1     
UNDERINSURED MOTORIST COVERAGE AMENDMENTS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Curtis S. Bramble

5     
House Sponsor: Michael K. McKell

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to underinsured motorist coverage.
10     Highlighted Provisions:
11          This bill:
12          ▸     modifies the definition of "underinsured motor vehicle";
13          ▸     addresses the priority between underinsured motorist coverage and workers'
14     compensation benefits;
15          ▸     repeals provisions related to an underinsured motorist insurer's right to subrogation;
16          ▸     provides that an insurer does not have a right of reimbursement against another
17     insurer if an insurer of a person liable for the damages resulting from the
18     injury-causing occurrence has tendered the policy limit;
19          ▸     addresses the effect on the applicable statute of limitations when a claimant submits
20     an underinsured motorist claim to binding arbitration; and
21          ▸     makes technical and conforming changes.
22     Money Appropriated in this Bill:
23          None
24     Other Special Clauses:
25          None
26     Utah Code Sections Affected:
27     AMENDS:

28          31A-22-305.3, as last amended by Laws of Utah 2016, Chapter 361
29     

30     Be it enacted by the Legislature of the state of Utah:
31          Section 1. Section 31A-22-305.3 is amended to read:
32          31A-22-305.3. Underinsured motorist coverage.
33          (1) As used in this section:
34          (a) "Covered person" has the same meaning as defined in Section 31A-22-305.
35          (b) (i) "Underinsured motor vehicle" includes a motor vehicle, the operation,
36     maintenance, or use of which is covered under a liability policy at the time of an injury-causing
37     occurrence, but which has insufficient liability coverage to compensate fully the injured party
38     for all special and general damages.
39          (ii) The term "underinsured motor vehicle" does not include:
40          (A) a motor vehicle that is covered under the liability coverage of the same policy that
41     also contains the underinsured motorist coverage;
42          (B) an uninsured motor vehicle as defined in Subsection 31A-22-305(2); [or]
43          (C) a motor vehicle owned or leased by:
44          (I) a named insured;
45          (II) a named insured's spouse; or
46          (III) a dependent of a named insured[.]; or
47          (D) a motor vehicle described in Subsection (1)(b)(i) if the owner or operator of more
48     than one motor vehicle is obligated to contribute to the damages.
49          (2) (a) Underinsured motorist coverage under Subsection 31A-22-302(1)(c) provides
50     coverage for a covered person who is legally entitled to recover damages from an owner or
51     operator of an underinsured motor vehicle because of bodily injury, sickness, disease, or death.
52          (b) A covered person occupying or using a motor vehicle owned, leased, or furnished
53     to the covered person, the covered person's spouse, or covered person's resident relative may
54     recover underinsured benefits only if the motor vehicle is:
55          (i) described in the policy under which a claim is made; or
56          (ii) a newly acquired or replacement motor vehicle covered under the terms of the
57     policy.
58          (3) (a) For purposes of this Subsection (3), "new policy" means:

59          (i) any policy that is issued that does not include a renewal or reinstatement of an
60     existing policy; or
61          (ii) a change to an existing policy that results in:
62          (A) a named insured being added to or deleted from the policy; or
63          (B) a change in the limits of the named insured's motor vehicle liability coverage.
64          (b) For new policies written on or after January 1, 2001, the limits of underinsured
65     motorist coverage shall be equal to the lesser of the limits of the named insured's motor vehicle
66     liability coverage or the maximum underinsured motorist coverage limits available by the
67     insurer under the named insured's motor vehicle policy, unless a named insured rejects or
68     purchases coverage in a lesser amount by signing an acknowledgment form that:
69          (i) is filed with the department;
70          (ii) is provided by the insurer;
71          (iii) waives the higher coverage;
72          (iv) need only state in this or similar language that "underinsured motorist coverage
73     provides benefits or protection to you and other covered persons for bodily injury resulting
74     from an accident caused by the fault of another party where the other party has insufficient
75     liability insurance"; and
76          (v) discloses the additional premiums required to purchase underinsured motorist
77     coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
78     liability coverage or the maximum underinsured motorist coverage limits available by the
79     insurer under the named insured's motor vehicle policy.
80          (c) Any selection or rejection under Subsection (3)(b) continues for that issuer of the
81     liability coverage until the insured requests, in writing, a change of underinsured motorist
82     coverage from that liability insurer.
83          (d) (i) Subsections (3)(b) and (c) apply retroactively to any claim arising on or after
84     January 1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for
85     arbitration or filed a complaint in a court of competent jurisdiction.
86          (ii) The Legislature finds that the retroactive application of Subsections (3)(b) and (c)
87     clarifies legislative intent and does not enlarge, eliminate, or destroy vested rights.
88          (e) (i) As used in this Subsection (3)(e), "additional motor vehicle" means a change
89     that increases the total number of vehicles insured by the policy, and does not include

