goods commonly referred to as "after market parts."
2063          [(3)] (4) (a) "Road hazard" means a hazard that is encountered while driving a motor
2064     vehicle.
2065          (b) "Road hazard" includes potholes, rocks, wood debris, metal parts, glass, plastic,
2066     curbs, or composite scraps.
2067          [(4)] (5) (a) "Service contract" means a contract or agreement to perform or reimburse
2068     for the repair or maintenance of goods or property, for their operational or structural failure due
2069     to a defect in materials, workmanship, normal wear and tear, power surge or interruption, or
2070     accidental damage from handling, with or without additional provision for incidental payment
2071     of indemnity under limited circumstances, including towing, providing a rental car, providing

2072     emergency road service, and covering food spoilage.
2073          (b) "Service contract" does not include:
2074          (i) mechanical breakdown insurance; or
2075          (ii) a prepaid contract of limited duration that provides for scheduled maintenance
2076     only, regardless of whether the contract is executed before, on, or after May 9, 2017.
2077          (c) "Service contract" includes any contract or agreement to perform or reimburse the
2078     service contract holder for any one or more of the following services:
2079          (i) the repair or replacement of tires, wheels, or both on a motor vehicle damaged as a
2080     result of coming into contact with a road hazard;
2081          (ii) the removal of dents, dings, or creases on a motor vehicle that can be repaired using
2082     the process of paintless dent removal without affecting the existing paint finish and without
2083     replacing vehicle body panels, sanding, bonding, or painting;
2084          (iii) the repair of chips or cracks in or the replacement of a motor vehicle windshield as
2085     a result of damage caused by a road hazard, that is primary to the coverage offered by the motor
2086     vehicle owner's motor vehicle insurance policy; or
2087          (iv) the replacement of a motor vehicle key or key-fob if the key or key-fob becomes
2088     inoperable, lost, or stolen, except that the replacement of lost or stolen property is limited to
2089     only the replacement of a lost or stolen motor vehicle key or key-fob.
2090          [(5)] (6) "Service contract holder" or "contract holder" means a person who purchases a
2091     service contract.
2092          [(6)] (7) "Service contract provider" means a person who issues, makes, provides,
2093     administers, sells or offers to sell a service contract, or who is contractually obligated to
2094     provide service under a service contract.
2095          [(7)] (8) "Service contract reimbursement policy" or "reimbursement insurance policy"
2096     means a policy of insurance providing coverage for all obligations and liabilities incurred by
2097     the service contract provider or warrantor under the terms of the service contract or vehicle
2098     protection product warranty issued by the provider or warrantor.
2099          [(8)] (9) (a) "Vehicle protection product" means a device or system that is:
2100          (i) installed on or applied to a motor vehicle; and
2101          (ii) designed to:
2102          (A) prevent the theft of the vehicle[.]; or

2103          (B) if the vehicle is stolen, aid in the recovery of the vehicle.
2104          (b) "Vehicle protection product" includes:
2105          (i) a vehicle protection product warranty;
2106          (ii) an alarm system;
2107          (iii) a body part marking product;
2108          (iv) a steering lock;
2109          (v) a window etch product;
2110          (vi) a pedal and ignition lock;
2111          (vii) a fuel and ignition kill switch; and
2112          (viii) an electronic, radio, or satellite tracking device.
2113          [(9)] (10) "Vehicle protection product warranty" means a written agreement by a
2114     warrantor that provides that if the vehicle protection product fails to prevent the theft of the
2115     motor vehicle, [that] or aid in the recovery of the motor vehicle within a time period specified
2116     in the warranty, not exceeding 30 days after the day on which the motor vehicle is reported
2117     stolen, the warrantor will reimburse the warranty holder [under the warranty in a fixed amount]
2118     for incidental costs specified in the warranty, not [to exceed $5,000] exceeding $5,000, or in a
2119     specified fixed amount not exceeding $5,000.
2120          [(10)] (11) "Warrantor" means a person who is contractually obligated to the warranty
2121     holder under the terms of a vehicle protection product warranty.
2122          [(11)] (12) "Warranty holder" means the person who purchases a vehicle protection
2123     product, any authorized transferee or assignee of the purchaser, or any other person legally
2124     assuming the purchaser's rights under the vehicle protection product warranty.
2125          Section 13. Section 31A-6a-104 is amended to read:
2126          31A-6a-104. Required disclosures.
2127          (1) A [service contract] reimbursement insurance policy insuring a service contract or a
2128     vehicle protection product warranty that is issued, sold, or offered for sale in this state shall
2129     conspicuously state that, upon failure of the service contract provider or warrantor to perform
2130     under the contract, the issuer of the policy shall:
2131          (a) pay on behalf of the service contract provider or warrantor any sums the service
2132     contract provider or warrantor is legally obligated to pay according to the service contract
2133     provider's or warrantor's contractual obligations under the service contract or a vehicle

2134     protection product warranty issued or sold by the service contract provider or warrantor; or
2135          (b) provide the service which the service contract provider is legally obligated to
2136     perform, according to the service contract provider's contractual obligations under the service
2137     contract issued or sold by the service contract provider.
2138          (2) (a) A service contract may not be issued, sold, or offered for sale in this state unless
2139     the service contract contains the following statements in substantially the following form:
2140          (i) "Obligations of the provider under this service contract are guaranteed under a
2141     service contract reimbursement insurance policy. Should the provider fail to pay or provide
2142     service on any claim within 60 days after proof of loss has been filed, the contract holder is
2143     entitled to make a claim directly against the Insurance Company."; [and]
2144          (ii) "This service contract or warranty is subject to limited regulation by the Utah
2145     Insurance Department. To file a complaint, contact the Utah Insurance Department."; and
2146          (iii) A service contract or reimbursement insurance policy may not be issued, sold, or
2147     offered for sale in this state unless the contract contains a statement in substantially the
2148     following form, "Coverage afforded under this contract is not guaranteed by the Property and
2149     Casualty Guaranty Association."
2150          (b) A vehicle protection product warranty may not be issued, sold, or offered for sale in
2151     this state unless the vehicle protection product warranty contains the following statements in
2152     substantially the following form:
2153          (i) "Obligations of the warrantor under this vehicle protection product warranty are
2154     guaranteed under a reimbursement insurance policy. Should the warrantor fail to pay on any
2155     claim within 60 days after proof of loss has been filed, the warranty holder is entitled to make a
2156     claim directly against the Insurance Company."; [and]
2157          (ii) "This vehicle protection product warranty is subject to limited regulation by the
2158     Utah Insurance Department. To file a complaint, contact the Utah Insurance Department."; and
2159          (iii) as applicable:
2160          (A) "The warrantor under this vehicle protection product warranty will reimburse the
2161     warranty holder as specified in the warranty upon the theft of the vehicle"; or
2162          (B) "The warrantor under this vehicle protection product warranty will reimburse the
2163     warranty holder as specified in the warranty and at the end of the time period specified in the
2164     warranty if, following the theft of the vehicle, the stolen vehicle is not recovered within a time

2165     period specified in the warranty, not to exceed 30 days after the day on which the vehicle is
2166     reported stolen."
2167          (c) A vehicle protection product warranty, or reimbursement insurance policy, may not
2168     be issued, sold, or offered for sale in this state unless the warranty contains a statement in
2169     substantially the following form, "Coverage afforded under this warranty is not guaranteed by
2170     the Property and Casualty Guaranty Association."
2171          (3) A service contract and a vehicle protection product warranty shall:
2172          (a) conspicuously state the name, address, and a toll free claims service telephone
2173     number of the reimbursement insurer;
2174          (b) (i) identify the service contract provider, the seller, and the service contract holder;
2175     or
2176          (ii) identify the warrantor, the seller, and the warranty holder;
2177          (c) conspicuously state the total purchase price and the terms under which the service
2178     contract or warranty is to be paid;
2179          (d) conspicuously state the existence of any deductible amount;
2180          (e) specify the merchandise, service to be provided, and any limitation, exception, or
2181     exclusion;
2182          (f) state a term, restriction, or condition governing the transferability of the service
2183     contract or warranty; and
2184          (g) state a term, restriction, or condition that governs cancellation of the service
2185     contract as provided in Sections 31A-21-303 through 31A-21-305 by either the contract holder
2186     or service contract provider.
2187          (4) If prior approval of repair work is required, a service contract shall conspicuously
2188     state the procedure for obtaining prior approval and for making a claim, including:
2189          (a) a toll free telephone number for claim service; and
2190          (b) a procedure for obtaining reimbursement for emergency repairs performed outside
2191     of normal business hours.
2192          (5) A preexisting condition clause in a service contract shall specifically state which
2193     preexisting condition is excluded from coverage.
2194          (6) (a) Except as provided in Subsection (6)(c), a service contract shall state the
2195     conditions upon which the use of a nonmanufacturers' part is allowed.

2196          (b) A condition described in Subsection (6)(a) shall comply with applicable state and
2197     federal laws.
2198          (c) This Subsection (6) does not apply to a home warranty contract.
2199          (7) This section applies to a vehicle protection product warranty, except for the
2200     requirements of Subsections (3)(d) and (g), (4), (5), and (6). The department may make rules
2201     in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement
2202     the application of this section to a vehicle protection product warranty.
2203          (8) (a) As used in this Subsection (8), "conspicuous statement" means a disclosure that:
2204          (i) appears in all-caps, bold, and 14-point font; and
2205          (ii) provides a space to be initialed by the consumer:
2206          (A) immediately below the printed disclosure; and
2207          (B) at or before the time the consumer purchases the vehicle protection product.
2208          [(8)] (b) A vehicle protection product warranty shall contain a conspicuous statement
2209     in substantially the following form: "Purchase of this product is optional and is not required in
2210     order to finance, lease, or purchase a motor vehicle."
2211          (9) If a vehicle protection product warranty states that the warrantor will reimburse the
2212     warranty holder for incidental costs, the vehicle protection product warranty shall state how
2213     incidental costs paid under the warranty are calculated.
2214          (10) If a vehicle protection product warranty states that the warrantor will reimburse
2215     the warranty holder in a fixed amount, the vehicle protection product warranty shall state the
2216     fixed amount.
2217          Section 14. Section 31A-6a-105 is amended to read:
2218          31A-6a-105. Prohibited acts.
2219          (1) Except as provided in Subsection 31A-6a-104(2), a service contract provider or
2220     warrantor may not use in [its] the service contract provider or warrantor's name, a contract, or
2221     literature:
2222          (a) any of the following words:
2223          (i) "insurance";
2224          (ii) "casualty";
2225          (iii) "surety";
2226          (iv) "mutual"; or

2227          (v) another word descriptive of the insurance, casualty, or surety business; or
2228          (b) a name deceptively similar to the name or description of:
2229          (i) an insurance or surety corporation; or
2230          (ii) another service contract provider.
2231          (2) A service contract provider [or the], a service contract provider's representative, a
2232     warrantor, or a warrantor's representative may not:
2233          (a) make, permit, or cause to be made a false or misleading statement in connection
2234     with the sale, offer to sell, or advertisement of a service contract or vehicle protection product;
2235     or
2236          (b) deliberately omit a material statement that would be considered misleading if
2237     omitted, in connection with the sale, offer to sell, or advertisement of a service contract or
2238     vehicle protection product.
2239          (3) A bank, savings and loan association, insurance company, or other lending
2240     institution may not require the purchase of a service contract as a condition of a loan.
2241          (4) Except for a bank, savings and loan association, industrial bank, or credit union, a
2242     service contract provider may not sell, or be the obligated party for:
2243          (a) a guaranteed asset protection waiver, unless registered with the commissioner under
2244     Chapter 6b, Guaranteed Asset Protection Waiver Act;
2245          (b) a debt cancellation agreement, unless licensed by the commissioner; or
2246          (c) a debt suspension agreement, unless licensed by the commissioner.
2247          (5) A warrantor or [its] the warrantor's representative may not:
2248          (a) require the purchase of a vehicle protection product as a condition of the financing,
2249     lease, or purchase of a motor vehicle[.]; or
2250          (b) sell a vehicle protection product to a consumer before providing the consumer, for
2251     review, a copy of the vehicle protection product warranty that is filed with the Department of
2252     Insurance.
2253          Section 15. Section 31A-6a-111 is repealed and reenacted to read:
2254          31A-6a-111. Vehicle protection product warranty requirements.
2255          (1) A warrantor shall make a reimbursement promised under a vehicle protection
2256     product warranty as specified in the warranty, regardless of, and not contingent upon, the
2257     payment of a benefit provided for under the warranty holder's primary vehicle insurance or any

2258     other contract.
2259          (2) Ŝ→ (a) ←Ŝ If a vehicle protection product is represented as preventing the theft of a
2259a     vehicle,
2260     the vehicle protection product warranty shall, at a minimum, provide for reimbursement of
2261     damage a theft causes to the motor vehicle up to $5,000, if the vehicle is recovered within the
2262     time period specified in the warranty following the theft of the vehicle, not to exceed 30 days
2263     after the day on which the vehicle is reported stolen.
2263a     Ŝ→ (b) If a vehicle protection product is represented as aiding in the recovery of a stolen
2263b     vehicle, the vehicle protection product warranty shall provide for reimbursement of the vehicle
2263c     up to $5,000, if the vehicle is not recovered within the time period specified in the warranty
2263d     following the theft of the vehicle, not to exceed 30 days after the day on which the vehicle is
2263e     reported stolen. ←Ŝ
2264          Section 16. Section 31A-8-104 is amended to read:
2265          31A-8-104. Determination of ability to provide services.
2266          (1) The commissioner may not issue a certificate of authority to an applicant for a
2267     certificate of authority under this chapter unless the applicant demonstrates to the
2268     commissioner [has determined] that the applicant has:
2269          (a) [demonstrated] the willingness and potential ability to furnish the proposed health
2270     care services in a manner to assure both availability and accessibility of adequate personnel and
2271     facilities and continuity of service; and
2272          (b) arrangements for an ongoing quality of health care assurance program concerning
2273     health care processes and outcomes[, established in accordance with rules adopted by the
2274     director of the Department of Health based upon prevailing standards for quality assurance for
2275     other forms of health care delivery in this state; and].
2276          [(c) a procedure, established in accordance with rules of the director of the Department
2277     of Health, to develop, compile, evaluate, and report statistics relating to the cost of its
2278     operations, the pattern of utilization of its services, the availability and accessibility of its
2279     services, and such other matters as may be reasonably required by the director of the
2280     Department of Health.]
2281          [(2) Upon receipt of an application for a certificate of authority under this chapter, the
2282     commissioner shall transmit a copy of the application and accompanying documents to the
2283     director of the Department of Health. Upon receipt of the application, the director of the
2284     Department of Health shall review the application, investigate the surrounding facts and
2285     circumstances, and make a finding concerning whether the applicant satisfies the requirements
2286     of Subsection (1). The director of the Department of Health is considered to have found the
2287     applicant to comply with Subsection (1) unless he delivers to the commissioner a finding of
2288     noncompliance within 90 days after receiving the application from the commissioner.]
2289          [(3) In determining whether the requirements of Subsection (1) are satisfied, the
2290     commissioner shall rely on the findings of the director of the Department of Health delivered to
2291     the commissioner in accordance with Subsection (2).]
2292          [(4) A finding of noncompliance with Subsection (1) shall specify in what respects the
2293     applicant is deficient in meeting the requirements of Subsection (1).]
2294          (2) (a) In accordance with Sections 31A-2-203 and 31A-2-204, the commissioner may
2295     order an independent audit or examination by one or more technical experts to determine an
2296     applicant's ability to provide the proposed health care services as described in Subsection (1).
2297          (b) In accordance with Section 31A-2-205, an applicant shall reimburse the
2298     commissioner for the reasonable cost of an independent audit or examination.
2299          [(5) An organization's certificate of authority issued under this chapter is conclusive
2300     evidence of compliance with Subsection (1), as to the services authorized to be performed
2301     under the certificate of authority, except in a proceeding by the state against the organization.]
2302          (3) Licensing under this chapter does not exempt an organization from any licensing
2303     requirement applicable under Title 26, Chapter 21, Health Care Facility Licensing and
2304     Inspection Act.
2305          Section 17. Section 31A-8a-102 is amended to read:
2306          31A-8a-102. Definitions.
2307          [For purposes of] As used in this chapter:
2308          (1) "Fee" means any periodic charge for use of a discount program.
2309          (2) "Health care provider" means a health care provider as defined in Section
2310     78B-3-403, with the exception of "licensed athletic trainer," who:
2311          (a) is practicing within the scope of the provider's license; and
2312          (b) has agreed either directly or indirectly, by contract or any other arrangement with a
2313     health discount program operator, to provide a discount to enrollees of a health discount
2314     program.
2315          (3) (a) "Health discount program" means a business arrangement or contract in which a
2316     person pays fees, dues, charges, or other consideration in exchange for a program that provides
2317     access to health care providers who agree to provide a discount for health care services.
2318          (b) "Health discount program" does not include a program that does not charge a
2319     membership fee or require other consideration from the member to use the program's discounts

2320     for health services.
2321          (4) "Health discount program marketer" means a person, including a private label
2322     entity, that markets, promotes, sells, or distributes a health discount program but does not
2323     operate a health discount program.
2324          (5) "Health discount program operator" means a person that provides a health discount
2325     program by entering into a contract or agreement, directly or indirectly, with a person or
2326     persons in this state who agree to provide discounts for health care services to enrollees of the
2327     health discount program and determines the charge to members.
2328          (6) "Marketing" means making or causing to be made any communication that contains
2329     information that relates to a product or contract regulated under this chapter.
2330          [(6)] (7) "Value-added benefit" means a discount offering with no additional charge
2331     made by a health insurer or health maintenance organization that is licensed under this title, in
2332     connection with existing contracts with the health insurer or health maintenance organization.
2333          Section 18. Section 31A-15-103 is amended to read:
2334          31A-15-103. Surplus lines insurance -- Unauthorized insurers.
2335          (1) Notwithstanding Section 31A-15-102, [a foreign insurer that has not obtained a
2336     certificate of authority to do business in this state under Section 31A-14-202 may negotiate for
2337     and] when this state is the home state as defined in Section 31A-3-305, a nonadmitted insurer
2338     may make an insurance contract [with] for coverage of a person in this state and on a risk
2339     located in this state, subject to the limitations and requirements of this section.
2340          (2) (a) For a contract made under this section, the insurer may, in this state:
2341          (i) inspect the risks to be insured;
2342          (ii) collect premiums;
2343          (iii) adjust losses; and
2344          (iv) do another act reasonably incidental to the contract.
2345          (b) An act described in Subsection (2)(a) may be done through:
2346          (i) an employee; or
2347          (ii) an independent contractor.
2348          (3) (a) Subsections (1) and (2) do not permit a person to solicit business in this state on
2349     behalf of an insurer that has no certificate of authority.
2350          (b) Insurance placed with a nonadmitted insurer shall be placed [with] by a surplus

2351     lines producer licensed under Chapter 23a, Insurance Marketing - Licensing Producers,
2352     Consultants, and Reinsurance Intermediaries.
2353          (c) The commissioner may by rule prescribe how a surplus lines producer may:
2354          (i) pay or permit the payment, commission, or other remuneration on insurance placed
2355     by the surplus lines producer under authority of the surplus lines producer's license to one
2356     holding a license to act as an insurance producer; and
2357          (ii) advertise the availability of the surplus lines producer's services in procuring, on
2358     behalf of a person seeking insurance, a contract with a nonadmitted insurer.
2359          (4) For a contract made under this section, a nonadmitted insurer is subject to Sections
2360     31A-23a-402, 31A-23a-402.5, and 31A-23a-403 and the rules adopted under those sections.
2361          (5) A nonadmitted insurer may not issue workers' compensation insurance coverage to
2362     an employer located in this state, except for stop loss coverage issued to an employer securing
2363     workers' compensation under Subsection 34A-2-201(2).
2364          (6) (a) The commissioner may by rule prohibit making a contract under Subsection (1)
2365     for a specified class of insurance if authorized insurers provide an established market for the
2366     class in this state that is adequate and reasonably competitive.
2367          (b) The commissioner may by rule place a restriction or a limitation on and create
2368     special procedures for making a contract under Subsection (1) for a specified class of insurance
2369     if:
2370          (i) there have been abuses of placements in the class; or
2371          (ii) the policyholders in the class, because of limited financial resources, business
2372     experience, or knowledge, cannot protect their own interests adequately.
2373          (c) The commissioner may prohibit an individual insurer from making a contract under
2374     Subsection (1) and all insurance producers from dealing with the insurer if:
2375          (i) the insurer willfully violates:
2376          (A) this section;
2377          (B) Section 31A-4-102, 31A-23a-402, 31A-23a-402.5, or 31A-26-303; or
2378          (C) a rule adopted under a section listed in Subsection (6)(c)(i)(A) or (B);
2379          (ii) the insurer fails to pay the fees and taxes specified under Section 31A-3-301; or
2380          (iii) the commissioner has reason to believe that the insurer is:
2381          (A) in an unsound condition;

2382          (B) operated in a fraudulent, dishonest, or incompetent manner; or
2383          (C) in violation of the law of its domicile.
2384          (d) (i) The commissioner may issue one or more lists of [unauthorized] nonadmitted
2385     foreign insurers whose:
2386          (A) solidity the commissioner doubts; or
2387          (B) practices the commissioner considers objectionable.
2388          (ii) The commissioner shall issue one or more lists of [unauthorized] nonadmitted
2389     foreign insurers the commissioner considers to be reliable and solid.
2390          (iii) In addition to the lists described in Subsections (6)(d)(i) and (ii), the commissioner
2391     may issue other relevant evaluations of [unauthorized] nonadmitted insurers.
2392          (iv) An action may not lie against the commissioner or an employee of the department
2393     for a written or oral communication made in, or in connection with the issuance of, a list or
2394     evaluation described in this Subsection (6)(d).
2395          (e) A foreign [unauthorized] nonadmitted insurer shall be listed on the commissioner's
2396     "reliable" list only if the [unauthorized] nonadmitted insurer:
2397          (i) delivers a request to the commissioner to be on the list;
2398          (ii) establishes satisfactory evidence of good reputation and financial integrity;
2399          (iii) (A) delivers to the commissioner a copy of the [unauthorized] nonadmitted
2400     insurer's current annual statement certified by the insurer[; and] and, each subsequent year,
2401     delivers to the commissioner a copy of the nonadmitted insurer's annual statement within 60
2402     days after the day on which the nonadmitted insurer files the annual statement with the
2403     insurance regulatory authority where the nonadmitted insurer is domiciled; or
2404          [(B) continues each subsequent year to file its annual statements with the
2405     commissioner within 60 days of the day on which it is filed with the insurance regulatory
2406     authority where the insurer is domiciled;]
2407          (B) files the nonadmitted insurer's annual statements with the National Association of
2408     Insurance Commissioners and the nonadmitted insurer's annual statements are available
2409     electronically from the National Association of Insurance Commissioners;
2410          (iv) (A) [(I)] is in substantial compliance with the solvency standards in Chapter 17,
2411     Part 6, Risk-Based Capital, or maintains capital and surplus of at least $15,000,000, whichever
2412     is greater; [and] or

2413          [(II) maintains in the United States an irrevocable trust fund in either a national bank or
2414     a member of the Federal Reserve System, or maintains a deposit meeting the statutory deposit
2415     requirements for insurers in the state where it is made, which trust fund or deposit:]
2416          [(Aa) shall be in an amount not less than $2,500,000 for the protection of all of the
2417     insurer's policyholders in the United States;]
2418          [(Bb) may consist of cash, securities, or investments of substantially the same character
2419     and quality as those which are "qualified assets" under Section 31A-17-201; and]
2420          [(Cc) may include as part of the trust arrangement a letter of credit that qualifies as
2421     acceptable security under Section 31A-17-404.1; or]
2422          (B) in the case of any "Lloyd's" or other similar incorporated or unincorporated group
2423     of alien individual insurers, maintains a trust fund that:
2424          (I) shall be in an amount not less than $50,000,000 as security to its full amount for all
2425     policyholders and creditors in the United States of each member of the group;
2426          (II) may consist of cash, securities, or investments of substantially the same character
2427     and quality as those which are "qualified assets" under Section 31A-17-201; and
2428          (III) may include as part of this trust arrangement a letter of credit that qualifies as
2429     acceptable security under Section 31A-17-404.1; and
2430          (v) for an alien insurer not domiciled in the United States or a territory of the United
2431     States, is listed on the Quarterly Listing of Alien Insurers maintained by the National
2432     Association of Insurance Commissioners International Insurers Department.
2433          (7) (a) Subject to Subsection (7)(b), a surplus lines producer may not, either knowingly
2434     or without reasonable investigation of the financial condition and general reputation of the
2435     insurer, place insurance under this section with:
2436          (i) a financially unsound insurer;
2437          (ii) an insurer engaging in unfair practices; or
2438          (iii) an otherwise substandard insurer.
2439          (b) A surplus line producer may place insurance under this section with an insurer
2440     described in Subsection (7)(a) if the surplus line producer:
2441          (i) gives the applicant notice in writing of the known deficiencies of the insurer or the
2442     limitations on the surplus line producer's investigation; and
2443          (ii) explains the need to place the business with that insurer.

2444          (c) A copy of the notice described in Subsection (7)(b) shall be kept in the office of the
2445     surplus line producer for at least five years.
2446          (d) To be financially sound, an insurer shall satisfy standards that are comparable to
2447     those applied under the laws of this state to an authorized insurer.
2448          (e) An insurer on the "doubtful or objectionable" list under Subsection (6)(d) or an
2449     insurer not on the commissioner's "reliable" list under Subsection (6)(e) is presumed
2450     substandard.
2451          (8) (a) A policy issued under this section shall:
2452          (i) include a description of the subject of the insurance; and
2453          (ii) indicate:
2454          (A) the coverage, conditions, and term of the insurance;
2455          (B) the premium charged the policyholder;
2456          (C) the premium taxes to be collected from the policyholder; and
2457          (D) the name and address of the policyholder and insurer.
2458          (b) If the direct risk is assumed by more than one insurer, the policy shall state:
2459          (i) the names and addresses of all insurers; and
2460          (ii) the portion of the entire direct risk each assumes.
2461          (c) A policy issued under this section shall have attached or affixed to the policy the
2462     following statement: "The insurer issuing this policy does not hold a certificate of authority to
2463     do business in this state and thus is not fully subject to regulation by the Utah insurance
2464     commissioner. This policy receives no protection from any of the guaranty associations created
2465     under Title 31A, Chapter 28, Guaranty Associations."
2466          (9) Upon placing a new or renewal coverage under this section, a surplus lines
2467     producer shall promptly deliver to the policyholder or the policyholder's agent evidence of the
2468     insurance consisting either of:
2469          (a) the policy as issued by the insurer; or
2470          (b) if the policy is not available upon placing the coverage, a certificate, cover note, or
2471     other confirmation of insurance complying with Subsection (8).
2472          (10) If the commissioner finds it necessary to protect the interests of insureds and the
2473     public in this state, the commissioner may by rule subject a policy issued under this section to
2474     as much of the regulation provided by this title as is required for a comparable policy written

2475     by an authorized foreign insurer.
2476          (11) (a) A surplus lines transaction in this state shall be examined to determine whether
2477     it complies with:
2478          (i) the surplus lines tax levied under Chapter 3, Department Funding, Fees, and Taxes;
2479          (ii) the solicitation limitations of Subsection (3);
2480          (iii) the requirement of Subsection (3) that placement be through a surplus lines
2481     producer;
2482          (iv) placement limitations imposed under Subsections (6)(a), (b), and (c); and
2483          (v) the policy form requirements of Subsections (8) and (10).
2484          (b) The examination described in Subsection (11)(a) shall take place as soon as
2485     practicable after the transaction. The surplus lines producer shall submit to the examiner
2486     information necessary to conduct the examination within a period specified by rule.
2487          (c) (i) The examination described in Subsection (11)(a) may be conducted by the
2488     commissioner or by an advisory organization created under Section 31A-15-111 and authorized
2489     by the commissioner to conduct these examinations. The commissioner is not required to
2490     authorize an additional advisory organization to conduct an examination under this Subsection
2491     (11)(c).
2492          (ii) The commissioner's authorization of one or more advisory organizations to act as
2493     examiners under this Subsection (11)(c) shall be:
2494          (A) by rule; and
2495          (B) evidenced by a contract, on a form provided by the commissioner, between the
2496     authorized advisory organization and the department.
2497          (d) (i) (A) A person conducting the examination described in Subsection (11)(a) shall
2498     collect a stamping fee of an amount not to exceed 1% of the policy premium payable in
2499     connection with the transaction.
2500          (B) A stamping fee collected by the commissioner shall be deposited in the General
2501     Fund.
2502          (C) The commissioner shall establish a stamping fee by rule.
2503          (ii) A stamping fee collected by an advisory organization is the property of the advisory
2504     organization to be used in paying the expenses of the advisory organization.
2505          (iii) Liability for paying a stamping fee is as required under Subsection 31A-3-303(1)

2506     for taxes imposed under Section 31A-3-301.
2507          (iv) The commissioner shall adopt a rule dealing with the payment of stamping fees. If
2508     a stamping fee is not paid when due, the commissioner or advisory organization may impose a
2509     penalty of 25% of the stamping fee due, plus 1-1/2% per month from the time of default until
2510     full payment of the stamping fee.
2511          [(v) A stamping fee relative to a policy covering a risk located partially in this state
2512     shall be allocated in the same manner as under Subsection 31A-3-303(4).]
2513          (e) The commissioner, representatives of the department, advisory organizations,
2514     representatives and members of advisory organizations, authorized insurers, and surplus lines
2515     insurers are not liable for damages on account of statements, comments, or recommendations
2516     made in good faith in connection with their duties under this Subsection (11)(e) or under
2517     Section 31A-15-111.
2518          (f) An examination conducted under this Subsection (11) and a document or materials
2519     related to the examination are confidential.
2520          (12) (a) For a surplus lines insurance transaction in the state entered into on or after
2521     May 13, 2014, if an audit is required by the surplus lines insurance policy, a surplus lines
2522     insurer:
2523          (i) shall exercise due diligence to initiate an audit of an insured, to determine whether
2524     additional premium is owed by the insured, by no later than six months after the expiration of
2525     the term for which premium is paid; and
2526          (ii) may not audit an insured more than three years after the surplus lines insurance
2527     policy expires.
2528          (b) A surplus lines insurer that does not comply with this Subsection (12) may not
2529     charge or collect additional premium in excess of the premium agreed to under the surplus
2530     lines insurance policy.
2531          Section 19. Section 31A-16-103 is amended to read:
2532          31A-16-103. Acquisition of control of, divestiture of control of, or merger with
2533     domestic insurer.
2534          (1) (a) A person may not take the actions described in Subsection (1)(b) or (c) unless,
2535     at the time any offer, request, or invitation is made or any such agreement is entered into, or
2536     prior to the acquisition of securities if no offer or agreement is involved:

2537          (i) the person files with the commissioner a statement containing the information
2538     required by this section;
2539          (ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
2540     insurer; and
2541          (iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
2542          (b) Unless the person complies with Subsection (1)(a), a person other than the issuer
2543     may not make a tender offer for, a request or invitation for tenders of, or enter into any
2544     agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
2545     any voting security of a domestic insurer if after the acquisition, the person would directly,
2546     indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
2547          (c) Unless the person complies with Subsection (1)(a), a person may not enter into an
2548     agreement to merge with or otherwise to acquire control of:
2549          (i) a domestic insurer; or
2550          (ii) any person controlling a domestic insurer.
2551          (d) For purposes of this section, a controlling person of a domestic insurer seeking to
2552     divest its controlling interest in the domestic insurer, in any manner, shall file with the
2553     commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least
2554     30 days before the cessation of control. The commissioner shall determine those instances in
2555     which the one or more persons seeking to divest or to acquire a controlling interest in an
2556     insurer, will be required to file for and obtain approval of the transaction. The information
2557     shall remain confidential until the conclusion of the transaction unless the commissioner, in the
2558     commissioner's discretion, determines that confidential treatment will interfere with
2559     enforcement of this section. If the statement referred to in Subsection (1)(a) is otherwise filed,
2560     this Subsection (1)(d) does not apply.
2561          (e) With respect to a transaction subject to this section, the acquiring person shall also
2562     file a pre-acquisition notification with the commissioner, which shall contain the information
2563     set forth in Section 31A-16-104.5. A failure to file the notification may be subject to penalties
2564     specified in Section 31A-16-104.5.
2565          (f) (i) For purposes of this section, a domestic insurer includes any person controlling a
2566     domestic insurer unless the person as determined by the commissioner is either directly or
2567     through its affiliates primarily engaged in business other than the business of insurance.

2568          (ii) The controlling person described in Subsection (1)(f)(i) shall file with the
2569     commissioner a preacquisition notification containing the information required in Subsection
2570     (2) 30 calendar days before the proposed effective date of the acquisition.
2571          (iii) For the purposes of this section, "person" does not include any securities broker
2572     that in the usual and customary brokers function holds less than 20% of:
2573          (A) the voting securities of an insurance company; or
2574          (B) any person that controls an insurance company.
2575          (iv) This section applies to all domestic insurers and other entities licensed under:
2576          (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
2577          (B) Chapter 7, Nonprofit Health Service Insurance Corporations;
2578          (C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
2579          (D) Chapter 9, Insurance Fraternals; and
2580          (E) Chapter 11, Motor Clubs.
2581          (g) (i) An agreement for acquisition of control or merger as contemplated by this
2582     Subsection (1) is not valid or enforceable unless the agreement:
2583          (A) is in writing; and
2584          (B) includes a provision that the agreement is subject to the approval of the
2585     commissioner upon the filing of any applicable statement required under this chapter.
2586          (ii) A written agreement for acquisition or control that includes the provision described
2587     in Subsection (1)(g)(i) satisfies the requirements of this Subsection (1).
2588          (2) The statement to be filed with the commissioner under Subsection (1) shall be
2589     made under oath or affirmation and shall contain the following information:
2590          (a) the name and address of the "acquiring party," which means each person by whom
2591     or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
2592     be effected; and
2593          (i) if the person is an individual:
2594          (A) the person's principal occupation;
2595          (B) a listing of all offices and positions held by the person during the past five years;
2596     and
2597          (C) any conviction of crimes other than minor traffic violations during the past 10
2598     years; and

2599          (ii) if the person is not an individual:
2600          (A) a report of the nature of its business operations during:
2601          (I) the past five years; or
2602          (II) for any lesser period as the person and any of its predecessors has been in
2603     existence;
2604          (B) an informative description of the business intended to be done by the person and
2605     the person's subsidiaries;
2606          (C) a list of all individuals who are or who have been selected to become directors or
2607     executive officers of the person, or individuals who perform, or who will perform functions
2608     appropriate to such positions; and
2609          (D) for each individual described in Subsection (2)(a)(ii)(C), the information required
2610     by Subsection (2)(a)(i) for each individual;
2611          (b) (i) the source, nature, and amount of the consideration used or to be used in
2612     effecting the merger or acquisition of control;
2613          (ii) a description of any transaction in which funds were or are to be obtained for the
2614     purpose of effecting the merger or acquisition of control, including any pledge of:
2615          (A) the insurer's stock; or
2616          (B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
2617          (iii) the identity of persons furnishing the consideration;
2618          (c) (i) fully audited financial information, or other financial information considered
2619     acceptable by the commissioner, of the earnings and financial condition of each acquiring party
2620     for:
2621          (A) the preceding five fiscal years of each acquiring party; or
2622          (B) any lesser period the acquiring party and any of its predecessors shall have been in
2623     existence; and
2624          (ii) unaudited information:
2625          (A) similar to the information described in Subsection (2)(c)(i); and
2626          (B) prepared within the 90 days prior to the filing of the statement;
2627          (d) any plans or proposals which each acquiring party may have to:
2628          (i) liquidate the insurer;
2629          (ii) sell its assets;

2630          (iii) merge or consolidate the insurer with any person; or
2631          (iv) make any other material change in the insurer's:
2632          (A) business;
2633          (B) corporate structure; or
2634          (C) management;
2635          (e) (i) the number of shares of any security referred to in Subsection (1) that each
2636     acquiring party proposes to acquire;
2637          (ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
2638     Subsection (1); and
2639          (iii) a statement as to the method by which the fairness of the proposal was arrived at;
2640          (f) the amount of each class of any security referred to in Subsection (1) that:
2641          (i) is beneficially owned; or
2642          (ii) concerning which there is a right to acquire beneficial ownership by each acquiring
2643     party;
2644          (g) a full description of any contract, arrangement, or understanding with respect to any
2645     security referred to in Subsection (1) in which any acquiring party is involved, including:
2646          (i) the transfer of any of the securities;
2647          (ii) joint ventures;
2648          (iii) loan or option arrangements;
2649          (iv) puts or calls;
2650          (v) guarantees of loans;
2651          (vi) guarantees against loss or guarantees of profits;
2652          (vii) division of losses or profits; or
2653          (viii) the giving or withholding of proxies;
2654          (h) a description of the purchase by any acquiring party of any security referred to in
2655     Subsection (1) during the 12 calendar months preceding the filing of the statement including:
2656          (i) the dates of purchase;
2657          (ii) the names of the purchasers; and
2658          (iii) the consideration paid or agreed to be paid for the purchase;
2659          (i) a description of:
2660          (i) any recommendations to purchase by any acquiring party any security referred to in

2661     Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
2662          (ii) any recommendations made by anyone based upon interviews or at the suggestion
2663     of the acquiring party;
2664          (j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
2665     offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
2666     and
2667          (ii) if distributed, copies of additional soliciting material relating to the transactions
2668     described in Subsection (2)(j)(i);
2669          (k) (i) the term of any agreement, contract, or understanding made with, or proposed to
2670     be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
2671     tender; and
2672          (ii) the amount of any fees, commissions, or other compensation to be paid to
2673     broker-dealers with regard to any agreement, contract, or understanding described in
2674     Subsection (2)(k)(i);
2675          (l) an agreement by the person required to file the statement referred to in Subsection
2676     (1) that it will provide the annual report, specified in Section 31A-16-105, for so long as
2677     control exists;
2678          (m) an acknowledgment by the person required to file the statement referred to in
2679     Subsection (1) that the person and all subsidiaries within its control in the insurance holding
2680     company system will provide information to the commissioner upon request as necessary to
2681     evaluate enterprise risk to the insurer; and
2682          (n) any additional information the commissioner requires by rule, which the
2683     commissioner determines to be:
2684          (i) necessary or appropriate for the protection of policyholders of the insurer; or
2685          (ii) in the public interest.
2686          (3) The department may request:
2687          (a) (i) criminal background information maintained pursuant to Title 53, Chapter 10,
2688     Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
2689          (ii) complete Federal Bureau of Investigation criminal background checks through the
2690     national criminal history system.
2691          (b) Information obtained by the department from the review of criminal history records

2692     received under Subsection (3)(a) shall be used by the department for the purpose of:
2693          (i) verifying the information in Subsection (2)(a)(i);
2694          (ii) determining the integrity of persons who would control the operation of an insurer;
2695     and
2696          (iii) preventing persons who violate 18 U.S.C. Sec. 1033 from engaging in the business
2697     of insurance in the state.
2698          (c) If the department requests the criminal background information, the department
2699     shall:
2700          (i) pay to the Department of Public Safety the costs incurred by the Department of
2701     Public Safety in providing the department criminal background information under Subsection
2702     (3)(a)(i);
2703          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
2704     of Investigation in providing the department criminal background information under
2705     Subsection (3)(a)(ii); and
2706          (iii) charge the person required to file the statement referred to in Subsection (1) a fee
2707     equal to the aggregate of Subsections (3)(c)(i) and (ii).
2708          (4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
2709     the lender's ordinary course of business, the identity of the lender shall remain confidential, if
2710     the person filing the statement so requests.
2711          (b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
2712     adjusted book value assigned by the acquiring party to each security in arriving at the terms of
2713     the offer.
2714          (ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
2715     proportional interest in the capital and surplus of the insurer with adjustments that reflect:
2716          (A) market conditions;
2717          (B) business in force; and
2718          (C) other intangible assets or liabilities of the insurer.
2719          (c) The description required by Subsection (2)(g) shall identify the persons with whom
2720     the contracts, arrangements, or understandings have been entered into.
2721          (5) (a) If the person required to file the statement referred to in Subsection (1) is a
2722     partnership, limited partnership, syndicate, or other group, the commissioner may require that

2723     all the information called for by Subsection (2), (3), or (4) shall be given with respect to each:
2724          (i) partner of the partnership or limited partnership;
2725          (ii) member of the syndicate or group; and
2726          (iii) person who controls the partner or member.
2727          (b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
2728     or if the person required to file the statement referred to in Subsection (1) is a corporation, the
2729     commissioner may require that the information called for by Subsection (2) shall be given with
2730     respect to:
2731          (i) the corporation;
2732          (ii) each officer and director of the corporation; and
2733          (iii) each person who is directly or indirectly the beneficial owner of more than 10% of
2734     the outstanding voting securities of the corporation.
2735          (6) If any material change occurs in the facts set forth in the statement filed with the
2736     commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
2737     the change, together with copies of all documents and other material relevant to the change,
2738     shall be filed with the commissioner and sent to the insurer within two business days after the
2739     filing person learns of such change.
2740          (7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
2741     (1) is proposed to be made by means of a registration statement under the Securities Act of
2742     1933, or under circumstances requiring the disclosure of similar information under the
2743     Securities Exchange Act of 1934, or under a state law requiring similar registration or
2744     disclosure, a person required to file the statement referred to in Subsection (1) may use copies
2745     of any registration or disclosure documents in furnishing the information called for by the
2746     statement.
2747          (8) (a) The commissioner shall approve any merger or other acquisition of control
2748     referred to in Subsection (1), unless[, after a public hearing on the merger or acquisition,] the
2749     commissioner finds that:
2750          (i) after the change of control, the domestic insurer referred to in Subsection (1) would
2751     not be able to satisfy the requirements for the issuance of a license to write the line or lines of
2752     insurance for which it is presently licensed;
2753          (ii) the effect of the merger or other acquisition of control would:

2754          (A) substantially lessen competition in insurance in this state; or
2755          (B) tend to create a monopoly in insurance;
2756          (iii) the financial condition of any acquiring party might:
2757          (A) jeopardize the financial stability of the insurer; or
2758          (B) prejudice the interest of:
2759          (I) its policyholders; or
2760          (II) any remaining securityholders who are unaffiliated with the acquiring party;
2761          (iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
2762     Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
2763          (v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
2764     assets, or consolidate or merge it with any person, or to make any other material change in its
2765     business or corporate structure or management, are:
2766          (A) unfair and unreasonable to policyholders of the insurer; and
2767          (B) not in the public interest; or
2768          (vi) the competence, experience, and integrity of those persons who would control the
2769     operation of the insurer are such that it would not be in the interest of the policyholders of the
2770     insurer and the public to permit the merger or other acquisition of control.
2771          (b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
2772     be considered unfair if the adjusted book values under Subsection (2)(e):
2773          (i) are disclosed to the securityholders; and
2774          (ii) determined by the commissioner to be reasonable.
2775          (9) For a merger or other acquisition of control described in Subsection (1), the
2776     commissioner:
2777          (a) may hold a public hearing on the merger or other acquisition at the commissioner's
2778     discretion; and
2779          (b) shall hold a public hearing on the merger or other acquisition upon request by the
2780     acquiring party, the insurer, or any other interested party.
2781          [(9)] (10) (a) The commissioner shall hold a public hearing [referred to in Subsection
2782     (8) shall be held within 30] under Subsection (9) no later than 45 days after the day on which
2783     the statement required by Subsection (1) is filed.
2784          (b) (i) [At] The commissioner shall give at least 20 days notice of the hearing [shall be

2785     given by the commissioner] to the person filing the statement.
2786          (ii) Affected parties may waive the notice required by this Subsection (9)(b).
2787          (iii) Not less than seven days notice of the public hearing shall be given by the person
2788     filing the statement to:
2789          (A) the insurer; and
2790          (B) any person designated by the commissioner.
2791          (c) The commissioner shall make a determination within 30 days after the conclusion
2792     of the hearing.
2793          (d) At the hearing, the person filing the statement, the insurer, any person to whom
2794     notice of hearing was sent, and any other person whose interest may be affected by the hearing
2795     may:
2796          (i) present evidence;
2797          (ii) examine and cross-examine witnesses; and
2798          (iii) offer oral and written arguments.
2799          (e) (i) A person or insurer described in Subsection [(9)] (10)(d) may conduct discovery
2800     proceedings in the same manner as is presently allowed in the district courts of this state.
2801          (ii) All discovery proceedings shall be concluded not later than three days before the
2802     commencement of the public hearing.
2803          [(10)] (11) If the proposed acquisition of control will require the approval of more than
2804     one commissioner, the public hearing [referred to] described in Subsection (9)[(a)] may be held
2805     on a consolidated basis upon request of the person filing the statement referred to in Subsection
2806     (1). The person shall file the statement referred to in Subsection (1) with the National
2807     Association of Insurance Commissioners within five days of making the request for a public
2808     hearing. A commissioner may opt out of a consolidated hearing and shall provide notice to the
2809     applicant of the opt-out within 10 days of the receipt of the statement referred to in Subsection
2810     (1). A hearing conducted on a consolidated basis shall be public and shall be held within the
2811     United States before the commissioners of the states in which the insurers are domiciled. The
2812     commissioners shall hear and receive evidence. A commissioner may attend a hearing under
2813     this Subsection [(10)] (11) in person or by telecommunication.
2814          [(11)] (12) In connection with a change of control of a domestic insurer, any
2815     determination by the commissioner that the person acquiring control of the insurer shall be

2816     required to maintain or restore the capital of the insurer to the level required by the laws and
2817     regulations of this state shall be made not later than 60 days after the date of notification of the
2818     change in control submitted pursuant to Subsection (1).
2819          [(12)] (13) (a) The commissioner may retain technical experts to assist in reviewing all,
2820     or a portion of, information filed in connection with a proposed merger or other acquisition of
2821     control referred to in Subsection (1).
2822          (b) In determining whether any of the conditions in Subsection (8) exist, the
2823     commissioner may consider the findings of technical experts employed to review applicable
2824     filings.
2825          (c) (i) A technical expert employed under Subsection [(12)] (13)(a) shall present to the
2826     commissioner a statement of all expenses incurred by the technical expert in conjunction with
2827     the technical expert's review of a proposed merger or other acquisition of control.
2828          (ii) At the commissioner's direction the acquiring person shall compensate the technical
2829     expert at customary rates for time and expenses:
2830          (A) necessarily incurred; and
2831          (B) approved by the commissioner.
2832          (iii) The acquiring person shall:
2833          (A) certify the consolidated account of all charges and expenses incurred for the review
2834     by technical experts;
2835          (B) retain a copy of the consolidated account described in Subsection [(12)]
2836     (13)(c)(iii)(A); and
2837          (C) file with the department as a public record a copy of the consolidated account
2838     described in Subsection [(12)] (13)(c)(iii)(A).
2839          [(13)] (14) (a) (i) If a domestic insurer proposes to merge into another insurer, any
2840     securityholder electing to exercise a right of dissent may file with the insurer a written request
2841     for payment of the adjusted book value given in the statement required by Subsection (1) and
2842     approved under Subsection (8), in return for the surrender of the security holder's securities.
2843          (ii) The request described in Subsection [(13)] (14)(a)(i) shall be filed not later than 10
2844     days after the day of the securityholders' meeting where the corporate action is approved.
2845          (b) The dissenting securityholder is entitled to and the insurer is required to pay to the
2846     dissenting securityholder the specified value within 60 days of receipt of the dissenting security

2847     holder's security.
2848          (c) Persons electing under this Subsection [(13)] (14) to receive cash for their securities
2849     waive the dissenting shareholder and appraisal rights otherwise applicable under Title 16,
2850     Chapter 10a, Part 13, Dissenters' Rights.
2851          (d) (i) This Subsection [(13)] (14) provides an elective procedure for dissenting
2852     securityholders to resolve their objections to the plan of merger.
2853          (ii) This section does not restrict the rights of dissenting securityholders under Title 16,
2854     Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
2855     Subsection [(13)] (14).
2856          [(14)] (15) (a) All statements, amendments, or other material filed under Subsection
2857     (1), and all notices of public hearings held under Subsection (8), shall be mailed by the insurer
2858     to its securityholders within five business days after the insurer has received the statements,
2859     amendments, other material, or notices.
2860          (b) (i) Mailing expenses shall be paid by the person making the filing.
2861          (ii) As security for the payment of mailing expenses, that person shall file with the
2862     commissioner an acceptable bond or other deposit in an amount determined by the
2863     commissioner.
2864          [(15)] (16) This section does not apply to any offer, request, invitation, agreement, or
2865     acquisition that the commissioner by order exempts from the requirements of this section as:
2866          (a) not having been made or entered into for the purpose of, and not having the effect
2867     of, changing or influencing the control of a domestic insurer; or
2868          (b) otherwise not comprehended within the purposes of this section.
2869          [(16)] (17) The following are violations of this section:
2870          (a) the failure to file any statement, amendment, or other material required to be filed
2871     pursuant to Subsections (1), (2), and (5); or
2872          (b) the effectuation, or any attempt to effectuate, an acquisition of control of,
2873     divestiture of, or merger with a domestic insurer unless the commissioner has given the
2874     commissioner's approval to the acquisition or merger.
2875          [(17)] (18) (a) The courts of this state are vested with jurisdiction over:
2876          (i) a person who:
2877          (A) files a statement with the commissioner under this section; and

2878          (B) is not resident, domiciled, or authorized to do business in this state; and
2879          (ii) overall actions involving persons described in Subsection [(17)] (18)(a)(i) arising
2880     out of a violation of this section.
2881          (b) A person described in Subsection [(17)] (18)(a) is considered to have performed
2882     acts equivalent to and constituting an appointment of the commissioner by that person, to be
2883     that person's lawful agent upon whom may be served all lawful process in any action, suit, or
2884     proceeding arising out of a violation of this section.
2885          (c) A copy of a lawful process described in Subsection [(17)] (18)(b) shall be:
2886          (i) served on the commissioner; and
2887          (ii) transmitted by registered or certified mail by the commissioner to the person at that
2888     person's last-known address.
2889          Section 20. Section 31A-22-612 is amended to read:
2890          31A-22-612. Conversion privileges for insured former spouse.
2891          (1) An accident and health insurance policy, which in addition to covering the insured
2892     also provides coverage to the spouse of the insured, may not contain a provision for
2893     termination of coverage of a spouse covered under the policy, except by entry of a valid decree
2894     of divorce, legal separation, or annulment between the parties.
2895          (2) Every policy which contains this type of provision shall provide that upon the entry
2896     of the divorce decree the spouse is entitled to have issued an individual policy of accident and
2897     health insurance without evidence of insurability, upon application to the company and
2898     payment of the appropriate premium. The policy shall provide the coverage being issued
2899     which is most nearly similar to the terminated coverage. Probationary or waiting periods in the
2900     policy are considered satisfied to the extent the coverage was in force under the prior policy.
2901          (3) When the insurer receives actual notice that the coverage of a spouse is to be
2902     terminated because of a divorce, legal separation, or annulment, the insurer shall promptly
2903     provide the spouse written notification of the right to obtain individual coverage as provided in
2904     Subsection (2), the premium amounts required, and the manner, place, and time in which
2905     premiums may be paid. The premium is determined in accordance with the insurer's table of
2906     premium rates applicable to the age and class of risk of the persons to be covered and to the
2907     type and amount of coverage provided. If the spouse applies and tenders the first monthly
2908     premium to the insurer within 30 days after receiving the notice provided by this Subsection

2909     (3), the spouse shall receive individual coverage that commences immediately upon
2910     termination of coverage under the insured's policy.
2911          (4) This section does not apply to accident and health insurance policies offered on a
2912     group blanket basis or a health benefit plan.
2913          Section 21. Section 31A-22-618.6 is amended to read:
2914          31A-22-618.6. Discontinuance, nonrenewal, or changes to group health benefit
2915     plans.
2916          (1) Except as otherwise provided in this section, a group health benefit plan for a plan
2917     sponsor is renewable and continues in force:
2918          (a) with respect to all eligible employees and dependents; and
2919          (b) at the option of the plan sponsor.
2920          (2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
2921          (a) for noncompliance with the insurer's employer contribution requirements;
2922          (b) if there is no longer any enrollee under the group health plan who lives, resides, or
2923     works in:
2924          (i) the service area of the insurer; or
2925          (ii) the area for which the insurer is authorized to do business;
2926          (c) for coverage made available in the small or large employer market only through an
2927     association, if:
2928          (i) the employer's membership in the association ceases; and
2929          (ii) the coverage is terminated uniformly without regard to any health status-related
2930     factor relating to any covered individual; or
2931          (d) for noncompliance with the insurer's minimum employee participation
2932     requirements, except as provided in Subsection (3).
2933          (3) If a small employer [employs fewer than two eligible employees] no longer
2934     employs at least one eligible employee, a carrier may not discontinue or not renew the health
2935     benefit plan until the first renewal date following the beginning of a new plan year, even if the
2936     carrier knows at the beginning of the plan year that the employer no longer has at least [two
2937     current employees] one eligible employee.
2938          (4) (a) A small employer that, after purchasing a health benefit plan in the small group
2939     market, employs on average more than 50 eligible employees on each business day in a

2940     calendar year may continue to renew the health benefit plan purchased in the small group
2941     market.
2942          (b) A large employer that, after purchasing a health benefit plan in the large group
2943     market, employs on average fewer than 51 eligible employees on each business day in a
2944     calendar year may continue to renew the health benefit plan purchased in the large group
2945     market.
2946          (5) A health benefit plan for a plan sponsor may be discontinued if:
2947          (a) a condition described in Subsection (2) exists;
2948          (b) the plan sponsor fails to pay premiums or contributions in accordance with the
2949     terms of the contract;
2950          (c) the plan sponsor:
2951          (i) performs an act or practice that constitutes fraud; or
2952          (ii) makes an intentional misrepresentation of material fact under the terms of the
2953     coverage;
2954          (d) the insurer:
2955          (i) elects to discontinue offering a particular health benefit plan product delivered or
2956     issued for delivery in this state; and
2957          (ii) (A) provides notice of the discontinuation in writing to each plan sponsor,
2958     employee, or dependent of a plan sponsor or an employee, at least 90 days before the date the
2959     coverage will be discontinued;
2960          (B) provides notice of the discontinuation in writing to the commissioner, and at least
2961     three working days before the date the notice is sent to the affected plan sponsors, employees,
2962     and dependents of the plan sponsors or employees;
2963          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all
2964     other health benefit plans currently being offered by the insurer in the market or, in the case of
2965     a large employer, any other health benefit plans currently being offered in that market; and
2966          (D) in exercising the option to discontinue that health benefit plan and in offering the
2967     option of coverage in this section, acts uniformly without regard to the claims experience of a
2968     plan sponsor, any health status-related factor relating to any covered participant or beneficiary,
2969     or any health status-related factor relating to any new participant or beneficiary who may
2970     become eligible for the coverage; or

2971          (e) the insurer:
2972          (i) elects to discontinue all of the insurer's health benefit plans in:
2973          (A) the small employer market;
2974          (B) the large employer market; or
2975          (C) both the small employer and large employer markets; and
2976          (ii) (A) provides notice of the discontinuation in writing to each plan sponsor,
2977     employee, or dependent of a plan sponsor or an employee at least 180 days before the date the
2978     coverage will be discontinued;
2979          (B) provides notice of the discontinuation in writing to the commissioner in each state
2980     in which an affected insured individual is known to reside and, at least 30 working days before
2981     the date the notice is sent to the affected plan sponsors, employees, and the dependents of the
2982     plan sponsors or employees;
2983          (C) discontinues and nonrenews all plans issued or delivered for issuance in the market
2984      described in Subsection (5)(e)(i) ; and
2985          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115.
2986          (6) (a) Except as provided in Subsection (6)(d), an eligible employee may be
2987     discontinued if after issuance of coverage the eligible employee:
2988          (i) engages in an act or practice in connection with the coverage that constitutes fraud;
2989     or
2990          (ii) makes an intentional misrepresentation of material fact in connection with the
2991     coverage.
2992          (b) An eligible employee that is discontinued under Subsection (6)(a) may reenroll:
2993          (i) 12 months after the date of discontinuance; and
2994          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
2995     to reenroll.
2996          (c) At the time the eligible employee's coverage is discontinued under Subsection
2997     (6)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
2998     discontinued.
2999          (d) An eligible employee may not be discontinued under this Subsection (6) because of
3000     a fraud or misrepresentation that relates to health status.
3001          (7) For purposes of this section, a reference to "plan sponsor" includes a reference to

3002     the employer:
3003          (a) with respect to coverage provided to an employer member of the association; and
3004          (b) if the health benefit plan is made available by an insurer in the employer market
3005     only through:
3006          (i) an association;
3007          (ii) a trust; or
3008          (iii) a discretionary group.
3009          (8) An insurer may modify a health benefit plan for a plan sponsor only:
3010          (a) at the time of coverage renewal; and
3011          (b) if the modification is effective uniformly among all plans with that product.
3012          Section 22. Section 31A-22-629 is amended to read:
3013          31A-22-629. Adverse benefit determination review process.
3014          (1) As used in this section:
3015          (a) (i) "Adverse benefit determination" means the:
3016          (A) denial of a benefit;
3017          (B) reduction of a benefit;
3018          (C) termination of a benefit; or
3019          (D) failure to provide or make payment, in whole or in part, for a benefit.
3020          (ii) "Adverse benefit determination" includes:
3021          (A) denial, reduction, termination, or failure to provide or make payment that is based
3022     on a determination of an insured's or a beneficiary's eligibility to participate in a plan;
3023          (B) denial, reduction, or termination of, or a failure to provide or make payment, in
3024     whole or in part, for, a benefit resulting from the application of a utilization review; or
3025          (C) failure to cover an item or service for which benefits are otherwise provided
3026     because it is determined to be:
3027          (I) experimental;
3028          (II) investigational; or
3029          (III) not medically necessary or appropriate.
3030          (b) "Independent review" means a process that:
3031          (i) is a voluntary option for the resolution of an adverse benefit determination;
3032          (ii) is conducted at the discretion of the claimant;

3033          (iii) is conducted by an independent review organization designated by the [insurer]
3034     commissioner;
3035          (iv) renders an independent and impartial decision on an adverse benefit determination
3036     submitted by an insured; and
3037          (v) may not require the insured to pay a fee for requesting the independent review.
3038          (c) "Independent review organization" means a person, subject to Subsection (6), who
3039     conducts an independent external review of adverse determinations.
3040          (d) "Insured" is as defined in Section 31A-1-301 and includes a person who is
3041     authorized to act on the insured's behalf.
3042          (e) "Insurer" is as defined in Section 31A-1-301 and includes:
3043          (i) a health maintenance organization; and
3044          (ii) a third party administrator that offers, sells, manages, or administers a health
3045     insurance policy or health maintenance organization contract that is subject to this title.
3046          (f) "Internal review" means the process an insurer uses to review an insured's adverse
3047     benefit determination before the adverse benefit determination is submitted for independent
3048     review.
3049          (2) This section applies generally to health insurance policies, health maintenance
3050     organization contracts, and income replacement or disability income policies.
3051          (3) (a) An insured may submit an adverse benefit determination to the insurer.
3052          (b) The insurer shall conduct an internal review of the insured's adverse benefit
3053     determination.
3054          (c) An insured who disagrees with the results of an internal review may submit the
3055     adverse benefit determination for an independent review if the adverse benefit determination
3056     involves:
3057          (i) payment of a claim regarding medical necessity; or
3058          (ii) denial of a claim regarding medical necessity.
3059          (4) The commissioner shall adopt rules that establish minimum standards for:
3060          (a) internal reviews;
3061          (b) independent reviews to ensure independence and impartiality;
3062          (c) the types of adverse benefit determinations that may be submitted to an independent
3063     review; and

3064          (d) the timing of the review process, including an expedited review when medically
3065     necessary.
3066          (5) Nothing in this section may be construed as:
3067          (a) expanding, extending, or modifying the terms of a policy or contract with respect to
3068     benefits or coverage;
3069          (b) permitting an insurer to charge an insured for the internal review of an adverse
3070     benefit determination;
3071          (c) restricting the use of arbitration in connection with or subsequent to an independent
3072     review; or
3073          (d) altering the legal rights of any party to seek court or other redress in connection
3074     with:
3075          (i) an adverse decision resulting from an independent review, except that if the insurer
3076     is the party seeking legal redress, the insurer shall pay for the reasonable attorney fees of the
3077     insured related to the action and court costs; or
3078          (ii) an adverse benefit determination or other claim that is not eligible for submission
3079     to independent review.
3080          (6) (a) An independent review organization in relation to the insurer may not be:
3081          (i) the insurer;
3082          (ii) the health plan;
3083          (iii) the health plan's fiduciary;
3084          (iv) the employer; or
3085          (v) an employee or agent of any one listed in Subsections (6)(a)(i) through (iv).
3086          (b) An independent review organization may not have a material professional, familial,
3087     or financial conflict of interest with:
3088          (i) the health plan;
3089          (ii) an officer, director, or management employee of the health plan;
3090          (iii) the enrollee;
3091          (iv) the enrollee's health care provider;
3092          (v) the health care provider's medical group or independent practice association;
3093          (vi) a health care facility where service would be provided; or
3094          (vii) the developer or manufacturer of the service that would be provided.

3095          Section 23. Section 31A-22-701 is amended to read:
3096          31A-22-701. Groups eligible for group or blanket insurance.
3097          (1) As used in this section, "association group" means a lawfully formed association of
3098     individuals or business entities that:
3099          (a) purchases insurance on a group basis on behalf of members; and
3100          (b) is formed and maintained in good faith for purposes other than obtaining insurance.
3101          (2) A group accident and health insurance policy may be issued to:
3102          (a) a group:
3103          (i) to which a group life insurance policy may be issued under [Sections] Section
3104     31A-22-502, 31A-22-503, 31A-22-504, 31A-22-506, or 31A-22-507[, and 31A-22-509]; and
3105          (ii) that is formed and maintained in good faith for a purpose other than obtaining
3106     insurance;
3107          (b) an association group authorized by the commissioner that:
3108          (i) has been actively in existence for at least five years;
3109          (ii) has a constitution and bylaws;
3110          (iii) has a shared or common purpose that is not primarily a business or customer
3111     relationship;
3112          (iv) is formed and maintained in good faith for purposes other than obtaining
3113     insurance;
3114          (v) does not condition membership in the association group on any health status-related
3115     factor relating to an individual, including an employee of an employer or a dependent of an
3116     employee;
3117          (vi) makes accident and health insurance coverage offered through the association
3118     group available to all members regardless of any health status-related factor relating to the
3119     members or individuals eligible for coverage through a member;
3120          (vii) does not make accident and health insurance coverage offered through the
3121     association group available other than in connection with a member of the association group;
3122     and
3123          (viii) is actuarially sound; or
3124          (c) a group specifically authorized by the commissioner [under Section 31A-22-509],
3125     upon a finding that:

3126          (i) authorization is not contrary to the public interest;
3127          (ii) the group is actuarially sound;
3128          (iii) formation of the proposed group may result in economies of scale in acquisition,
3129     administrative, marketing, and brokerage costs;
3130          (iv) the insurance policy, insurance certificate, or other indicia of coverage that will be
3131     offered to the proposed group is substantially equivalent to insurance policies that are
3132     otherwise available to similar groups;
3133          (v) the group would not present hazards of adverse selection;
3134          (vi) the premiums for the insurance policy and any contributions by or on behalf of the
3135     insured persons are reasonable in relation to the benefits provided; and
3136          (vii) the group is formed and maintained in good faith for a purpose other than
3137     obtaining insurance.
3138          (3) A blanket accident and health insurance policy:
3139          (a) covers a defined class of persons;
3140          (b) may not be offered or underwritten on an individual basis;
3141          (c) shall cover only a group that is:
3142          (i) actuarially sound; and
3143          (ii) formed and maintained in good faith for a purpose other than obtaining insurance;
3144     and
3145          (d) may be issued only to:
3146          (i) a common carrier or an operator, owner, or lessee of a means of transportation, as
3147     policyholder, covering persons who may become passengers as defined by reference to the
3148     person's travel status;
3149          (ii) an employer, as policyholder, covering any group of employees, dependents, or
3150     guests, as defined by reference to specified hazards incident to any activities of the
3151     policyholder;
3152          (iii) an institution of learning, including a school district, a school jurisdictional unit, or
3153     the head, principal, or governing board of a school jurisdictional unit, as policyholder, covering
3154     students, teachers, or employees;
3155          (iv) a religious, charitable, recreational, educational, or civic organization, or branch of
3156     one of those organizations, as policyholder, covering a group of members or participants as

3157     defined by reference to specified hazards incident to the activities sponsored or supervised by
3158     the policyholder;
3159          (v) a sports team, camp, or sponsor of a sports team or camp, as policyholder, covering
3160     members, campers, employees, officials, or supervisors;
3161          (vi) a volunteer fire department, first aid, civil defense, or other similar volunteer
3162     organization, as policyholder, covering a group of members or participants as defined by
3163     reference to specified hazards incident to activities sponsored, supervised, or participated in by
3164     the policyholder;
3165          (vii) a newspaper or other publisher, as policyholder, covering its carriers;
3166          (viii) an association, including a labor union, that has a constitution and bylaws and
3167     that is organized in good faith for purposes other than that of obtaining insurance, as
3168     policyholder, covering a group of members or participants as defined by reference to specified
3169     hazards incident to the activities or operations sponsored or supervised by the policyholder; and
3170          (ix) any other class of risks that, in the judgment of the commissioner, may be properly
3171     eligible for blanket accident and health insurance.
3172          (4) The judgment of the commissioner may be exercised on the basis of:
3173          (a) individual risks;
3174          (b) a class of risks; or
3175          (c) both Subsections (4)(a) and (b).
3176          Section 24. Section 31A-22-722 is amended to read:
3177          31A-22-722. Utah mini-COBRA benefits for employer group coverage.
3178          (1) An insured may extend the employee's coverage under the current employer's group
3179     policy for a period of 12 months, except as provided in [Subsections (2) and 31A-22-722.5(4)]
3180     Subsection (2). The right to extend coverage includes:
3181          (a) voluntary termination;
3182          (b) involuntary termination;
3183          (c) retirement;
3184          (d) death;
3185          (e) divorce or legal separation;
3186          (f) loss of dependent status;
3187          (g) sabbatical;

3188          (h) a disability;
3189          (i) leave of absence; or
3190          (j) reduction of hours.
3191          (2) (a) Notwithstanding Subsection (1), an employee may not extend coverage under
3192     the current employer's group insurance policy if the employee:
3193          (i) fails to pay premiums or contributions in accordance with the terms of the insurance
3194     policy;
3195          (ii) acquires other group coverage covering all preexisting conditions including
3196     maternity, if the coverage exists;
3197          (iii) performs an act or practice that constitutes fraud in connection with the coverage;
3198          (iv) makes an intentional misrepresentation of material fact under the terms of the
3199     coverage;
3200          (v) is terminated from employment for gross misconduct;
3201          (vi) is not continuously covered under the current employer's group policy for a period
3202     of three months immediately before the termination of the insurance policy due to an event set
3203     forth in Subsection (1);
3204          (vii) is eligible for an extension of coverage required by federal law;
3205          (viii) establishes residence outside of this state;
3206          (ix) moves out of the insurer's service area;
3207          (x) is eligible for similar coverage under another group insurance policy; or
3208          (xi) has the employee's coverage terminated because the employer's coverage is
3209     terminated, except as provided in Subsection (8).
3210          (b) The right to extend coverage under Subsection (1) applies to spouse or dependent
3211     coverage, including a surviving spouse or dependents whose coverage under the insurance
3212     policy terminates by reason of the death of the employee or member.
3213          (3) (a) The employer shall notify the following in writing of the right to extend group
3214     coverage and the payment amounts required for extension of coverage, including the manner,
3215     place, and time in which the payments shall be made:
3216          (i) a terminated insured;
3217          (ii) an ex-spouse of an insured; or
3218          (iii) if Subsection (2)(b) applies:

3219          (A) a surviving spouse; and
3220          (B) the guardian of surviving dependents, if different from a surviving spouse.
3221          (b) The notification required in Subsection (3)(a) shall be sent first class mail within 30
3222     days after the termination date of the group coverage to:
3223          (i) the terminated insured's home address as shown on the records of the employer;
3224          (ii) the address of the surviving spouse, if different from the insured's address and if
3225     shown on the records of the employer;
3226          (iii) the guardian of any dependents address, if different from the insured's address, and
3227     if shown on the records of the employer; and
3228          (iv) the address of the ex-spouse, if shown on the records of the employer.
3229          (4) The insurer shall provide the employee, spouse, or any eligible dependent the
3230     opportunity to extend the group coverage at the payment amount stated in Subsection (5) if:
3231          (a) the employer policyholder does not provide the terminated insured the written
3232     notification required by Subsection (3)(a); and
3233          (b) the employee or other individual eligible for extension contacts the insurer within
3234     60 days of coverage termination.
3235          (5) (a) A premium amount for extended group coverage may not exceed 102% of the
3236     group rate in effect for a group member, including an employer's contribution, if any, for a
3237     group insurance policy.
3238          (b) Except as provided in Subsection (5)(a), an insurer may not charge an insured an
3239     additional fee, an additional premium, interest, or any similar charge for electing extended
3240     group coverage.
3241          (6) Except as provided in this Subsection (6), coverage extends without interruption for
3242     12 months and may not terminate if the terminated insured or, with respect to a minor, the
3243     parent or guardian of the terminated insured:
3244          (a) elects to extend group coverage within 60 days of losing group coverage; and
3245          (b) tenders the amount required to the employer or insurer.
3246          (7) The insured's coverage may be terminated before 12 months if the terminated
3247     insured:
3248          (a) establishes residence outside of this state;
3249          (b) moves out of the insurer's service area;

3250          (c) fails to pay premiums or contributions in accordance with the terms of the insurance
3251     policy, including any timeliness requirements;
3252          (d) performs an act or practice that constitutes fraud in connection with the coverage;
3253          (e) makes an intentional misrepresentation of material fact under the terms of the
3254     coverage;
3255          (f) becomes eligible for similar coverage under another group insurance policy; or
3256          (g) has the coverage terminated because the employer's coverage is terminated, except
3257     as provided in Subsection (8).
3258          (8) If the current employer coverage is terminated and the employer replaces coverage
3259     with similar coverage under another group insurance policy, without interruption, the
3260     terminated insured, spouse, or the surviving spouse and guardian of dependents if Subsection
3261     (2)(b) applies, may obtain extension of coverage under the replacement group insurance policy:
3262          (a) for the balance of the period the terminated insured would have extended coverage
3263     under the replaced group insurance policy; and
3264          (b) if the terminated insured is otherwise eligible for extension of coverage.
3265          (9) An insurer shall require an insured employer to offer to the following individuals an
3266     open enrollment period at the same time as other regular employees:
3267          (a) an individual who extends group coverage and is current on payment; and
3268          (b) during the applicable grace period described in Subsection (3) or (4), an individual
3269     who is eligible to elect to extend group coverage.
3270          Section 25. Section 31A-23a-107 is amended to read:
3271          31A-23a-107. Character requirements.
3272          An applicant for a license under this chapter shall show to the commissioner that:
3273          (1) the applicant has the intent in good faith, to engage in the type of business that the
3274     license applied for would permit;
3275          (2) (a) if a natural person, the applicant is:
3276          (i) competent; and
3277          (ii) trustworthy; or
3278          (b) if the applicant is an agency:
3279          (i) the partners, directors, or principal officers or persons having comparable powers
3280     are trustworthy; and

3281          (ii) that it will transact business in such a way that the acts that may only be performed
3282     by a licensed producer, surplus lines producer, limited line producer, consultant, managing
3283     general agent, or reinsurance intermediary are performed exclusively by natural persons who
3284     are licensed under this chapter to transact that type of business and designated on the agency's
3285     license;
3286          (3) the applicant intends to comply with Section 31A-23a-502; and
3287          (4) if a natural person, the applicant is at least 18 years of age.
3288          Section 26. Section 31A-23a-109 is amended to read:
3289          31A-23a-109. Nonresident jurisdictional agreement.
3290          (1) (a) If a nonresident license applicant has a valid producer, surplus lines producer,
3291     limited line producer, consultant, managing general agent, or reinsurance intermediary license
3292     from the nonresident license applicant's home state or designated home state and the conditions
3293     of Subsection (1)(b) are met, the commissioner shall:
3294          (i) waive the license requirements for a license under this chapter; and
3295          (ii) issue the nonresident license applicant a nonresident license.
3296          (b) Subsection (1)(a) applies if:
3297          (i) the nonresident license applicant:
3298          (A) is licensed [as a resident] in the nonresident license applicant's home state or
3299     designated home state at the time the nonresident license applicant applies for a nonresident
3300     producer, surplus lines producer, limited line producer, consultant, managing general agent, or
3301     reinsurance intermediary license;
3302          (B) has submitted the proper request for licensure;
3303          (C) has submitted to the commissioner:
3304          (I) the application for licensure that the nonresident license applicant submitted to the
3305     applicant's home state or designated home state; or
3306          (II) a completed uniform application; and
3307          (D) has paid the applicable fees under Section 31A-3-103; and
3308          (ii) the nonresident license applicant's license in the applicant's home state or
3309     designated home state is in good standing.
3310          (2) A nonresident applicant applying under Subsection (1) shall in addition to
3311     complying with all license requirements for a license under this chapter execute, in a form

3312     acceptable to the commissioner, an agreement to be subject to the jurisdiction of the Utah
3313     commissioner and courts on any matter related to the applicant's insurance activities in this
3314     state, on the basis of:
3315          (a) service of process under Sections 31A-2-309 and 31A-2-310; or
3316          (b) service authorized:
3317          (i) in the Utah Rules of Civil Procedure; or
3318          (ii) under Section 78B-3-206.
3319          (3) The commissioner may verify a producer's licensing status through the producer
3320     database maintained by:
3321          (a) the National Association of Insurance Commissioners; or
3322          (b) an affiliate or subsidiary of the National Association of Insurance Commissioners.
3323          (4) The commissioner may not assess a greater fee for an insurance license or related
3324     service to a person not residing in this state solely on the fact that the person does not reside in
3325     this state.
3326          Section 27. Section 31A-23a-111 is amended to read:
3327          31A-23a-111. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
3328     terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
3329          (1) A license type issued under this chapter remains in force until:
3330          (a) revoked or suspended under Subsection (5);
3331          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
3332     administrative action;
3333          (c) the licensee dies or is adjudicated incompetent as defined under:
3334          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
3335          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
3336     Minors;
3337          (d) lapsed under Section 31A-23a-113; or
3338          (e) voluntarily surrendered.
3339          (2) The following may be reinstated within one year after the day on which the license
3340     is no longer in force:
3341          (a) a lapsed license; or
3342          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may

3343     not be reinstated after the license period in which the license is voluntarily surrendered.
3344          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
3345     license, submission and acceptance of a voluntary surrender of a license does not prevent the
3346     department from pursuing additional disciplinary or other action authorized under:
3347          (a) this title; or
3348          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
3349     Administrative Rulemaking Act.
3350          (4) A line of authority issued under this chapter remains in force until:
3351          (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
3352     or
3353          (b) the supporting license type:
3354          (i) is revoked or suspended under Subsection (5);
3355          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
3356     administrative action;
3357          (iii) lapses under Section 31A-23a-113; or
3358          (iv) is voluntarily surrendered; or
3359          (c) the licensee dies or is adjudicated incompetent as defined under:
3360          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
3361          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
3362     Minors.
3363          (5) (a) If the commissioner makes a finding under Subsection (5)(b), as part of an
3364     adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
3365     commissioner may:
3366          (i) revoke:
3367          (A) a license; or
3368          (B) a line of authority;
3369          (ii) suspend for a specified period of 12 months or less:
3370          (A) a license; or
3371          (B) a line of authority;
3372          (iii) limit in whole or in part:
3373          (A) a license; or

3374          (B) a line of authority;
3375          (iv) deny a license application;
3376          (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
3377          (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
3378     Subsection (5)(a)(v).
3379          (b) The commissioner may take an action described in Subsection (5)(a) if the
3380     commissioner finds that the licensee:
3381          (i) is unqualified for a license or line of authority under Section 31A-23a-104,
3382     31A-23a-105, or 31A-23a-107;
3383          (ii) violates:
3384          (A) an insurance statute;
3385          (B) a rule that is valid under Subsection 31A-2-201(3); or
3386          (C) an order that is valid under Subsection 31A-2-201(4);
3387          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
3388     delinquency proceedings in any state;
3389          (iv) fails to pay a final judgment rendered against the person in this state within 60
3390     days after the day on which the judgment became final;
3391          (v) fails to meet the same good faith obligations in claims settlement that is required of
3392     admitted insurers;
3393          (vi) is affiliated with and under the same general management or interlocking
3394     directorate or ownership as another insurance producer that transacts business in this state
3395     without a license;
3396          (vii) refuses:
3397          (A) to be examined; or
3398          (B) to produce its accounts, records, and files for examination;
3399          (viii) has an officer who refuses to:
3400          (A) give information with respect to the insurance producer's affairs; or
3401          (B) perform any other legal obligation as to an examination;
3402          (ix) provides information in the license application that is:
3403          (A) incorrect;
3404          (B) misleading;

3405          (C) incomplete; or
3406          (D) materially untrue;
3407          (x) violates an insurance law, valid rule, or valid order of another regulatory agency in
3408     any jurisdiction;
3409          (xi) obtains or attempts to obtain a license through misrepresentation or fraud;
3410          (xii) improperly withholds, misappropriates, or converts money or properties received
3411     in the course of doing insurance business;
3412          (xiii) intentionally misrepresents the terms of an actual or proposed:
3413          (A) insurance contract;
3414          (B) application for insurance; or
3415          (C) life settlement;
3416          (xiv) is convicted of:
3417          (A) a felony; or
3418          (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
3419          (xv) admits or is found to have committed an insurance unfair trade practice or fraud;
3420          (xvi) in the conduct of business in this state or elsewhere:
3421          (A) uses fraudulent, coercive, or dishonest practices; or
3422          (B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
3423          (xvii) has had an insurance license or other professional or occupational license, or [its]
3424     an equivalent[,] to an insurance license or other professional or occupational license:
3425          (A) denied[,];
3426          (B) suspended[, or];
3427          (C) revoked [in another state, province, district, or territory]; or
3428          (D) surrendered to resolve an administrative action;
3429          (xviii) forges another's name to:
3430          (A) an application for insurance; or
3431          (B) a document related to an insurance transaction;
3432          (xix) improperly uses notes or another reference material to complete an examination
3433     for an insurance license;
3434          (xx) knowingly accepts insurance business from an individual who is not licensed;
3435          (xxi) fails to comply with an administrative or court order imposing a child support

3436     obligation;
3437          (xxii) fails to:
3438          (A) pay state income tax; or
3439          (B) comply with an administrative or court order directing payment of state income
3440     tax;
3441          (xxiii) violates or permits others to violate the federal Violent Crime Control and Law
3442     Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and therefore under 18 U.S.C. Sec. 1033 is
3443     prohibited from engaging in the business of insurance; or
3444          (xxiv) engages in a method or practice in the conduct of business that endangers the
3445     legitimate interests of customers and the public.
3446          (c) For purposes of this section, if a license is held by an agency, both the agency itself
3447     and any individual designated under the license are considered to be the holders of the license.
3448          (d) If an individual designated under the agency license commits an act or fails to
3449     perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
3450     the commissioner may suspend, revoke, or limit the license of:
3451          (i) the individual;
3452          (ii) the agency, if the agency:
3453          (A) is reckless or negligent in its supervision of the individual; or
3454          (B) knowingly participates in the act or failure to act that is the ground for suspending,
3455     revoking, or limiting the license; or
3456          (iii) (A) the individual; and
3457          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
3458          (6) A licensee under this chapter is subject to the penalties for acting as a licensee
3459     without a license if:
3460          (a) the licensee's license is:
3461          (i) revoked;
3462          (ii) suspended;
3463          (iii) limited;
3464          (iv) surrendered in lieu of administrative action;
3465          (v) lapsed; or
3466          (vi) voluntarily surrendered; and

3467          (b) the licensee:
3468          (i) continues to act as a licensee; or
3469          (ii) violates the terms of the license limitation.
3470          (7) A licensee under this chapter shall immediately report to the commissioner:
3471          (a) a revocation, suspension, or limitation of the person's license in another state, the
3472     District of Columbia, or a territory of the United States;
3473          (b) the imposition of a disciplinary sanction imposed on that person by another state,
3474     the District of Columbia, or a territory of the United States; or
3475          (c) a judgment or injunction entered against that person on the basis of conduct
3476     involving:
3477          (i) fraud;
3478          (ii) deceit;
3479          (iii) misrepresentation; or
3480          (iv) a violation of an insurance law or rule.
3481          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
3482     license in lieu of administrative action may specify a time, not to exceed five years, within
3483     which the former licensee may not apply for a new license.
3484          (b) If no time is specified in an order or agreement described in Subsection (8)(a), the
3485     former licensee may not apply for a new license for five years from the day on which the order
3486     or agreement is made without the express approval by the commissioner.
3487          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
3488     a license issued under this part if so ordered by a court.
3489          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
3490     procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
3491          Section 28. Section 31A-23a-208 is amended to read:
3492          31A-23a-208. Producer and agency authority in health insurance exchange.
3493          A producer or agency licensed under this chapter, with a line of authority that permits
3494     the producer or agency to sell, negotiate, or solicit accident and health insurance, is authorized
3495     to sell, negotiate, or solicit qualified health plans offered on [an] a health insurance exchange
3496     [that is:].
3497          [(1) operated in the state; or]

3498          [(2) operated in the state and certified by the United States Department of Health and
3499     Human Services as a:]
3500          [(a) state-based exchange under PPACA;]
3501          [(b) a federally facilitated exchange under PPACA; or]
3502          [(c) a partnership exchange under PPACA.]
3503          Section 29. Section 31A-23a-406 is amended to read:
3504          31A-23a-406. Title insurance producer's business.
3505          (1) An individual title insurance producer or agency title insurance producer may do
3506     escrow involving real property transactions if all of the following exist:
3507          (a) the individual title insurance producer or agency title insurance producer is licensed
3508     with:
3509          (i) the title line of authority; and
3510          (ii) the escrow subline of authority;
3511          (b) the individual title insurance producer or agency title insurance producer is
3512     appointed by a title insurer authorized to do business in the state;
3513          (c) the individual title insurance producer or agency title insurance producer issues one
3514     or more of the following as part of the transaction:
3515          (i) an owner's policy of title insurance; [or]
3516          (ii) a lender's policy of title insurance; or
3517          (iii) if the transaction does not involve a transfer of ownership, an endorsement to an
3518     owner's or a lender's policy of title insurance.
3519          (d) money deposited with the individual title insurance producer or agency title
3520     insurance producer in connection with any escrow:
3521          (i) is deposited:
3522          (A) in a federally insured financial institution; and
3523          (B) in a trust account that is separate from all other trust account money that is not
3524     related to real estate transactions;
3525          (ii) is the property of the one or more persons entitled to the money under the
3526     provisions of the escrow; and
3527          (iii) is segregated escrow by escrow in the records of the individual title insurance
3528     producer or agency title insurance producer;

3529          (e) earnings on money held in escrow may be paid out of the escrow account to any
3530     person in accordance with the conditions of the escrow;
3531          (f) the escrow does not require the individual title insurance producer or agency title
3532     insurance producer to hold:
3533          (i) construction money; or
3534          (ii) money held for exchange under Section 1031, Internal Revenue Code; and
3535          (g) the individual title insurance producer or agency title insurance producer shall
3536     maintain a physical office in Utah staffed by a person with an escrow subline of authority who
3537     processes the escrow.
3538          (2) Notwithstanding Subsection (1), an individual title insurance producer or agency
3539     title insurance producer may engage in the escrow business if:
3540          (a) the escrow involves:
3541          (i) a mobile home;
3542          (ii) a grazing right;
3543          (iii) a water right; or
3544          (iv) other personal property authorized by the commissioner; and
3545          (b) the individual title insurance producer or agency title insurance producer complies
3546     with this section except for Subsection (1)(c).
3547          (3) Money held in escrow:
3548          (a) is not subject to any debts of the individual title insurance producer or agency title
3549     insurance producer;
3550          (b) may only be used to fulfill the terms of the individual escrow under which the
3551     money is accepted; and
3552          (c) may not be used until the conditions of the escrow are met.
3553          (4) Assets or property other than escrow money received by an individual title
3554     insurance producer or agency title insurance producer in accordance with an escrow shall be
3555     maintained in a manner that will:
3556          (a) reasonably preserve and protect the asset or property from loss, theft, or damages;
3557     and
3558          (b) otherwise comply with the general duties and responsibilities of a fiduciary or
3559     bailee.

3560          (5) (a) A check from the trust account described in Subsection (1)(d) may not be
3561     drawn, executed, or dated, or money otherwise disbursed unless the segregated escrow account
3562     from which money is to be disbursed contains a sufficient credit balance consisting of collected
3563     and cleared money at the time the check is drawn, executed, or dated, or money is otherwise
3564     disbursed.
3565          (b) As used in this Subsection (5), money is considered to be "collected and cleared,"
3566     and may be disbursed as follows:
3567          (i) cash may be disbursed on the same day the cash is deposited;
3568          (ii) a wire transfer may be disbursed on the same day the wire transfer is deposited; and
3569          (iii) the proceeds of one or more of the following financial instruments may be
3570     disbursed on the same day the financial instruments are deposited if received from a single
3571     party to the real estate transaction and if the aggregate of the financial instruments for the real
3572     estate transaction is less than $10,000:
3573          (A) a cashier's check, certified check, or official check that is drawn on an existing
3574     account at a federally insured financial institution;
3575          (B) a check drawn on the trust account of a principal broker or associate broker
3576     licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act, if the individual
3577     title insurance producer or agency title insurance producer has reasonable and prudent grounds
3578     to believe sufficient money will be available from the trust account on which the check is
3579     drawn at the time of disbursement of proceeds from the individual title insurance producer or
3580     agency title insurance producer's escrow account;
3581          (C) a personal check not to exceed $500 per closing; or
3582          (D) a check drawn on the escrow account of another individual title insurance producer
3583     or agency title insurance producer, if the individual title insurance producer or agency title
3584     insurance producer in the escrow transaction has reasonable and prudent grounds to believe
3585     that sufficient money will be available for withdrawal from the account upon which the check
3586     is drawn at the time of disbursement of money from the escrow account of the individual title
3587     insurance producer or agency title insurance producer in the escrow transaction.
3588          (c) A check or deposit not described in Subsection (5)(b) may be disbursed:
3589          (i) within the time limits provided under the Expedited Funds Availability Act, 12
3590     U.S.C. Sec. 4001 et seq., as amended, and related regulations of the Federal Reserve System; or

3591          (ii) upon notification from the financial institution to which the money has been
3592     deposited that final settlement has occurred on the deposited financial instrument.
3593          (6) An individual title insurance producer or agency title insurance producer shall
3594     maintain a record of a receipt or disbursement of escrow money.
3595          (7) An individual title insurance producer or agency title insurance producer shall
3596     comply with:
3597          (a) Section 31A-23a-409;
3598          (b) Title 46, Chapter 1, Notaries Public Reform Act; and
3599          (c) any rules adopted by the Title and Escrow Commission, subject to Section
3600     31A-2-404, that govern escrows.
3601          (8) If an individual title insurance producer or agency title insurance producer conducts
3602     a search for real estate located in the state, the individual title insurance producer or agency
3603     title insurance producer shall conduct a reasonable search of the public records.
3604          Section 30. Section 31A-23b-102 is amended to read:
3605          31A-23b-102. Definitions.
3606          As used in this chapter:
3607          (1) "Enroll" and "enrollment" mean to:
3608          (a) (i) obtain personally identifiable information about an individual; and
3609          (ii) inform an individual about accident and health insurance plans or public programs
3610     offered on an exchange;
3611          (b) solicit insurance; or
3612          (c) submit to the exchange:
3613          (i) personally identifiable information about an individual; and
3614          (ii) an individual's selection of a particular accident and health insurance plan or public
3615     program offered on the exchange.
3616          [(2) (a) "Exchange" means an online marketplace that is certified by the United States
3617     Department of Health and Human Services as either a state-based small employer exchange or
3618     a federally facilitated individual exchange under PPACA.]
3619          [(b) "Exchange" does not include an online marketplace for the purchase of health
3620     insurance if the online marketplace is not a certified exchange in accordance with Subsection
3621     (2)(a).]

3622          [(3)] (2) "Navigator":
3623          (a) means a person who facilitates enrollment in an exchange by offering to assist, or
3624     who advertises any services to assist, with:
3625          (i) the selection of and enrollment in a qualified health plan or a public program
3626     offered on an exchange; or
3627          (ii) applying for premium subsidies through an exchange; and
3628          (b) includes a person who is an in-person assister or a certified application counselor as
3629     described in federal regulations or guidance issued under PPACA.
3630          [(4)] (3) "Personally identifiable information" is as defined in 45 C.F.R. Sec. 155.260.
3631          [(5)] (4) "Public programs" means the state Medicaid program in Title 26, Chapter 18,
3632     Medical Assistance Act, and Title 26, Chapter 40, Utah Children's Health Insurance Act.
3633          [(6)] (5) "Resident" is as defined by rule made by the commissioner in accordance with
3634     Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
3635          [(7)] (6) "Solicit" [is as] means the same as that term is defined in Section
3636     31A-23a-102.
3637          Section 31. Section 31A-23b-202.5 is amended to read:
3638          31A-23b-202.5. License types.
3639          (1) A license issued under this chapter shall be issued under the license types described
3640     in Subsection (2).
3641          (2) A license type under this chapter shall be a navigator line of authority or a certified
3642     application counselor line of authority. A license type is intended to describe the matters to be
3643     considered under any education, examination, and training required of an applicant under this
3644     chapter.
3645          (3) (a) A navigator line of authority includes the enrollment process as described in
3646     Subsection 31A-23b-102[(3)](2)(a).
3647          (b) (i) A certified application counselor line of authority is limited to providing
3648     information and assistance to individuals and employees about public programs and premium
3649     subsidies available through the exchange.
3650          (ii) A certified application counselor line of authority does not allow the certified
3651     application counselor to assist a person with the selection of or enrollment in a qualified health
3652     plan offered on an exchange.

3653          Section 32. Section 31A-23b-204 is amended to read:
3654          31A-23b-204. Character requirements.
3655          An applicant for a license under this chapter shall demonstrate to the commissioner
3656     that:
3657          (1) the applicant has the intent, in good faith, to engage in the practice of a navigator as
3658     the license would permit;
3659          (2) (a) if a natural person, the applicant is:
3660          (i) competent; and
3661          (ii) trustworthy; or
3662          (b) if the applicant is an agency:
3663          (i) the partners, directors, or principal officers or persons having comparable powers
3664     are trustworthy; and
3665          (ii) that it will transact business in a way that the acts that may only be performed by a
3666     licensed navigator are performed only by a natural person who is licensed under this chapter, or
3667     Chapter 23a, Insurance Marketing-Licensing Producers, Consultants, and Reinsurance
3668     Intermediaries;
3669          (3) the applicant intends to comply with the surety bond requirements of Section
3670     31A-23b-207;
3671          (4) if a natural person, the applicant is at least 18 years of age; and
3672          (5) the applicant does not have a conflict of interest as defined by regulations issued
3673     under PPACA.
3674          Section 33. Section 31A-23b-205 is amended to read:
3675          31A-23b-205. Examination and training requirements.
3676          (1) The commissioner may require an applicant for a license to pass an examination
3677     and complete a training program as a requirement for a license.
3678          (2) The examination described in Subsection (1) shall reasonably relate to:
3679          (a) the duties and functions of a navigator;
3680          (b) requirements for navigators as established by federal regulation under PPACA; and
3681          (c) other requirements that may be established by the commissioner by administrative
3682     rule.
3683          (3) The examination may be administered by the commissioner or as otherwise

3684     specified by administrative rule.
3685          (4) The training required by Subsection (1) shall be approved by the commissioner and
3686     shall include:
3687          (a) accident and health insurance plans;
3688          (b) qualifications for and enrollment in public programs;
3689          (c) qualifications for and enrollment in premium subsidies;
3690          (d) cultural and linguistic competence;
3691          (e) conflict of interest standards;
3692          (f) exchange functions; and
3693          (g) other requirements that may be adopted by the commissioner by administrative
3694     rule.
3695          (5) (a) For the navigator line of authority, the training required by Subsection (1) shall
3696     consist of at least 21 credit hours of training before obtaining the license, which shall
3697     include[:(i) at least two hours of training on defined contribution arrangements and the small
3698     employer health insurance exchange; and (ii)] the navigator training and certification program
3699     developed by the Centers for Medicare and Medicaid Services.
3700          (b) For the certified application counselor line of authority, the training required by
3701     Subsection (1) shall consist of at least six hours of training before obtaining a license, which
3702     shall include[:(i) at least one hour of training on defined contribution arrangements and the
3703     small employer health insurance exchange; and(ii)] the certified application counselor training
3704     and certification program developed by the Centers for Medicare and Medicaid Services.
3705          (6) This section applies only to an applicant who is a natural person.
3706          Section 34. Section 31A-23b-206 is amended to read:
3707          31A-23b-206. Continuing education requirements.
3708          (1) The commissioner shall, by rule, prescribe continuing education requirements for a
3709     navigator.
3710          (2) (a) The commissioner may not require a degree from an institution of higher
3711     education as part of continuing education.
3712          (b) The commissioner may state a continuing education requirement in terms of hours
3713     of instruction received in:
3714          (i) accident and health insurance;

3715          (ii) qualification for and enrollment in public programs;
3716          (iii) qualification for and enrollment in premium subsidies;
3717          (iv) cultural competency;
3718          (v) conflict of interest standards; and
3719          (vi) other exchange functions.
3720          (3) (a) For a navigator line of authority, continuing education requirements shall
3721     require:
3722          (i) that a licensee complete 12 credit hours of continuing education for every one-year
3723     licensing period;
3724          (ii) that at least two of the 12 credit hours described in Subsection (3)(a)(i) be ethics
3725     courses; and
3726          [(iii) that at least one of the 12 credit hours described in Subsection (3)(a)(i) be training
3727     on defined contribution arrangements and the use of the small employer health insurance
3728     exchange; and]
3729          [(iv)] (iii) that a licensee complete the annual navigator training and certification
3730     program developed by the Centers for Medicare and Medicaid Services.
3731          (b) For a certified application counselor, the continuing education requirements shall
3732     require:
3733          (i) that a licensee complete six credit hours of continuing education for every one-year
3734     licensing period;
3735          (ii) that at least two of the six credit hours described in Subsection (3)(b)(i) be on
3736     ethics courses; and
3737          [(iii) that at least one of the six credit hours described in Subsection (3)(b)(i) be
3738     training on defined contribution arrangements and the use of the small employer health
3739     insurance exchange; and]
3740          [(iv)] (iii) that a licensee complete the annual certified application counselor training
3741     and certification program developed by the Centers for Medicare and Medicaid Services.
3742          (c) An hour of continuing education in accordance with Subsections (3)(a)(i) and (b)(i)
3743     may be obtained through:
3744          (i) classroom attendance;
3745          (ii) home study;

3746          (iii) watching a video recording; or
3747          (iv) another method approved by rule.
3748          (d) A licensee may obtain continuing education hours at any time during the one-year
3749     license period.
3750          (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
3751     commissioner shall, by rule, authorize one or more continuing education providers, including a
3752     state or national professional producer or consultant associations, to:
3753          (i) offer a qualified program on a geographically accessible basis; and
3754          (ii) collect a reasonable fee for funding and administration of a continuing education
3755     program, subject to the review and approval of the commissioner.
3756          (4) The commissioner shall approve a continuing education provider or a continuing
3757     education course that satisfies the requirements of this section.
3758          (5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
3759     commissioner shall by rule establish the procedures for continuing education provider
3760     registration and course approval.
3761          (6) This section applies only to a navigator who is a natural person.
3762          (7) A navigator shall keep documentation of completing the continuing education
3763     requirements of this section for one year after the end of the one-year licensing period to which
3764     the continuing education applies.
3765          Section 35. Section 31A-25-204 is amended to read:
3766          31A-25-204. Character requirements.
3767          Each applicant for a license under this chapter shall show to the commissioner all of the
3768     following:
3769          (1) [he or it] that the applicant has the good faith intent to engage in the type of
3770     business the license applied for would permit;
3771          (2) (a) if a natural person, [he is] that the applicant is:
3772          (i) competent; and
3773          (ii) trustworthy[,]; or[,]
3774          (b) if a partnership or corporation, that all the partners, directors, principal officers, or
3775     persons having comparable powers are trustworthy; and
3776          (3) if a natural person, [he] that the applicant is at least 18 years of age.

3777          Section 36. Section 31A-25-206 is amended to read:
3778          31A-25-206. Nonresident jurisdictional agreement.
3779          (1) (a) If a nonresident license applicant has a valid license from the nonresident license
3780     applicant's home state or designated home state and the conditions of Subsection (1)(b) are
3781     met, the commissioner shall:
3782          (i) waive any license requirement for a license under this chapter; and
3783          (ii) issue the nonresident license applicant a nonresident third party administrator
3784     license.
3785          (b) Subsection (1)(a) applies if:
3786          (i) the nonresident license applicant:
3787          (A) is licensed [as a resident] in the nonresident license applicant's home state or
3788     designated home state at the time the nonresident license applicant applies for a nonresident
3789     third party administrator license;
3790          (B) has submitted the proper request for licensure;
3791          (C) has submitted to the commissioner:
3792          (I) the application for licensure that the nonresident license applicant submitted to the
3793     applicant's home state or designated home state; or
3794          (II) a completed uniform application; and
3795          (D) has paid the applicable fees under Section 31A-3-103;
3796          (ii) the nonresident license applicant's license in the applicant's home state or
3797     designated home state is in good standing; and
3798          (iii) the nonresident license applicant's home state or designated home state awards
3799     nonresident third party administrator licenses to residents of this state on the same basis as this
3800     state awards licenses to residents of that home state or designated home state.
3801          (2) A nonresident applicant shall execute in a form acceptable to the commissioner an
3802     agreement to be subject to the jurisdiction of the Utah commissioner and courts on any matter
3803     related to the applicant's insurance activities in Utah, on the basis of:
3804          (a) service of process under Sections 31A-2-309 and 31A-2-310; or
3805          (b) other service authorized in the Utah Rules of Civil Procedure.
3806          (3) The commissioner may verify the third party administrator's licensing status
3807     through the database maintained by:

3808          (a) the National Association of Insurance Commissioners; or
3809          (b) an affiliate or subsidiary of the National Association of Insurance Commissioners.
3810          (4) The commissioner may not assess a greater fee for an insurance license or related
3811     service to a person not residing in this state based solely on the fact that the person does not
3812     reside in this state.
3813          Section 37. Section 31A-26-102 is amended to read:
3814          31A-26-102. Definitions.
3815          As used in this chapter, unless expressly provided otherwise:
3816          (1) "Company adjuster" means a person employed by an insurer [whose regular duties
3817     include insurance adjusting], or an entity under common control or ownership with the insurer,
3818     who negotiates or settles claims on behalf of the employer.
3819          (2) "Designated home state" means the state or territory of the United States or the
3820     District of Columbia:
3821          (a) in which an insurance adjuster does not maintain the adjuster's principal:
3822          (i) place of residence; or
3823          (ii) place of business;
3824          (b) if the resident state, territory, or District of Columbia of the adjuster does not
3825     license adjusters for the line of authority sought, the adjuster has qualified for the license as if
3826     the person were a resident in the state, territory, or District of Columbia described in
3827     Subsection (2)(a), including an applicable:
3828          (i) examination requirement;
3829          (ii) fingerprint background check requirement; and
3830          (iii) continuing education requirement; and
3831          (c) the adjuster has designated the state, territory, or District of Columbia as the
3832     designated home state.
3833          (3) "Home state" means:
3834          (a) a state or territory of the United States or the District of Columbia in which an
3835     insurance adjuster:
3836          (i) maintains the adjuster's principal:
3837          (A) place of residence; or
3838          (B) place of business; and

3839          (ii) is licensed to act as a resident adjuster; or
3840          (b) if the resident state, territory, or the District of Columbia described in Subsection
3841     (3)(a) does not license adjusters for the line of authority sought, a state, territory, or the District
3842     of Columbia:
3843          (i) in which the adjuster is licensed;
3844          (ii) in which the adjuster is in good standing; and
3845          (iii) that the adjuster has designated as the adjuster's designated home state.
3846          (4) "Independent adjuster" means an insurance adjuster required to be licensed under
3847     Section 31A-26-201, who engages in insurance adjusting as a representative of one or more
3848     insurers.
3849          (5) "Insurance adjusting" or "adjusting" means directing or conducting the
3850     investigation, negotiation, or settlement of a claim under an insurance policy, on behalf of an
3851     insurer, policyholder, or a claimant under an insurance policy.
3852          (6) "Organization" means a person other than a natural person, and includes a sole
3853     proprietorship by which a natural person does business under an assumed name.
3854          (7) "Portable electronics insurance" is as defined in Section 31A-22-1802.
3855          (8) "Public adjuster" means a person required to be licensed under Section
3856     31A-26-201, who engages in insurance adjusting as a representative of insureds and claimants
3857     under insurance policies.
3858          Section 38. Section 31A-26-205 is amended to read:
3859          31A-26-205. Character requirements.
3860          Each applicant for a license under this chapter shall show to the commissioner that:
3861          (1) [he] the applicant has the good faith intent to engage in the type of business the
3862     license or licenses applied for would permit;
3863          (2) (a) if a natural person, [he is] the applicant is:
3864          (i) competent; and
3865          (ii) trustworthy[,]; or[ that,]
3866          (b) if an organization, all the partners, directors, principal officers, or persons in fact
3867     having comparable powers are trustworthy, and that [it] the applicant will transact business in
3868     such a way that all acts that may only be performed by a licensed adjuster are performed
3869     exclusively by natural persons who are licensed under this chapter to transact that business and

3870     listed on the organization's license under Section 31A-26-209; and
3871          (3) if a natural person, [he] the applicant is at least 18 years of age.
3872          Section 39. Section 31A-26-208 is amended to read:
3873          31A-26-208. Nonresident jurisdictional agreement.
3874          (1) (a) If a nonresident license applicant has a valid license from the nonresident
3875     license applicant's home state or designated home state and the conditions of Subsection (1)(b)
3876     are met, the commissioner shall:
3877          (i) waive any license requirement for a license under this chapter; and
3878          (ii) issue the nonresident license applicant a nonresident adjuster's license.
3879          (b) Subsection (1)(a) applies if:
3880          (i) the nonresident license applicant:
3881          (A) is licensed [as a resident] in the nonresident license applicant's home state or
3882     designated home state at the time the nonresident license applicant applies for a nonresident
3883     adjuster license;
3884          (B) has submitted the proper request for licensure;
3885          (C) has submitted to the commissioner:
3886          (I) the application for licensure that the nonresident license applicant submitted to the
3887     applicant's home state or designated home state; or
3888          (II) a completed uniform application; and
3889          (D) has paid the applicable fees under Section 31A-3-103;
3890          (ii) the nonresident license applicant's license in the applicant's home state or
3891     designated home state is in good standing; and
3892          (iii) the nonresident license applicant's home state or designated home state awards
3893     nonresident adjuster licenses to residents of this state on the same basis as this state awards
3894     licenses to residents of that home state or designated home state.
3895          (2) A nonresident applicant shall execute in a form acceptable to the commissioner an
3896     agreement to be subject to the jurisdiction of the commissioner and courts of this state on any
3897     matter related to the adjuster's insurance activities in this state, on the basis of:
3898          (a) service of process under Sections 31A-2-309 and 31A-2-310; or
3899          (b) other service authorized under the Utah Rules of Civil Procedure or Section
3900     78B-3-206.

3901          (3) The commissioner may verify an adjuster's licensing status through the database
3902     maintained by:
3903          (a) the National Association of Insurance Commissioners; or
3904          (b) an affiliate or subsidiary of the National Association of Insurance Commissioners.
3905          (4) The commissioner may not assess a greater fee for an insurance license or related
3906     service to a person not residing in this state based solely on the fact that the person does not
3907     reside in this state.
3908          Section 40. Section 31A-27a-111 is amended to read:
3909          31A-27a-111. Actions by and against the receiver.
3910          (1) (a) An allegation by the receiver of improper or fraudulent conduct against a person
3911     may not be the basis of a defense to the enforcement of a contractual obligation owed to the
3912     insurer by a third party.
3913          (b) Notwithstanding Subsection (1)(a), a third party described in this Subsection (1) is
3914     not barred by this section from seeking to establish independently as a defense that the conduct
3915     is materially and substantially related to the contractual obligation for which enforcement is
3916     sought.
3917          (2) (a) Subject to Subsection (2)(b), a prior wrongful or negligent action of any present
3918     or former officer, manager, director, trustee, owner, employee, or agent of the insurer may not
3919     be asserted as a defense to a claim by the receiver:
3920          (i) under a theory of:
3921          (A) estoppel;
3922          (B) comparative fault;
3923          (C) intervening cause;
3924          (D) proximate cause;
3925          (E) reliance; or
3926          (F) mitigation of damages; or
3927          (ii) otherwise.
3928          (b) Notwithstanding Subsection (2)(a):
3929          (i) the affirmative defense of fraud in the inducement may be asserted against the
3930     receiver in a claim based on a contract; and
3931          (ii) a principal under a surety bond or a surety undertaking is entitled to credit against

3932     any reimbursement obligation to the receiver for the value of any property pledged to secure the
3933     reimbursement obligation to the extent that:
3934          (A) the receiver has possession or control of the property; or
3935          (B) the insurer or its agents misappropriated, including commingling, the property.
3936          (c) Evidence of fraud in the inducement is admissible only if it is contained in the
3937     records of the insurer.
3938          (3) Action or inaction by an insurance regulatory authority may not be asserted as a
3939     defense to a claim by the receiver.
3940          (4) (a) Subject to Subsection (4)(b), a judgment or order entered against an insured or
3941     the insurer in contravention of a stay or injunction under this chapter, or at any time by default
3942     or collusion, may not be considered as evidence of liability or of the quantum of damages in
3943     adjudicating claims filed in the estate arising out of the subject matter of the judgment or order.
3944          (b) Subsection (4)(a) does not apply to an affected guaranty association's claim for
3945     amounts paid on a settlement or judgment in pursuit of the affected guaranty association's
3946     statutory obligations.
3947          (5) (a) Subject to Subsection (5)(b), the following do not affect the amount that a
3948     receiver may recover from a third party, regardless of any provision in an agreement to the
3949     contrary:
3950          (i) the insurer's insolvency; or
3951          (ii) the insurer's or receiver's failure to pay all or a portion of an amount or a claim to
3952     the third party.
3953          (b) If an agreement between the insurer and a third party requires a payment by the
3954     insurer before the insurer may recover from the third party, the amount the receiver may
3955     recover from the third party under Subsection (5)(a) is limited to an amount equal to the greater
3956     of:
3957          (i) the amount paid by the insurer or by another person on behalf of the insurer to the
3958     third party; or
3959          (ii) the amount allowed as a claim for payment under:
3960          (A) an approved report described in Section 31A-27a-608;
3961          (B) an order of the receivership court; or
3962          (C) a plan of rehabilitation.

3963          [(5)] (6) The receiver may not be considered a governmental entity for the purposes of
3964     any state law awarding fees to a litigant who prevails against a governmental entity.
3965          Section 41. Section 31A-27a-608 is amended to read:
3966          31A-27a-608. Liquidator's recommendations to the receivership court.
3967          (1) The liquidator shall, from time to time as determined by the liquidator, present to
3968     the receivership court for approval, reports of claims settled or determined by the liquidator
3969     under Section 31A-27a-603.
3970          (2) A report required by this section shall include information identifying:
3971          (a) the claim;
3972          (b) the amount of the claim; and
3973          (c) the priority class of the claim.
3974          (3) (a) A claim included in a report described in this section and approved by the
3975     receivership court is a liability of the estate.
3976          (b) An insurer's insolvency does not affect the amount of a liability described in
3977     Subsection (3)(a), regardless of any provision in an agreement to the contrary.
3978          Section 42. Section 31A-30-210 is amended to read:
3979          31A-30-210. State contract requirements -- Employer default plans.
3980          (1) This section applies to an employer who is required to offer [its] the employer's
3981     employees a health benefit plan as a condition of qualifying for a state contract under:
3982          (a) Section 17B-2a-818.5;
3983          (b) Section 19-1-206;
3984          [(c) Subsection 63A-5-205(3);]
3985          (c) Subsection 63A-5-205.5;
3986          (d) Section 63C-9-403;
3987          (e) Section 72-6-107.5; and
3988          (f) Section 79-2-404.
3989          (2) An employer described in Subsection (1) shall, when selecting the default plan
3990     required in Section 31A-30-204, select a default plan that is "qualified health insurance
3991     coverage" as defined in the sections listed in Subsections (1)(a) through (f).
3992          Section 43. Section 31A-43-303 is amended to read:
3993          31A-43-303. Stop-loss insurance disclosure.

3994          A stop-loss insurance contract delivered, issued for delivery, or entered into shall
3995     include the disclosure exhibit required by the commissioner through administrative rule, which
3996     shall include at least the following information:
3997          (1) the complete costs for the stop-loss contract;
3998          (2) the date on which the insurance takes effect and terminates, including renewability
3999     provisions;
4000          (3) the aggregate attachment point and the specific attachment point;
4001          (4) limitations on coverage;
4002          (5) an explanation of monthly accommodation and disclosure about any monthly
4003     accommodation features included in the stop-loss contract;
4004          (6) a description of terminal liability funding, including the cost of processing claims
4005     before and after the termination of the contract; [and]
4006          (7) maximum claims liability to the employer[.]; and
4007          (8) a summary of the policy.
4008          Section 44. Section 31A-45-403 is enacted to read:
4009          31A-45-403. Essential health benefits.
4010          (1) The state designates the state's own essential health benefits and does not accept a
4011     federal determination of the essential health benefits under the PPACA.
4012          (2) Subject to Subsections (3) and (4), the commissioner shall make rules in
4013     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that designate the
4014     essential health benefits for the state.
4015          (3) Before the commissioner makes rules in accordance with Subsection (2):
4016          (a) the commissioner shall present a summary of the commissioner's planned rules to
4017     the Health Reform Task Force; and
4018          (b) the Health Reform Task Force shall recommend whether the commissioner makes
4019     rules in accordance with the presented summary.
4020          (4) The essential health benefits plan:
4021          (a) may not include a state mandate if the inclusion of the state mandate would require
4022     the state to contribute to premium subsidies under the PPACA; and
4023          (b) may add benefits in addition to the benefits included in a benchmark plan adopted
4024     in accordance with this section if the additional benefits are mandated under the PPACA.

4025          Section 45. Section 34A-2-107 is amended to read:
4026          34A-2-107. Appointment of workers' compensation advisory council --
4027     Composition -- Terms of members -- Duties -- Compensation.
4028          (1) The commissioner shall appoint a workers' compensation advisory council
4029     composed of:
4030          (a) the following voting members:
4031          (i) five employer representatives; and
4032          (ii) five employee representatives; and
4033          (b) the following nonvoting members:
4034          (i) a representative of the workers' compensation insurance carrier that provides
4035     workers' compensation insurance under Section 31A-22-1001;
4036          (ii) a representative of a workers' compensation insurance carrier different from the
4037     workers' compensation insurance carrier listed in Subsection (1)(b)(i);
4038          (iii) a representative of health care providers;
4039          (iv) the Utah insurance commissioner or the insurance commissioner's designee; and
4040          (v) the commissioner or the commissioner's designee.
4041          (2) Employers and employees shall consider nominating members of groups who
4042     historically may have been excluded from the council, such as women, minorities, and
4043     individuals with disabilities.
4044          (3) (a) Except as required by Subsection (3)(b), as terms of current council members
4045     expire, the commissioner shall appoint each new member or reappointed member to a two-year
4046     term beginning July 1 and ending June 30.
4047          (b) Notwithstanding the requirements of Subsection (3)(a), the commissioner shall, at
4048     the time of appointment or reappointment, adjust the length of terms to ensure that the terms of
4049     council members are staggered so that approximately half of the council is appointed every two
4050     years.
4051          (4) (a) When a vacancy occurs in the membership for any reason, the replacement shall
4052     be appointed for the unexpired term.
4053          (b) The commissioner shall terminate the term of a council member who ceases to be
4054     representative as designated by the member's original appointment.
4055          (5) The council shall confer at least quarterly for the purpose of advising the

4056     commission, the division, and the Legislature on:
4057          (a) the Utah workers' compensation and occupational disease laws;
4058          (b) the administration of the laws described in Subsection (5)(a); and
4059          (c) rules related to the laws described in Subsection (5)(a).
4060          (6) Regarding workers' compensation, rehabilitation, and reemployment of employees
4061     who acquire a disability because of an industrial injury or occupational disease the council
4062     shall:
4063          (a) offer advice on issues requested by:
4064          (i) the commission;
4065          (ii) the division; and
4066          (iii) the Legislature; and
4067          (b) make recommendations to:
4068          (i) the commission; and
4069          (ii) the division.
4070          [(7) The council shall study how hospital costs may be reduced for purposes of medical
4071     benefits for workers' compensation. By no later than November 30, 2017, the council shall
4072     submit, in accordance with Section 68-3-14, a written report to the Business and Labor Interim
4073     Committee containing the council's recommendations.]
4074          (7) (a) The council shall:
4075          (i) study how to reduce hospital costs for purposes of medical benefits for workers'
4076     compensation;
4077          (ii) study hospital billing and payment trends in the state;
4078          (iii) study hospital fee schedules used in other states; and
4079          (iv) collect information from third-party hospital bill review companies in the state or
4080     region to identify an average reimbursement rate that represents the approximate rate at which
4081     a workers' compensation insurance carrier or self-insured employer should expect to reimburse
4082     a hospital for billed hospital fees for covered medical services in the state.
4083          (b) In accordance with Section 68-3-14, the council shall submit a written report to the
4084     Business and Labor Interim Committee no later than September 1, 2019, 2020, and 2021. Each
4085     written report shall include:
4086          (i) recommendations on how to reduce hospital costs for purposes of medical benefits

4087     for workers' compensation;
4088          (ii) aggregate data on hospital billing and payment trends in the state;
4089          (iii) the results of the council's study of hospital fee schedules from other states; and
4090          (iv) the approximate rate at which a workers' compensation insurance carrier or
4091     self-insured employer should expect to reimburse a hospital for billed hospital fees for covered
4092     medical services, calculated in accordance with Subsection (7)(a)(iv).
4093          (c) For each report described in Subsection (7)(b), the commission may contract with a
4094     third-party expert to assist with the council's duties described in Subsections (7)(a) and (b).
4095          (8) The commissioner or the commissioner's designee shall serve as the chair of the
4096     council and call the necessary meetings.
4097          (9) The commission shall provide staff support to the council.
4098          (10) A member may not receive compensation or benefits for the member's service, but
4099     may receive per diem and travel expenses in accordance with:
4100          (a) Section 63A-3-106;
4101          (b) Section 63A-3-107; and
4102          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
4103     63A-3-107.
4104          Section 46. Section 34A-2-705 is amended to read:
4105          34A-2-705. Industrial Accident Restricted Account.
4106          (1) As used in this section:
4107          (a) "Account" means the Industrial Accident Restricted Account created by this
4108     section.
4109          (b) "Advisory council" means the state workers' compensation advisory council created
4110     under Section 34A-2-107.
4111          (2) There is created in the General Fund a restricted account known as the "Industrial
4112     Accident Restricted Account."
4113          (3) (a) The account is funded from:
4114          (i) .5% of the premium income remitted to the state treasurer and credited to the
4115     account pursuant to Subsection 59-9-101(2)(c)(iv); and
4116          (ii) amounts deposited under Section 34A-2-1003.
4117          (b) If the balance in the account exceeds $500,000 at the close of a fiscal year, the

4118     excess shall be transferred to the Uninsured Employers' Fund created under Section 34A-2-704.
4119          (4) (a) From money appropriated by the Legislature from the account to the
4120     commission and subject to the requirements of this section, the commission may fund:
4121          (i) the activities of the Division of Industrial Accidents described in Section
4122     34A-1-202;
4123          (ii) the activities of the Division of Adjudication described in Section 34A-1-202;
4124     [and]
4125          (iii) the activities of the commission described in Section 34A-2-1005[.]; and
4126          (iv) the activities of the commission described in Subsection 34A-2-107(7)(c), up to
4127     $50,000 for each of the three reports described in Subsection 34A-2-107(7)(b).
4128          (b) The money deposited in the account may not be used for a purpose other than a
4129     purpose described in this Subsection (4), including an administrative cost or another activity of
4130     the commission unrelated to the account.
4131          (5) (a) Each year before the public hearing required by Subsection 59-9-101(2)(d)(i),
4132     the commission shall report to the advisory council regarding:
4133          (i) the commission's budget request to the governor for the next fiscal year related to:
4134          (A) the Division of Industrial Accidents; and
4135          (B) the Division of Adjudication;
4136          (ii) the expenditures of the commission for the fiscal year in which the commission is
4137     reporting related to:
4138          (A) the Division of Industrial Accidents; and
4139          (B) the Division of Adjudication;
4140          (iii) revenues generated from the premium assessment under Section 59-9-101 on an
4141     admitted insurer writing workers' compensation insurance in this state and on a self-insured
4142     employer under Section 34A-2-202; and
4143          (iv) money deposited under Section 34A-2-1003.
4144          (b) The commission shall annually report to the governor and the Legislature
4145     regarding:
4146          (i) the use of the money appropriated to the commission under this section;
4147          (ii) revenues generated from the premium assessment under Section 59-9-101 on an
4148     admitted insurer writing workers' compensation insurance in this state and on a self-insured

4149     employer under Section 34A-2-202; and
4150          (iii) money deposited under Section 34A-2-1003.
4151          Section 47. Section 63A-5-205 is amended to read:
4152          63A-5-205. Contracting powers of director -- Retainage.
4153          [(1) As used in this section:]
4154          [(a) "Capital developments" means the same as that term is defined in Section
4155     63A-5-104.]
4156          [(b) "Capital improvements" means the same as that term is defined in Section
4157     63A-5-104.]
4158          [(c) "Employee" means an "employee," "worker," or "operative" as defined in Section
4159     34A-2-104 who:]
4160          [(i) works at least 30 hours per calendar week; and]
4161          [(ii) meets employer eligibility waiting requirements for health care insurance which
4162     may not exceed the first day of the calendar month following 60 days from the date of hire.]
4163          [(d) "Health benefit plan" means the same as that term is defined in Section
4164     31A-1-301.]
4165          [(e) "Qualified health insurance coverage" means the same as that term is defined in
4166     Section 26-40-115.]
4167          [(f) "Subcontractor" means the same as that term is defined in Section 63A-5-208.]
4168          [(2)] (1) In accordance with Title 63G, Chapter 6a, Utah Procurement Code, the
4169     director may:
4170          (a) subject to [Subsections (3) and (4)] Section 63A-5-205.5, enter into [contracts] a
4171     contract for any work or professional services [which] that the division or the State Building
4172     Board may do or have done; and
4173          (b) as a condition of any contract for architectural or engineering services, prohibit the
4174     architect or engineer from retaining a sales or agent engineer for the necessary design work.
4175          [(3) Except as provided in Subsection (4), this Subsection (3) applies to]
4176           [all design or construction contracts entered into by the division or the State Building
4177     Board on or after July 1, 2009, and:]
4178          [(a) applies to a prime contractor if the prime contract is in the amount of $2,000,000
4179     or greater at the original execution of the contract; and]

4180          [(b) applies to a subcontractor if the subcontract is in the amount of $1,000,000 or
4181     greater at the original execution of the contract.]
4182          [(4) Subsection (3) does not apply:]
4183          [(a) if the application of Subsection (3) jeopardizes the receipt of federal funds;]
4184          [(b) if the contract is a sole source contract;]
4185          [(c) if the contract is an emergency procurement; or]
4186          [(d) to a change order as defined in Section 63G-6a-103, or a modification to a
4187     contract, when the contract does not meet the threshold required by Subsection (3).]
4188          [(5) A person who intentionally uses change orders or contract modifications to
4189     circumvent the requirements of Subsection (3) is guilty of an infraction.]
4190          [(6) (a) A contractor subject to Subsection (3) shall demonstrate to the director that the
4191     contractor has and will maintain an offer of qualified health insurance coverage for the
4192     contractor's employees and the employees' dependents.]
4193          [(b) If a subcontractor of the contractor is subject to Subsection (3), the contractor
4194     shall:]
4195          [(i) place a requirement in the subcontract that the subcontractor shall obtain and
4196     maintain an offer of qualified health insurance coverage for the subcontractor's employees and
4197     the employees' dependants during the duration of the subcontract; and]
4198          [(ii) certify to the director that the subcontractor has and will maintain an offer of
4199     qualified health insurance coverage for the subcontractor's employees and the employees'
4200     dependents during the duration of the prime contract.]
4201          [(c) (i) A contractor who fails to meet the requirements of Subsection (6)(a) during the
4202     duration of the contract is subject to penalties in accordance with administrative rules adopted
4203     by the division under Subsection (7).]
4204          [(ii) A contractor is not subject to penalties for the failure of a subcontractor to meet
4205     the requirements of Subsection (6)(b).]
4206          [(iii) A subcontractor who fails to meet the requirements of Subsection (6)(b) during
4207     the duration of the contract is subject to penalties in accordance with administrative rules
4208     adopted by the division under Subsection (7).]
4209          [(iv) A subcontractor is not subject to penalties for the failure of a contractor to meet
4210     the requirements of Subsection (6)(a).]

4211          [(7) The division shall adopt administrative rules:]
4212          [(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;]
4213          [(b) in coordination with:]
4214          [(i) the Department of Environmental Quality in accordance with Section 19-1-206;]
4215          [(ii) the Department of Natural Resources in accordance with Section 79-2-404;]
4216          [(iii) a public transit district in accordance with Section 17B-2a-818.5;]
4217          [(iv) the State Capitol Preservation Board in accordance with Section 63C-9-403;]
4218          [(v) the Department of Transportation in accordance with Section 72-6-107.5; and]
4219          [(vi) the Legislature's Administrative Rules Review Committee; and]
4220          [(c) that establish:]
4221          [(i) the requirements and procedures a contractor must follow to demonstrate to the
4222     director compliance with Subsections (3) through (10) that shall include:]
4223          [(A) that a contractor shall demonstrate compliance with Subsection (6)(a) or (b) at the
4224     time of the execution of each initial contract described in Subsection (3);]
4225          [(B) that the contractor's compliance is subject to an audit by the division or the Office
4226     of the Legislative Auditor General; and]
4227          [(C) that the actuarially equivalent determination required for the qualified health
4228     insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
4229     department or division with a written statement of actuarial equivalency, which is not more
4230     than one year old, regarding the contractor's offer of qualified health coverage from an actuary
4231     selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
4232     developing the employer group's premium rates;]
4233          [(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
4234     violates the provisions of Subsections (3) through (10), which may include:]
4235          [(A) a three-month suspension of the contractor or subcontractor from entering into
4236     future contracts with the state upon the first violation;]
4237          [(B) a six-month suspension of the contractor or subcontractor from entering into
4238     future contracts with the state upon the second violation;]
4239          [(C) an action for debarment of the contractor or subcontractor in accordance with
4240     Section 63G-6a-904 upon the third or subsequent violation; and]
4241          [(D) monetary penalties which may not exceed 50% of the amount necessary to

4242     purchase qualified health insurance coverage for an employee and the dependents of an
4243     employee of the contractor or subcontractor who was not offered qualified health insurance
4244     coverage during the duration of the contract; and]
4245          [(iii) a website on which the department shall post the commercially equivalent
4246     benchmark, for the qualified health insurance coverage identified in Subsection (1)(e), that is
4247     provided by the Department of Health, in accordance with Subsection 26-40-115(2).]
4248          [(8) (a) In addition to the penalties imposed under Subsection (7)(c), a contractor or
4249     subcontractor who intentionally violates the provisions of this section shall be liable to the
4250     employee for health care costs that would have been covered by qualified health insurance
4251     coverage.]
4252          [(b) An employer has an affirmative defense to a cause of action under Subsection
4253     (8)(a) if:]
4254          [(i) the employer relied in good faith on a written statement of actuarial equivalency
4255     provided by:]
4256          [(A) an actuary; or]
4257          [(B) an underwriter who is responsible for developing the employer group's premium
4258     rates; or]
4259          [(ii) the department determines that compliance with this section is not required under
4260     the provisions of Subsection (4).]
4261          [(c) An employee has a private right of action only against the employee's employer to
4262     enforce the provisions of this Subsection (8).]
4263          [(9) Any penalties imposed and collected under this section shall be deposited into the
4264     Medicaid Restricted Account created by Section 26-18-402.]
4265          [(10) The failure of a contractor or subcontractor to provide qualified health insurance
4266     coverage as required by this section:]
4267          [(a) may not be the basis for a protest or other action from a prospective bidder,
4268     offeror, or contractor under Section 63G-6a-1602 or any other provision in Title 63G, Chapter
4269     6a, Utah Procurement Code; and]
4270          [(b) may not be used by the procurement entity or a prospective bidder, offeror, or
4271     contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
4272     or construction.]

4273          [(11)] (2) The judgment of the director as to the responsibility and qualifications of a
4274     bidder is conclusive, except in case of fraud or bad faith.
4275          [(12)] (3) The division shall make all payments to the contractor for completed work in
4276     accordance with the contract and pay the interest specified in the contract on any payments that
4277     are late.
4278          [(13)] (4) If any payment on a contract with a private contractor to do work for the
4279     division or the State Building Board is retained or withheld, it shall be retained or withheld and
4280     released as provided in Section 13-8-5.
4281          Section 48. Section 63A-5-205.5 is enacted to read:
4282          63A-5-205.5. Health insurance requirements -- Penalties.
4283          (1) As used in this section:
4284          (a) "Aggregate" means the sum of all contracts, change orders, and modifications
4285     related to a single project.
4286          (b) "Change order" means the same as that term is defined in Section 63G-6a-103.
4287          (c) "Employee" means, as defined in Section 34A-2-104, an "employee," "worker," or
4288     "operative" who:
4289          (i) works at least 30 hours per calendar week; and
4290          (ii) meets employer eligibility waiting requirements for health care insurance, which
4291     may not exceed the first day of the calendar month following 60 days after the day on which
4292     the individual is hired.
4293          (d) "Health benefit plan" means the same as that term is defined in Section 31A-1-301.
4294          (e) "Qualified health insurance coverage" means the same as that term is defined in
4295     Section 26-40-115.
4296          (f) "Subcontractor" means the same as that term is defined in Section 63A-5-208.
4297          (2) Except as provided in Subsection (3), the requirements of this section apply to:
4298          (a) a contractor of a design or construction contract entered into by the division or the
4299     State Building Board on or after July 1, 2009, if the prime contract is in an aggregate amount
4300     equal to or greater than $2,000,000; and
4301          (b) a subcontractor of a contractor of a design or construction contract entered into by
4302     the division or State Building Board on or after July 1, 2009, if the subcontract is in an
4303     aggregate amount equal to or greater than $1,000,000.

4304          (3) The requirements of this section do not apply to a contractor or subcontractor
4305     described in Subsection (2) if:
4306          (a) the application of this section jeopardizes the receipt of federal funds;
4307          (b) the contract is a sole source contract; or
4308          (c) the contract is an emergency procurement.
4309          (4) A person that intentionally uses change orders, contract modifications, or multiple
4310     contracts to circumvent the requirements of this section is guilty of an infraction.
4311          (5) (a) A contractor that is subject to the requirements of this section shall demonstrate
4312     to the director that the contractor has and will maintain an offer of qualified health insurance
4313     coverage for the contractor's employees and the employees' dependents by submitting to the
4314     director a written statement that:
4315          (i) Ŝ→ [
certifies that] ←Ŝ the contractor offers qualified health insurance coverage Ŝ→ [in
4315a     accordance
] that complies ←Ŝ
4316     with Section 26-40-115;
4317          (ii) is from:
4318          (A) an actuary selected by the contractor or the contractor's insurer; or
4319          (B) an underwriter who is responsible for developing the employer group's premium
4320     rates; and
4321          (iii) was created within one year before the day on which the statement is submitted.
4322          (b) A contractor that is subject to the requirements of this section shall:
4323          (i) place a requirement in each of the contractor's subcontracts that a subcontractor that
4324     is subject to the requirements of this section shall obtain and maintain an offer of qualified
4325     health insurance coverage for the subcontractor's employees and the employees' dependents
4326     during the duration of the subcontract; and
4327          (ii) obtain from a subcontractor that is subject to the requirements of this section a
4328     written statement that:
4329          (A) Ŝ→ [
certifies that] ←Ŝ the subcontractor offers qualified health insurance coverage
4329a     Ŝ→ [
in
4330     accordance
] that complies ←Ŝ
with Section 26-40-115;
4331          (B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
4332     underwriter who is responsible for developing the employer group's premium rates; and
4333          (C) was created within one year before the day on which the contractor obtains the
4334     statement.

4335          (c) (i) (A) A contractor that fails to maintain an offer of qualified health insurance
4336     coverage described in Subsection (5)(a) during the duration of the contract is subject to
4337     penalties in accordance with administrative rules adopted by the division under Subsection (6).
4338          (B) A contractor is not subject to penalties for the failure of a subcontractor to obtain
4339     and maintain an offer of qualified health insurance coverage described in Subsection (5)(b)(i).
4340          (ii) (A) A subcontractor that fails to obtain and maintain an offer of qualified health
4341     insurance coverage described in Subsection (5)(b)(i) during the duration of the subcontract is
4342     subject to penalties in accordance with administrative rules adopted by the division under
4343     Subsection (6).
4344          (B) A subcontractor is not subject to penalties for the failure of a contractor to maintain
4345     an offer of qualified health insurance coverage described in Subsection (5)(a).
4346          (6) The division shall adopt administrative rules:
4347          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
4348          (b) in coordination with:
4349          (i) the Department of Environmental Quality in accordance with Section 19-1-206;
4350          (ii) the Department of Natural Resources in accordance with Section 79-2-404;
4351          (iii) a public transit district in accordance with Section 17B-2a-818.5;
4352          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403;
4353          (v) the Department of Transportation in accordance with Section 72-6-107.5; and
4354          (vi) the Legislature's Administrative Rules Review Committee; and
4355          (c) that establish:
4356          (i) the requirements and procedures a contractor and a subcontractor shall follow to
4357     demonstrate compliance with this section, including:
4358          (A) that a contractor or subcontractor's compliance with this section is subject to an
4359     audit by the division or the Office of the Legislative Auditor General;
4360          (B) that a contractor that is subject to the requirements of this section shall obtain a
4361     written statement described in Subsection (5)(a); and
4362          (C) that a subcontractor that is subject to the requirements of this section shall obtain a
4363     written statement described in Subsection (5)(b)(ii);
4364          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
4365     violates the provisions of this section, which may include:

4366          (A) a three-month suspension of the contractor or subcontractor from entering into
4367     future contracts with the state upon the first violation;
4368          (B) a six-month suspension of the contractor or subcontractor from entering into future
4369     contracts with the state upon the second violation;
4370          (C) an action for debarment of the contractor or subcontractor in accordance with
4371     Section 63G-6a-904 upon the third or subsequent violation; and
4372          (D) monetary penalties which may not exceed 50% of the amount necessary to
4373     purchase qualified health insurance coverage for employees and dependents of employees of
4374     the contractor or subcontractor who were not offered qualified health insurance coverage
4375     during the duration of the contract; and
4376          (iii) a website on which the department shall post the commercially equivalent
4377     benchmark for the qualified health insurance coverage that is provided by the Department of
4378     Health in accordance with Subsection 26-40-115(2).
4379          (7) (a) During the duration of a contract, the division may perform an audit to verify a
4380     contractor or subcontractor's compliance with this section.
4381          (b) Upon the division's request, a contractor or subcontractor shall provide the division:
4382          (i) a signed actuarial certification that the coverage the contractor or subcontractor
4383     offers is qualified health insurance coverage; or
4384          (ii) all relevant documents and information necessary for the division to determine
4385     compliance with this section.
4386          (c) If a contractor or subcontractor provides the documents and information described
4387     in Subsection (7)(b)(ii), the Insurance Department shall assist the division in determining if the
4388     coverage the contractor or subcontractor offers is qualified health insurance coverage.
4389          (8) (a) (i) In addition to the penalties imposed under Subsection (6)(c)(ii), a contractor
4390     or subcontractor that intentionally violates the provisions of this section is liable to the
4391     employee for health care costs that would have been covered by qualified health insurance
4392     coverage.
4393          (ii) An employer has an affirmative defense to a cause of action under Subsection
4394     (8)(a) if:
4395          (A) the employer relied in good faith on a written statement described in Subsection
4396     (5)(a) or (5)(b)(ii); or

4397          (B) the department determines that compliance with this section is not required under
4398     the provisions of Subsection (3).
4399          (b) An employee has a private right of action only against the employee's employer to
4400     enforce the provisions of this Subsection (8).
4401          (9) Any penalties imposed and collected under this section shall be deposited into the
4402     Medicaid Restricted Account created by Section 26-18-402.
4403          (10) The failure of a contractor or subcontractor to provide qualified health insurance
4404     coverage as required by this section:
4405          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
4406     or contractor under:
4407          (i) Section 63G-6a-1602; or
4408          (ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
4409          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
4410     contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
4411     or construction.
4412          Section 49. Section 63C-9-403 is amended to read:
4413          63C-9-403. Contracting power of executive director -- Health insurance coverage.
4414          (1) [For purposes of] As used in this section:
4415          (a) "Aggregate" means the sum of all contracts, change orders, and modifications
4416     related to a single project.
4417          (b) "Change order" means the same as that term is defined in Section 63G-6a-103.
4418          [(a)] (c) "Employee" means, as defined in Section 34A-2-104, an "employee,"
4419     "worker," or "operative" [as defined in Section 34A-2-104] who:
4420          (i) works at least 30 hours per calendar week; and
4421          (ii) meets employer eligibility waiting requirements for health care insurance, which
4422     may not exceed the first of the calendar month following 60 days [from the date of hire] after
4423     the day on which the individual is hired.
4424          [(b)] (d) "Health benefit plan" means the same as that term is defined in Section
4425     31A-1-301.
4426          [(c)] (e) "Qualified health insurance coverage" means the same as that term is defined
4427     in Section 26-40-115.

4428          [(d)] (f) "Subcontractor" means the same as that term is defined in Section 63A-5-208.
4429          [(2) (a) Except as provided in Subsection (3), this section applies to a design or
4430     construction contract entered into by the board or on behalf of the board on or after July 1,
4431     2009, and to a prime contractor or a subcontractor in accordance with Subsection (2)(b).]
4432          [(b) (i) A prime contractor is subject to this section if the prime contract is in the
4433     amount of $2,000,000 or greater at the original execution of the contract.]
4434          [(ii) A subcontractor is subject to this section if a subcontract is in the amount of
4435     $1,000,000 or greater at the original execution of the contract.]
4436          [(3) This section does not apply if:]
4437          (2) Except as provided in Subsection (3), the requirements of this section apply to:
4438          (a) a contractor of a design or construction contract entered into by the board, or on
4439     behalf of the board, on or after July 1, 2009, if the prime contract is in an aggregate amount
4440     equal to or greater than $2,000,000; and
4441          (b) a subcontractor of a contractor of a design or construction contract entered into by
4442     the board, or on behalf of the board, on or after July 1, 2009, if the subcontract is in an
4443     aggregate amount equal to or greater than $1,000,000.
4444          (3) The requirements of this section do not apply to a contractor or subcontractor
4445     described in Subsection (2) if:
4446          (a) the application of this section jeopardizes the receipt of federal funds;
4447          (b) the contract is a sole source contract; or
4448          (c) the contract is an emergency procurement.
4449          [(4) (a) This section does not apply to a change order as defined in Section
4450     63G-6a-103, or a modification to a contract, when the contract does not meet the initial
4451     threshold required by Subsection (2).]
4452          [(b)] (4) A person [who] that intentionally uses change orders [or], contract
4453     modifications, or multiple contracts to circumvent the requirements of [Subsection (2)] this
4454     section is guilty of an infraction.
4455          (5) (a) A contractor subject to [Subsection (2)] the requirements of this section shall
4456     demonstrate to the executive director that the contractor has and will maintain an offer of
4457     qualified health insurance coverage for the contractor's employees and the employees'
4458     dependents during the duration of the contract[.] by submitting to the executive director a

4459     written statement that:
4460          [(b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
4461     shall:]
4462          (i) Ŝ→ [
certifies that] ←Ŝ the contractor offers qualified health insurance coverage Ŝ→ [in
4462a     accordance
] that complies ←Ŝ
4463     with Section 26-40-115;
4464          (ii) is from:
4465          (A) an actuary selected by the contractor or the contractor's insurer; or
4466          (B) an underwriter who is responsible for developing the employer group's premium
4467     rates; and
4468          (iii) was created within one year before the day on which the statement is submitted.
4469          (b) A contractor that is subject to the requirements of this section shall:
4470          (i) place a requirement in [the subcontract that the subcontractor] each of the
4471     contractor's subcontracts that a subcontractor that is subject to the requirements of this section
4472     shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
4473     employees and the employees' dependents during the duration of the subcontract; and
4474          [(ii) certify to the executive director that the subcontractor has and will maintain an
4475     offer of qualified health insurance coverage for the subcontractor's employees and the
4476     employees' dependents during the duration of the prime contract.]
4477          (ii) obtain from a subcontractor that is subject to the requirements of this section a
4478     written statement that:
4479          (A) Ŝ→ [
certifies that] ←Ŝ the subcontractor offers qualified health insurance coverage
4479a     Ŝ→ [
in
4480     accordance
] that complies ←Ŝ
with Section 26-40-115;
4481          (B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
4482     underwriter who is responsible for developing the employer group's premium rates; and
4483          (C) was created within one year before the day on which the contractor obtains the
4484     statement.
4485          (c) (i) (A) A contractor [who fails to meet the requirements of] that fails to maintain an
4486     offer of qualified health insurance coverage as described in Subsection (5)(a) during the
4487     duration of the contract is subject to penalties in accordance with administrative rules adopted
4488     by the division under Subsection (6).
4489          (B) A contractor is not subject to penalties for the failure of a subcontractor to [meet

4490     the requirements of] obtain and maintain an offer of qualified health insurance coverage
4491     described in Subsection (5)(b)(i).
4492          (ii) (A) A subcontractor [who fails to meet the requirements of] that fails to obtain and
4493     maintain an offer of qualified health insurance coverage described in Subsection (5)(b)(i)
4494     during the duration of the [contract] subcontract is subject to penalties in accordance with
4495     administrative rules adopted by the department under Subsection (6).
4496          (B) A subcontractor is not subject to penalties for the failure of a contractor to [meet
4497     the requirements of] maintain an offer of qualified health insurance coverage described in
4498     Subsection (5)(a).
4499          (6) The department shall adopt administrative rules:
4500          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
4501          (b) in coordination with:
4502          (i) the Department of Environmental Quality in accordance with Section 19-1-206;
4503          (ii) the Department of Natural Resources in accordance with Section 79-2-404;
4504          (iii) the State Building Board in accordance with Section [63A-5-205] 63A-5-205.5;
4505          (iv) a public transit district in accordance with Section 17B-2a-818.5;
4506          (v) the Department of Transportation in accordance with Section 72-6-107.5; and
4507          (vi) the Legislature's Administrative Rules Review Committee; and
4508          (c) that establish:
4509          (i) the requirements and procedures a contractor [must] and a subcontractor shall
4510     follow to demonstrate [to the executive director] compliance with this section [that shall
4511     include], including:
4512          [(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
4513     time of the execution of each initial contract described in Subsection (2)(b);]
4514          [(B) that the contractor's]
4515          (A) that a contractor or subcontractor's compliance with this section is subject to an
4516     audit by the department or the Office of the Legislative Auditor General; [and]
4517          [(C) that the actuarially equivalent determination required for the qualified health
4518     insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
4519     department or division with a written statement of actuarial equivalency, which is no more than
4520     one year old, regarding the contractor's offer of qualified health coverage from an actuary

4521     selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
4522     developing the employer group's premium rates;]
4523          (B) that a contractor that is subject to the requirements of this section shall obtain a
4524     written statement described in Subsection (5)(a); and
4525          (C) that a subcontractor that is subject to the requirements of this section shall obtain a
4526     written statement described in Subsection (5)(b)(ii);
4527          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
4528     violates the provisions of this section, which may include:
4529          (A) a three-month suspension of the contractor or subcontractor from entering into
4530     future contracts with the state upon the first violation;
4531          (B) a six-month suspension of the contractor or subcontractor from entering into future
4532     contracts with the state upon the second violation;
4533          (C) an action for debarment of the contractor or subcontractor in accordance with
4534     Section 63G-6a-904 upon the third or subsequent violation; and
4535          (D) monetary penalties which may not exceed 50% of the amount necessary to
4536     purchase qualified health insurance coverage for employees and dependents of employees of
4537     the contractor or subcontractor who were not offered qualified health insurance coverage
4538     during the duration of the contract; and
4539          (iii) a website on which the department shall post the commercially equivalent
4540     benchmark, for the qualified health insurance coverage identified in Subsection (1)[(c)](e), that
4541     is provided by the Department of Health, in accordance with Subsection 26-40-115(2).
4542          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c)(ii), a contractor
4543     or subcontractor who intentionally violates the provisions of this section [shall be] is liable to
4544     the employee for health care costs that would have been covered by qualified health insurance
4545     coverage.
4546          (ii) An employer has an affirmative defense to a cause of action under Subsection
4547     (7)(a)(i) if:
4548          (A) the employer relied in good faith on a written statement [of actuarial equivalency
4549     provided by:] described in Subsection (5)(a) or (5)(b)(ii); or
4550          [(I) an actuary; or]
4551          [(II) an underwriter who is responsible for developing the employer group's premium

4552     rates; or]
4553          (B) the department determines that compliance with this section is not required under
4554     the provisions of Subsection (3) [or (4)].
4555          (b) An employee has a private right of action only against the employee's employer to
4556     enforce the provisions of this Subsection (7).
4557          (8) Any penalties imposed and collected under this section shall be deposited into the
4558     Medicaid Restricted Account created in Section 26-18-402.
4559          (9) The failure of a contractor or subcontractor to provide qualified health insurance
4560     coverage as required by this section:
4561          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
4562     or contractor under:
4563          (i) Section 63G-6a-1602; or
4564          (ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
4565          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
4566     contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
4567     or construction.
4568          Section 50. Section 63G-2-305 is amended to read:
4569          63G-2-305. Protected records.
4570          The following records are protected if properly classified by a governmental entity:
4571          (1) trade secrets as defined in Section 13-24-2 if the person submitting the trade secret
4572     has provided the governmental entity with the information specified in Section 63G-2-309;
4573          (2) commercial information or nonindividual financial information obtained from a
4574     person if:
4575          (a) disclosure of the information could reasonably be expected to result in unfair
4576     competitive injury to the person submitting the information or would impair the ability of the
4577     governmental entity to obtain necessary information in the future;
4578          (b) the person submitting the information has a greater interest in prohibiting access
4579     than the public in obtaining access; and
4580          (c) the person submitting the information has provided the governmental entity with
4581     the information specified in Section 63G-2-309;
4582          (3) commercial or financial information acquired or prepared by a governmental entity

4583     to the extent that disclosure would lead to financial speculations in currencies, securities, or
4584     commodities that will interfere with a planned transaction by the governmental entity or cause
4585     substantial financial injury to the governmental entity or state economy;
4586          (4) records, the disclosure of which could cause commercial injury to, or confer a
4587     competitive advantage upon a potential or actual competitor of, a commercial project entity as
4588     defined in Subsection 11-13-103(4);
4589          (5) test questions and answers to be used in future license, certification, registration,
4590     employment, or academic examinations;
4591          (6) records, the disclosure of which would impair governmental procurement
4592     proceedings or give an unfair advantage to any person proposing to enter into a contract or
4593     agreement with a governmental entity, except, subject to Subsections (1) and (2), that this
4594     Subsection (6) does not restrict the right of a person to have access to, after the contract or
4595     grant has been awarded and signed by all parties, a bid, proposal, application, or other
4596     information submitted to or by a governmental entity in response to:
4597          (a) an invitation for bids;
4598          (b) a request for proposals;
4599          (c) a request for quotes;
4600          (d) a grant; or
4601          (e) other similar document;
4602          (7) information submitted to or by a governmental entity in response to a request for
4603     information, except, subject to Subsections (1) and (2), that this Subsection (7) does not restrict
4604     the right of a person to have access to the information, after:
4605          (a) a contract directly relating to the subject of the request for information has been
4606     awarded and signed by all parties; or
4607          (b) (i) a final determination is made not to enter into a contract that relates to the
4608     subject of the request for information; and
4609          (ii) at least two years have passed after the day on which the request for information is
4610     issued;
4611          (8) records that would identify real property or the appraisal or estimated value of real
4612     or personal property, including intellectual property, under consideration for public acquisition
4613     before any rights to the property are acquired unless:

4614          (a) public interest in obtaining access to the information is greater than or equal to the
4615     governmental entity's need to acquire the property on the best terms possible;
4616          (b) the information has already been disclosed to persons not employed by or under a
4617     duty of confidentiality to the entity;
4618          (c) in the case of records that would identify property, potential sellers of the described
4619     property have already learned of the governmental entity's plans to acquire the property;
4620          (d) in the case of records that would identify the appraisal or estimated value of
4621     property, the potential sellers have already learned of the governmental entity's estimated value
4622     of the property; or
4623          (e) the property under consideration for public acquisition is a single family residence
4624     and the governmental entity seeking to acquire the property has initiated negotiations to acquire
4625     the property as required under Section 78B-6-505;
4626          (9) records prepared in contemplation of sale, exchange, lease, rental, or other
4627     compensated transaction of real or personal property including intellectual property, which, if
4628     disclosed prior to completion of the transaction, would reveal the appraisal or estimated value
4629     of the subject property, unless:
4630          (a) the public interest in access is greater than or equal to the interests in restricting
4631     access, including the governmental entity's interest in maximizing the financial benefit of the
4632     transaction; or
4633          (b) when prepared by or on behalf of a governmental entity, appraisals or estimates of
4634     the value of the subject property have already been disclosed to persons not employed by or
4635     under a duty of confidentiality to the entity;
4636          (10) records created or maintained for civil, criminal, or administrative enforcement
4637     purposes or audit purposes, or for discipline, licensing, certification, or registration purposes, if
4638     release of the records:
4639          (a) reasonably could be expected to interfere with investigations undertaken for
4640     enforcement, discipline, licensing, certification, or registration purposes;
4641          (b) reasonably could be expected to interfere with audits, disciplinary, or enforcement
4642     proceedings;
4643          (c) would create a danger of depriving a person of a right to a fair trial or impartial
4644     hearing;

4645          (d) reasonably could be expected to disclose the identity of a source who is not
4646     generally known outside of government and, in the case of a record compiled in the course of
4647     an investigation, disclose information furnished by a source not generally known outside of
4648     government if disclosure would compromise the source; or
4649          (e) reasonably could be expected to disclose investigative or audit techniques,
4650     procedures, policies, or orders not generally known outside of government if disclosure would
4651     interfere with enforcement or audit efforts;
4652          (11) records the disclosure of which would jeopardize the life or safety of an
4653     individual;
4654          (12) records the disclosure of which would jeopardize the security of governmental
4655     property, governmental programs, or governmental recordkeeping systems from damage, theft,
4656     or other appropriation or use contrary to law or public policy;
4657          (13) records that, if disclosed, would jeopardize the security or safety of a correctional
4658     facility, or records relating to incarceration, treatment, probation, or parole, that would interfere
4659     with the control and supervision of an offender's incarceration, treatment, probation, or parole;
4660          (14) records that, if disclosed, would reveal recommendations made to the Board of
4661     Pardons and Parole by an employee of or contractor for the Department of Corrections, the
4662     Board of Pardons and Parole, or the Department of Human Services that are based on the
4663     employee's or contractor's supervision, diagnosis, or treatment of any person within the board's
4664     jurisdiction;
4665          (15) records and audit workpapers that identify audit, collection, and operational
4666     procedures and methods used by the State Tax Commission, if disclosure would interfere with
4667     audits or collections;
4668          (16) records of a governmental audit agency relating to an ongoing or planned audit
4669     until the final audit is released;
4670          (17) records that are subject to the attorney client privilege;
4671          (18) records prepared for or by an attorney, consultant, surety, indemnitor, insurer,
4672     employee, or agent of a governmental entity for, or in anticipation of, litigation or a judicial,
4673     quasi-judicial, or administrative proceeding;
4674          (19) (a) (i) personal files of a state legislator, including personal correspondence to or
4675     from a member of the Legislature; and

4676          (ii) notwithstanding Subsection (19)(a)(i), correspondence that gives notice of
4677     legislative action or policy may not be classified as protected under this section; and
4678          (b) (i) an internal communication that is part of the deliberative process in connection
4679     with the preparation of legislation between:
4680          (A) members of a legislative body;
4681          (B) a member of a legislative body and a member of the legislative body's staff; or
4682          (C) members of a legislative body's staff; and
4683          (ii) notwithstanding Subsection (19)(b)(i), a communication that gives notice of
4684     legislative action or policy may not be classified as protected under this section;
4685          (20) (a) records in the custody or control of the Office of Legislative Research and
4686     General Counsel, that, if disclosed, would reveal a particular legislator's contemplated
4687     legislation or contemplated course of action before the legislator has elected to support the
4688     legislation or course of action, or made the legislation or course of action public; and
4689          (b) notwithstanding Subsection (20)(a), the form to request legislation submitted to the
4690     Office of Legislative Research and General Counsel is a public document unless a legislator
4691     asks that the records requesting the legislation be maintained as protected records until such
4692     time as the legislator elects to make the legislation or course of action public;
4693          (21) research requests from legislators to the Office of Legislative Research and
4694     General Counsel or the Office of the Legislative Fiscal Analyst and research findings prepared
4695     in response to these requests;
4696          (22) drafts, unless otherwise classified as public;
4697          (23) records concerning a governmental entity's strategy about:
4698          (a) collective bargaining; or
4699          (b) imminent or pending litigation;
4700          (24) records of investigations of loss occurrences and analyses of loss occurrences that
4701     may be covered by the Risk Management Fund, the Employers' Reinsurance Fund, the
4702     Uninsured Employers' Fund, or similar divisions in other governmental entities;
4703          (25) records, other than personnel evaluations, that contain a personal recommendation
4704     concerning an individual if disclosure would constitute a clearly unwarranted invasion of
4705     personal privacy, or disclosure is not in the public interest;
4706          (26) records that reveal the location of historic, prehistoric, paleontological, or

4707     biological resources that if known would jeopardize the security of those resources or of
4708     valuable historic, scientific, educational, or cultural information;
4709          (27) records of independent state agencies if the disclosure of the records would
4710     conflict with the fiduciary obligations of the agency;
4711          (28) records of an institution within the state system of higher education defined in
4712     Section 53B-1-102 regarding tenure evaluations, appointments, applications for admissions,
4713     retention decisions, and promotions, which could be properly discussed in a meeting closed in
4714     accordance with Title 52, Chapter 4, Open and Public Meetings Act, provided that records of
4715     the final decisions about tenure, appointments, retention, promotions, or those students
4716     admitted, may not be classified as protected under this section;
4717          (29) records of the governor's office, including budget recommendations, legislative
4718     proposals, and policy statements, that if disclosed would reveal the governor's contemplated
4719     policies or contemplated courses of action before the governor has implemented or rejected
4720     those policies or courses of action or made them public;
4721          (30) records of the Office of the Legislative Fiscal Analyst relating to budget analysis,
4722     revenue estimates, and fiscal notes of proposed legislation before issuance of the final
4723     recommendations in these areas;
4724          (31) records provided by the United States or by a government entity outside the state
4725     that are given to the governmental entity with a requirement that they be managed as protected
4726     records if the providing entity certifies that the record would not be subject to public disclosure
4727     if retained by it;
4728          (32) transcripts, minutes, or reports of the closed portion of a meeting of a public body
4729     except as provided in Section 52-4-206;
4730          (33) records that would reveal the contents of settlement negotiations but not including
4731     final settlements or empirical data to the extent that they are not otherwise exempt from
4732     disclosure;
4733          (34) memoranda prepared by staff and used in the decision-making process by an
4734     administrative law judge, a member of the Board of Pardons and Parole, or a member of any
4735     other body charged by law with performing a quasi-judicial function;
4736          (35) records that would reveal negotiations regarding assistance or incentives offered
4737     by or requested from a governmental entity for the purpose of encouraging a person to expand

4738     or locate a business in Utah, but only if disclosure would result in actual economic harm to the
4739     person or place the governmental entity at a competitive disadvantage, but this section may not
4740     be used to restrict access to a record evidencing a final contract;
4741          (36) materials to which access must be limited for purposes of securing or maintaining
4742     the governmental entity's proprietary protection of intellectual property rights including patents,
4743     copyrights, and trade secrets;
4744          (37) the name of a donor or a prospective donor to a governmental entity, including an
4745     institution within the state system of higher education defined in Section 53B-1-102, and other
4746     information concerning the donation that could reasonably be expected to reveal the identity of
4747     the donor, provided that:
4748          (a) the donor requests anonymity in writing;
4749          (b) any terms, conditions, restrictions, or privileges relating to the donation may not be
4750     classified protected by the governmental entity under this Subsection (37); and
4751          (c) except for an institution within the state system of higher education defined in
4752     Section 53B-1-102, the governmental unit to which the donation is made is primarily engaged
4753     in educational, charitable, or artistic endeavors, and has no regulatory or legislative authority
4754     over the donor, a member of the donor's immediate family, or any entity owned or controlled
4755     by the donor or the donor's immediate family;
4756          (38) accident reports, except as provided in Sections 41-6a-404, 41-12a-202, and
4757     73-18-13;
4758          (39) a notification of workers' compensation insurance coverage described in Section
4759     34A-2-205;
4760          (40) (a) the following records of an institution within the state system of higher
4761     education defined in Section 53B-1-102, which have been developed, discovered, disclosed to,
4762     or received by or on behalf of faculty, staff, employees, or students of the institution:
4763          (i) unpublished lecture notes;
4764          (ii) unpublished notes, data, and information:
4765          (A) relating to research; and
4766          (B) of:
4767          (I) the institution within the state system of higher education defined in Section
4768     53B-1-102; or

4769          (II) a sponsor of sponsored research;
4770          (iii) unpublished manuscripts;
4771          (iv) creative works in process;
4772          (v) scholarly correspondence; and
4773          (vi) confidential information contained in research proposals;
4774          (b) Subsection (40)(a) may not be construed to prohibit disclosure of public
4775     information required pursuant to Subsection 53B-16-302(2)(a) or (b); and
4776          (c) Subsection (40)(a) may not be construed to affect the ownership of a record;
4777          (41) (a) records in the custody or control of the Office of Legislative Auditor General
4778     that would reveal the name of a particular legislator who requests a legislative audit prior to the
4779     date that audit is completed and made public; and
4780          (b) notwithstanding Subsection (41)(a), a request for a legislative audit submitted to the
4781     Office of the Legislative Auditor General is a public document unless the legislator asks that
4782     the records in the custody or control of the Office of Legislative Auditor General that would
4783     reveal the name of a particular legislator who requests a legislative audit be maintained as
4784     protected records until the audit is completed and made public;
4785          (42) records that provide detail as to the location of an explosive, including a map or
4786     other document that indicates the location of:
4787          (a) a production facility; or
4788          (b) a magazine;
4789          (43) information:
4790          (a) contained in the statewide database of the Division of Aging and Adult Services
4791     created by Section 62A-3-311.1; or
4792          (b) received or maintained in relation to the Identity Theft Reporting Information
4793     System (IRIS) established under Section 67-5-22;
4794          (44) information contained in the Management Information System and Licensing
4795     Information System described in Title 62A, Chapter 4a, Child and Family Services;
4796          (45) information regarding National Guard operations or activities in support of the
4797     National Guard's federal mission;
4798          (46) records provided by any pawn or secondhand business to a law enforcement
4799     agency or to the central database in compliance with Title 13, Chapter 32a, Pawnshop and

4800     Secondhand Merchandise Transaction Information Act;
4801          (47) information regarding food security, risk, and vulnerability assessments performed
4802     by the Department of Agriculture and Food;
4803          (48) except to the extent that the record is exempt from this chapter pursuant to Section
4804     63G-2-106, records related to an emergency plan or program, a copy of which is provided to or
4805     prepared or maintained by the Division of Emergency Management, and the disclosure of
4806     which would jeopardize:
4807          (a) the safety of the general public; or
4808          (b) the security of:
4809          (i) governmental property;
4810          (ii) governmental programs; or
4811          (iii) the property of a private person who provides the Division of Emergency
4812     Management information;
4813          (49) records of the Department of Agriculture and Food that provides for the
4814     identification, tracing, or control of livestock diseases, including any program established under
4815     Title 4, Chapter 24, Utah Livestock Brand and Anti-Theft Act, or Title 4, Chapter 31, Control
4816     of Animal Disease;
4817          (50) as provided in Section 26-39-501:
4818          (a) information or records held by the Department of Health related to a complaint
4819     regarding a child care program or residential child care which the department is unable to
4820     substantiate; and
4821          (b) information or records related to a complaint received by the Department of Health
4822     from an anonymous complainant regarding a child care program or residential child care;
4823          (51) unless otherwise classified as public under Section 63G-2-301 and except as
4824     provided under Section 41-1a-116, an individual's home address, home telephone number, or
4825     personal mobile phone number, if:
4826          (a) the individual is required to provide the information in order to comply with a law,
4827     ordinance, rule, or order of a government entity; and
4828          (b) the subject of the record has a reasonable expectation that this information will be
4829     kept confidential due to:
4830          (i) the nature of the law, ordinance, rule, or order; and

4831          (ii) the individual complying with the law, ordinance, rule, or order;
4832          (52) the name, home address, work addresses, and telephone numbers of an individual
4833     that is engaged in, or that provides goods or services for, medical or scientific research that is:
4834          (a) conducted within the state system of higher education, as defined in Section
4835     53B-1-102; and
4836          (b) conducted using animals;
4837          (53) an initial proposal under Title 63N, Chapter 13, Part 2, Government Procurement
4838     Private Proposal Program, to the extent not made public by rules made under that chapter;
4839          (54) in accordance with Section 78A-12-203, any record of the Judicial Performance
4840     Evaluation Commission concerning an individual commissioner's vote on whether or not to
4841     recommend that the voters retain a judge including information disclosed under Subsection
4842     78A-12-203(5)(e);
4843          (55) information collected and a report prepared by the Judicial Performance
4844     Evaluation Commission concerning a judge, unless Section 20A-7-702 or Title 78A, Chapter
4845     12, Judicial Performance Evaluation Commission Act, requires disclosure of, or makes public,
4846     the information or report;
4847          (56) records contained in the Management Information System created in Section
4848     62A-4a-1003;
4849          (57) records provided or received by the Public Lands Policy Coordinating Office in
4850     furtherance of any contract or other agreement made in accordance with Section 63J-4-603;
4851          (58) information requested by and provided to the 911 Division under Section
4852     63H-7a-302;
4853          (59) in accordance with Section 73-10-33:
4854          (a) a management plan for a water conveyance facility in the possession of the Division
4855     of Water Resources or the Board of Water Resources; or
4856          (b) an outline of an emergency response plan in possession of the state or a county or
4857     municipality;
4858          (60) the following records in the custody or control of the Office of Inspector General
4859     of Medicaid Services, created in Section 63A-13-201:
4860          (a) records that would disclose information relating to allegations of personal
4861     misconduct, gross mismanagement, or illegal activity of a person if the information or

4862     allegation cannot be corroborated by the Office of Inspector General of Medicaid Services
4863     through other documents or evidence, and the records relating to the allegation are not relied
4864     upon by the Office of Inspector General of Medicaid Services in preparing a final investigation
4865     report or final audit report;
4866          (b) records and audit workpapers to the extent they would disclose the identity of a
4867     person who, during the course of an investigation or audit, communicated the existence of any
4868     Medicaid fraud, waste, or abuse, or a violation or suspected violation of a law, rule, or
4869     regulation adopted under the laws of this state, a political subdivision of the state, or any
4870     recognized entity of the United States, if the information was disclosed on the condition that
4871     the identity of the person be protected;
4872          (c) before the time that an investigation or audit is completed and the final
4873     investigation or final audit report is released, records or drafts circulated to a person who is not
4874     an employee or head of a governmental entity for the person's response or information;
4875          (d) records that would disclose an outline or part of any investigation, audit survey
4876     plan, or audit program; or
4877          (e) requests for an investigation or audit, if disclosure would risk circumvention of an
4878     investigation or audit;
4879          (61) records that reveal methods used by the Office of Inspector General of Medicaid
4880     Services, the fraud unit, or the Department of Health, to discover Medicaid fraud, waste, or
4881     abuse;
4882          (62) information provided to the Department of Health or the Division of Occupational
4883     and Professional Licensing under Subsection 58-68-304(3) or (4);
4884          (63) a record described in Section 63G-12-210;
4885          (64) captured plate data that is obtained through an automatic license plate reader
4886     system used by a governmental entity as authorized in Section 41-6a-2003;
4887          (65) any record in the custody of the Utah Office for Victims of Crime relating to a
4888     victim, including:
4889          (a) a victim's application or request for benefits;
4890          (b) a victim's receipt or denial of benefits; and
4891          (c) any administrative notes or records made or created for the purpose of, or used to,
4892     evaluate or communicate a victim's eligibility for or denial of benefits from the Crime Victim

4893     Reparations Fund;
4894          (66) an audio or video recording created by a body-worn camera, as that term is
4895     defined in Section 77-7a-103, that records sound or images inside a hospital or health care
4896     facility as those terms are defined in Section 78B-3-403, inside a clinic of a health care
4897     provider, as that term is defined in Section 78B-3-403, or inside a human service program as
4898     that term is defined in Subsection 62A-2-101(19)(a)(vi), except for recordings that:
4899          (a) depict the commission of an alleged crime;
4900          (b) record any encounter between a law enforcement officer and a person that results in
4901     death or bodily injury, or includes an instance when an officer fires a weapon;
4902          (c) record any encounter that is the subject of a complaint or a legal proceeding against
4903     a law enforcement officer or law enforcement agency;
4904          (d) contain an officer involved critical incident as defined in Subsection
4905     76-2-408(1)(d); or
4906          (e) have been requested for reclassification as a public record by a subject or
4907     authorized agent of a subject featured in the recording; [and]
4908          (67) a record pertaining to the search process for a president of an institution of higher
4909     education described in Section 53B-2-102, except for application materials for a publicly
4910     announced finalist[.]; and
4911          (68) work papers as defined in Section 31A-2-204.
4912          Section 51. Section 72-6-107.5 is amended to read:
4913          72-6-107.5. Construction of improvements of highway -- Contracts -- Health
4914     insurance coverage.
4915          (1) [For purposes of] As used in this section:
4916          (a) "Aggregate" means the sum of all contracts, change orders, and modifications
4917     related to a single project.
4918          (b) "Change order" means the same as that term is defined in Section 63G-6a-103.
4919          [(a)] (c) "Employee" means, as defined in Section 34A-2-104, an "employee,"
4920     "worker," or "operative" [as defined in Section 34A-2-104] who:
4921          (i) works at least 30 hours per calendar week; and
4922          (ii) meets employer eligibility waiting requirements for health care insurance, which
4923     may not exceed the first day of the calendar month following 60 days [from the date of hire]

4924     after the day on which the individual is hired.
4925          [(b)] (d) "Health benefit plan" means the same as that term is defined in Section
4926     31A-1-301.
4927          [(c)] (e) "Qualified health insurance coverage" means the same as that term is defined
4928     in Section 26-40-115.
4929          [(d)] (f) "Subcontractor" means the same as that term is defined in Section 63A-5-208.
4930          [(2) (a) Except as provided in Subsection (3), this section applies to contracts entered
4931     into by the department on or after July 1, 2009, for construction or design of highways and to a
4932     prime contractor or to a subcontractor in accordance with Subsection (2)(b).]
4933          [(b) (i) A prime contractor is subject to this section if the prime contract is in the
4934     amount of $2,000,000 or greater at the original execution of the contract.]
4935          [(ii) A subcontractor is subject to this section if a subcontract is in the amount of
4936     $1,000,000 or greater at the original execution of the contract.]
4937          [(3) This section does not apply if:]
4938          (2) (a) Except as provided in Subsection (3), the requirements of this section apply to:
4939          (a) a contractor of a design or construction contract entered into by the department on
4940     or after July 1, 2009, if the prime contract is in an aggregate amount equal to or greater than
4941     $2,000,000; and
4942          (b) a subcontractor of a contractor of a design or construction contract entered into by
4943     the department on or after July 1, 2009, if the subcontract is in an aggregate amount equal to or
4944     greater than $1,000,000.
4945          (3) The requirements of this section do not apply to a contractor or subcontractor
4946     described in Subsection (2) if:
4947          (a) the application of this section jeopardizes the receipt of federal funds;
4948          (b) the contract is a sole source contract; or
4949          (c) the contract is an emergency procurement.
4950          [(4) (a) This section does not apply to a change order as defined in Section
4951     63G-6a-103, or a modification to a contract, when the contract does not meet the initial
4952     threshold required by Subsection (2).]
4953          [(b)] (4) A person [who] that intentionally uses change orders [or], contract
4954     modifications, or multiple contracts to circumvent the requirements of [Subsection (2)] this

4955     section is guilty of an infraction.
4956          (5) (a) A contractor subject to [Subsection (2)] the requirements of this section shall
4957     demonstrate to the department that the contractor has and will maintain an offer of qualified
4958     health insurance coverage for the contractor's employees and the employees' dependents during
4959     the duration of the contract[.] by submitting to the department a written statement that:
4960          [(b) If a subcontractor of the contractor is subject to Subsection (2), the contractor
4961     shall:]
4962          (i) Ŝ→ [
certifies that] ←Ŝ the contractor offers qualified health insurance coverage Ŝ→ [in
4962a     accordance
] that complies ←Ŝ
4963     with Section 26-40-115;
4964          (ii) is from:
4965          (A) an actuary selected by the contractor or the contractor's insurer; or
4966          (B) an underwriter who is responsible for developing the employer group's premium
4967     rates; and
4968          (iii) was created within one year before the day on which the statement is submitted.
4969          (b) A contractor that is subject to the requirements of this section shall:
4970          (i) place a requirement in [the subcontract that the subcontractor] each of the
4971     contractor's subcontracts that a subcontractor that is subject to the requirements of this section
4972     shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
4973     employees and the employees' dependents during the duration of the subcontract; and
4974          [(ii) certify to the department that the subcontractor has and will maintain an offer of
4975     qualified health insurance coverage for the subcontractor's employees and the employees'
4976     dependents during the duration of the prime contract.]
4977          (ii) obtain from a subcontractor that is subject to the requirements of this section a
4978     written statement that:
4979          (A) Ŝ→ [
certifies that] ←Ŝ the subcontractor offers qualified health insurance coverage
4979a     Ŝ→ [
in
4980     accordance
] that complies ←Ŝ
with Section 26-40-115;
4981          (B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
4982     underwriter who is responsible for developing the employer group's premium rates; and
4983          (C) was created within one year before the day on which the contractor obtains the
4984     statement.
4985          (c) (i) (A) A contractor [who fails to meet the requirements of] that fails to maintain an

4986     offer of qualified health insurance coverage described in Subsection (5)(a) during the duration
4987     of the contract is subject to penalties in accordance with administrative rules adopted by the
4988     department under Subsection (6).
4989          (B) A contractor is not subject to penalties for the failure of a subcontractor to [meet
4990     the requirements of] obtain and maintain an offer of qualified health insurance coverage
4991     described in Subsection (5)(b)(i).
4992          (ii) (A) A subcontractor [who fails to meet the requirements of] that fails to obtain and
4993     maintain an offer of qualified health insurance coverage described in Subsection (5)(b) during
4994     the duration of the [contract] subcontract is subject to penalties in accordance with
4995     administrative rules adopted by the department under Subsection (6).
4996          (B) A subcontractor is not subject to penalties for the failure of a contractor to [meet
4997     the requirements of] maintain an offer of qualified health insurance coverage described in
4998     Subsection (5)(a).
4999          (6) The department shall adopt administrative rules:
5000          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
5001          (b) in coordination with:
5002          (i) the Department of Environmental Quality in accordance with Section 19-1-206;
5003          (ii) the Department of Natural Resources in accordance with Section 79-2-404;
5004          (iii) the State Building Board in accordance with Section [63A-5-205] 63A-5-205.5;
5005          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403;
5006          (v) a public transit district in accordance with Section 17B-2a-818.5; and
5007          (vi) the Legislature's Administrative Rules Review Committee; and
5008          (c) that establish:
5009          (i) the requirements and procedures a contractor [must] and a subcontractor shall
5010     follow to demonstrate [to the department] compliance with this section [that shall include],
5011     including:
5012          [(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
5013     time of the execution of each initial contract described in Subsection (2)(b);]
5014          [(B) that the contractor's]
5015          (A) that a contractor or subcontractor's compliance with this section is subject to an
5016     audit by the department or the Office of the Legislative Auditor General; [and]

5017          [(C) that the actuarially equivalent determination required for qualified health
5018     insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
5019     department or division with a written statement of actuarial equivalency, which is no more than
5020     one year old, regarding the contractor's offer of qualified health coverage from an actuary
5021     selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
5022     developing the employer group's premium rates;]
5023          (B) that a contractor that is subject to the requirements of this section shall obtain a
5024     written statement described in Subsection (5)(a); and
5025          (C) that a subcontractor that is subject to the requirements of this section shall obtain a
5026     written statement described in Subsection (5)(b)(ii);
5027          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
5028     violates the provisions of this section, which may include:
5029          (A) a three-month suspension of the contractor or subcontractor from entering into
5030     future contracts with the state upon the first violation;
5031          (B) a six-month suspension of the contractor or subcontractor from entering into future
5032     contracts with the state upon the second violation;
5033          (C) an action for debarment of the contractor or subcontractor in accordance with
5034     Section 63G-6a-904 upon the third or subsequent violation; and
5035          (D) monetary penalties which may not exceed 50% of the amount necessary to
5036     purchase qualified health insurance coverage for an employee and a dependent of the employee
5037     of the contractor or subcontractor who was not offered qualified health insurance coverage
5038     during the duration of the contract; and
5039          (iii) a website on which the department shall post the commercially equivalent
5040     benchmark, for the qualified health insurance coverage identified in Subsection (1)[(c)](e), that
5041     is provided by the Department of Health, in accordance with Subsection 26-40-115(2).
5042          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c)(ii), a contractor
5043     or subcontractor who intentionally violates the provisions of this section [shall be] is liable to
5044     the employee for health care costs that would have been covered by qualified health insurance
5045     coverage.
5046          (ii) An employer has an affirmative defense to a cause of action under Subsection
5047     (7)(a)(i) if:

5048          (A) the employer relied in good faith on a written statement [of actuarial equivalency
5049     provided by:] described in Subsection (5)(a) or (5)(b)(ii); or
5050          [(I) an actuary; or]
5051          [(II) an underwriter who is responsible for developing the employer group's premium
5052     rates; or]
5053          (B) the department determines that compliance with this section is not required under
5054     the provisions of Subsection (3) [or (4)].
5055          (b) An employee has a private right of action only against the employee's employer to
5056     enforce the provisions of this Subsection (7).
5057          (8) Any penalties imposed and collected under this section shall be deposited into the
5058     Medicaid Restricted Account created in Section 26-18-402.
5059          (9) The failure of a contractor or subcontractor to provide qualified health insurance
5060     coverage as required by this section:
5061          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
5062     or contractor under:
5063          (i) Section 63G-6a-1602; or
5064          (ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
5065          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
5066     contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
5067     or construction.
5068          Section 52. Section 79-2-404 is amended to read:
5069          79-2-404. Contracting powers of department -- Health insurance coverage.
5070          (1) [For purposes of] As used in this section:
5071          (a) "Aggregate" means the sum of all contracts, change orders, and modifications
5072     related to a single project.
5073          (b) "Change order" means the same as that term is defined in Section 63G-6a-103.
5074          [(a)] (c) "Employee" means, as defined in Section 34A-2-104, an "employee,"
5075     "worker," or "operative" [as defined in Section 34A-2-104] who:
5076          (i) works at least 30 hours per calendar week; and
5077          (ii) meets employer eligibility waiting requirements for health care insurance, which
5078     may not exceed the first day of the calendar month following 60 days [from the date of hire]

5079     after the day on which the individual is hired.
5080          [(b)] (d) "Health benefit plan" means the same as that term is defined in Section
5081     31A-1-301.
5082          [(c)] (e) "Qualified health insurance coverage" means the same as that term is defined
5083     in Section 26-40-115.
5084          [(d)] (f) "Subcontractor" means the same as that term is defined in Section 63A-5-208.
5085          [(2) (a) Except as provided in Subsection (3), this section applies a design or
5086     construction contract entered into by, or delegated to, the department or a division, board, or
5087     council of the department on or after July 1, 2009, and to a prime contractor or to a
5088     subcontractor in accordance with Subsection (2)(b).]
5089          [(b) (i) A prime contractor is subject to this section if the prime contract is in the
5090     amount of $2,000,000 or greater at the original execution of the contract.]
5091          [(ii) A subcontractor is subject to this section if a subcontract is in the amount of
5092     $1,000,000 or greater at the original execution of the contract.]
5093          (2) Except as provided in Subsection (3), the requirements of this section apply to:
5094          (a) a contractor of a design or construction contract entered into by, or delegated to, the
5095     department or a division, board, or council of the department on or after July 1, 2009, if the
5096     prime contract is in an aggregate amount equal to or greater than $2,000,000; and
5097          (b) a subcontractor of a contractor of a design or construction contract entered into by,
5098     or delegated to, the department or a division, board, or council of the department on or after
5099     July 1, 2009, if the subcontract is in an aggregate amount equal to or greater than $1,000,000.
5100          (3) This section does not apply to contracts entered into by the department or a
5101     division, board, or council of the department if:
5102          (a) the application of this section jeopardizes the receipt of federal funds;
5103          (b) the contract or agreement is between:
5104          (i) the department or a division, board, or council of the department; and
5105          (ii) (A) another agency of the state;
5106          (B) the federal government;
5107          (C) another state;
5108          (D) an interstate agency;
5109          (E) a political subdivision of this state; or

5110          (F) a political subdivision of another state; or
5111          (c) the contract or agreement is:
5112          (i) for the purpose of disbursing grants or loans authorized by statute;
5113          (ii) a sole source contract; or
5114          (iii) an emergency procurement.
5115          [(4) (a) This section does not apply to a change order as defined in Section
5116     63G-6a-103, or a modification to a contract, when the contract does not meet the initial
5117     threshold required by Subsection (2).]
5118          [(b)] (4) A person [who] that intentionally uses change orders [or], contract
5119     modifications, or multiple contracts to circumvent the requirements of [Subsection (2)] this
5120     section is guilty of an infraction.
5121          (5) (a) A contractor subject to [Subsection (2)(b)(i)] the requirements of this section
5122     shall demonstrate to the department that the contractor has and will maintain an offer of
5123     qualified health insurance coverage for the contractor's employees and the employees'
5124     dependents during the duration of the contract[.] by submitting to the department a written
5125     statement that:
5126          [(b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
5127     shall:]
5128          (i) Ŝ→ [
certifies that] ←Ŝ the contractor offers qualified health insurance coverage Ŝ→ [in
5128a     accordance
] that complies ←Ŝ
5129     with Section 26-40-115;
5130          (ii) is from:
5131          (A) an actuary selected by the contractor or the contractor's insurer; or
5132          (B) an underwriter who is responsible for developing the employer group's premium
5133     rates; and
5134          (iii) was created within one year before the day on which the statement is submitted.
5135          (b) A contractor that is subject to the requirements of this section shall:
5136          (i) place a requirement in [the subcontract that the subcontractor] each of the
5137     contractor's subcontracts that a subcontractor that is subject to the requirements of this section
5138     shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
5139     employees and the employees' [dependants] dependents during the duration of the subcontract;
5140     and

5141          [(ii) certify to the department that the subcontractor has and will maintain an offer of
5142     qualified health insurance coverage for the subcontractor's employees and the employees'
5143     dependents during the duration of the prime contract.]
5144          (ii) obtain from a subcontractor that is subject to the requirements of this section a
5145     written statement that:
5146          (A) Ŝ→ [
certifies that] ←Ŝ the subcontractor offers qualified health insurance coverage
5146a     Ŝ→ [
in
5147     accordance
] that complies ←Ŝ
with Section 26-40-115;
5148          (B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
5149     underwriter who is responsible for developing the employer group's premium rates; and
5150          (C) was created within one year before the day on which the contractor obtains the
5151     statement.
5152          (c) (i) (A) A contractor [who fails to meet the requirements of] that fails to maintain an
5153     offer of qualified health insurance coverage described in Subsection (5)(a) during the duration
5154     of the contract is subject to penalties in accordance with administrative rules adopted by the
5155     department under Subsection (6).
5156          (B) A contractor is not subject to penalties for the failure of a subcontractor to [meet
5157     the requirements of] obtain and maintain an offer of qualified health insurance coverage
5158     described in Subsection (5)(b)(i).
5159          (ii) (A) A subcontractor [who fails to meet the requirements of] that fails to obtain and
5160     maintain an offer of qualified health insurance coverage described in Subsection (5)(b) during
5161     the duration of the [contract] subcontract is subject to penalties in accordance with
5162     administrative rules adopted by the department under Subsection (6).
5163          (B) A subcontractor is not subject to penalties for the failure of a contractor to [meet
5164     the requirements of] maintain an offer of qualified health insurance coverage described in
5165     Subsection (5)(a).
5166          (6) The department shall adopt administrative rules:
5167          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
5168          (b) in coordination with:
5169          (i) the Department of Environmental Quality in accordance with Section 19-1-206;
5170          (ii) a public transit district in accordance with Section 17B-2a-818.5;
5171          (iii) the State Building Board in accordance with Section [63A-5-205] 63A-5-205.5;

5172          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403;
5173          (v) the Department of Transportation in accordance with Section 72-6-107.5; and
5174          (vi) the Legislature's Administrative Rules Review Committee; and
5175          (c) that establish:
5176          (i) the requirements and procedures a contractor [must] and a subcontractor shall
5177     follow to demonstrate compliance with this section [to the department that shall include],
5178     including:
5179          [(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
5180     time of the execution of each initial contract described in Subsection (2)(b);]
5181          [(B) that the contractor's]
5182          (A) that a contractor or subcontractor's compliance with this section is subject to an
5183     audit by the department or the Office of the Legislative Auditor General; [and]
5184          [(C) that the actuarially equivalent determination required for qualified health
5185     insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
5186     department or division with a written statement of actuarial equivalency, which is no more than
5187     one year old, regarding the contractor's offer of qualified health coverage from an actuary
5188     selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
5189     developing the employer group's premium rates;]
5190          (B) that a contractor that is subject to the requirements of this section shall obtain a
5191     written statement described in Subsection (5)(a); and
5192          (C) that a subcontractor that is subject to the requirements of this section shall obtain a
5193     written statement described in Subsection (5)(b)(ii);
5194          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
5195     violates the provisions of this section, which may include:
5196          (A) a three-month suspension of the contractor or subcontractor from entering into
5197     future contracts with the state upon the first violation;
5198          (B) a six-month suspension of the contractor or subcontractor from entering into future
5199     contracts with the state upon the second violation;
5200          (C) an action for debarment of the contractor or subcontractor in accordance with
5201     Section 63G-6a-904 upon the third or subsequent violation; and
5202          (D) monetary penalties which may not exceed 50% of the amount necessary to

5203     purchase qualified health insurance coverage for an employee and a dependent of an employee
5204     of the contractor or subcontractor who was not offered qualified health insurance coverage
5205     during the duration of the contract; and
5206          (iii) a website on which the department shall post the commercially equivalent
5207     benchmark, for the qualified health insurance coverage identified in Subsection (1)[(c)](e),
5208     provided by the Department of Health, in accordance with Subsection 26-40-115(2).
5209          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c)(ii), a contractor
5210     or subcontractor who intentionally violates the provisions of this section [shall be] is liable to
5211     the employee for health care costs that would have been covered by qualified health insurance
5212     coverage.
5213          (ii) An employer has an affirmative defense to a cause of action under Subsection
5214     (7)(a)(i) if:
5215          (A) the employer relied in good faith on a written statement [of actuarial equivalency
5216     provided by:] described in Subsection (5)(a) or (5)(b)(ii); or
5217          [(I) an actuary; or]
5218          [(II) an underwriter who is responsible for developing the employer group's premium
5219     rates; or]
5220          (B) the department determines that compliance with this section is not required under
5221     the provisions of Subsection (3) [or (4)].
5222          (b) An employee has a private right of action only against the employee's employer to
5223     enforce the provisions of this Subsection (7).
5224          (8) Any penalties imposed and collected under this section shall be deposited into the
5225     Medicaid Restricted Account created in Section 26-18-402.
5226          (9) The failure of a contractor or subcontractor to provide qualified health insurance
5227     coverage as required by this section:
5228          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
5229     or contractor under:
5230          (i) Section 63G-6a-1602; or
5231          (ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
5232          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
5233     contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design

5234     or construction.
5235          Section 53. Repealer.
5236          This bill repeals:
5237          Section 31A-22-722.5, Mini-COBRA election -- American Recovery and
5238     Reinvestment Act.
5239          Section 31A-30-209, Insurance producers and the Health Insurance Exchange.