90     replacement, substitute, or temporary vehicles.
91          (ii) The adding of an additional motor vehicle to an existing personal lines or
92     commercial lines policy does not constitute a new policy for purposes of Subsection (3)(a).
93          (iii) If an additional motor vehicle is added to a personal lines policy where
94     underinsured motorist coverage has been rejected, or where underinsured motorist limits are
95     lower than the named insured's motor vehicle liability limits, the insurer shall provide a notice
96     to a named insured within 30 days that:
97          (A) in the same manner described in Subsection (3)(b)(iv), explains the purpose of
98     underinsured motorist coverage; and
99          (B) encourages the named insured to contact the insurance company or insurance
100     producer for quotes as to the additional premiums required to purchase underinsured motorist
101     coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
102     liability coverage or the maximum underinsured motorist coverage limits available by the
103     insurer under the named insured's motor vehicle policy.
104          (f) A change in policy number resulting from any policy change not identified under
105     Subsection (3)(a)(ii) does not constitute a new policy.
106          (g) (i) Subsection (3)(a) applies retroactively to any claim arising on or after January 1,
107     2001 for which, as of May 1, 2012, an insured has not made a written demand for arbitration or
108     filed a complaint in a court of competent jurisdiction.
109          (ii) The Legislature finds that the retroactive application of Subsection (3)(a):
110          (A) does not enlarge, eliminate, or destroy vested rights; and
111          (B) clarifies legislative intent.
112          (h) A self-insured, including a governmental entity, may elect to provide underinsured
113     motorist coverage in an amount that is less than its maximum self-insured retention under
114     Subsections (3)(b) and (l) by issuing a declaratory memorandum or policy statement from the
115     chief financial officer or chief risk officer that declares the:
116          (i) self-insured entity's coverage level; and
117          (ii) process for filing an underinsured motorist claim.
118          (i) Underinsured motorist coverage may not be sold with limits that are less than:
119          (i) $10,000 for one person in any one accident; and
120          (ii) at least $20,000 for two or more persons in any one accident.

121          (j) An acknowledgment under Subsection (3)(b) continues for that issuer of the
122     underinsured motorist coverage until the named insured, in writing, requests different
123     underinsured motorist coverage from the insurer.
124          (k) (i) The named insured's underinsured motorist coverage, as described in Subsection
125     (2), is secondary to the liability coverage of an owner or operator of an underinsured motor
126     vehicle, as described in Subsection (1).
127          (ii) Underinsured motorist coverage may not be set off against the liability coverage of
128     the owner or operator of an underinsured motor vehicle, but shall be added to, combined with,
129     or stacked upon the liability coverage of the owner or operator of the underinsured motor
130     vehicle to determine the limit of coverage available to the injured person.
131          (l) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
132     policies existing on that date, the insurer shall disclose in the same medium as the premium
133     renewal notice, an explanation of:
134          (A) the purpose of underinsured motorist coverage in the same manner as described in
135     Subsection (3)(b)(iv); and
136          (B) a disclosure of the additional premiums required to purchase underinsured motorist
137     coverage with limits equal to the lesser of the limits of the named insured's motor vehicle
138     liability coverage or the maximum underinsured motorist coverage limits available by the
139     insurer under the named insured's motor vehicle policy.
140          (ii) The disclosure required under this Subsection (3)(l) shall be sent to all named
141     insureds that carry underinsured motorist coverage limits in an amount less than the named
142     insured's motor vehicle liability policy limits or the maximum underinsured motorist coverage
143     limits available by the insurer under the named insured's motor vehicle policy.
144          (m) For purposes of this Subsection (3), a notice or disclosure sent to a named insured
145     in a household constitutes notice or disclosure to all insureds within the household.
146          (4) (a) (i) Except as provided in this Subsection (4), a covered person injured in a
147     motor vehicle described in a policy that includes underinsured motorist benefits may not elect
148     to collect underinsured motorist coverage benefits from another motor vehicle insurance policy.
149          (ii) The limit of liability for underinsured motorist coverage for two or more motor
150     vehicles may not be added together, combined, or stacked to determine the limit of insurance
151     coverage available to an injured person for any one accident.

152          (iii) Subsection (4)(a)(ii) applies to all persons except a covered person described
153     under Subsections (4)(b)(i) and (ii).
154          (b) (i) Except as provided in Subsection (4)(b)(ii), a covered person injured while
155     occupying, using, or maintaining a motor vehicle that is not owned, leased, or furnished to the
156     covered person, the covered person's spouse, or the covered person's resident parent or resident
157     sibling, may also recover benefits under any one other policy under which the covered person is
158     also a covered person.
159          (ii) (A) A covered person may recover benefits from no more than two additional
160     policies, one additional policy from each parent's household if the covered person is:
161          (I) a dependent minor of parents who reside in separate households; and
162          (II) injured while occupying or using a motor vehicle that is not owned, leased, or
163     furnished to the covered person, the covered person's resident parent, or the covered person's
164     resident sibling.
165          (B) Each parent's policy under this Subsection (4)(b)(ii) is liable only for the
166     percentage of the damages that the limit of liability of each parent's policy of underinsured
167     motorist coverage bears to the total of both parents' underinsured coverage applicable to the
168     accident.
169          (iii) A covered person's recovery under any available policies may not exceed the full
170     amount of damages.
171          (iv) Underinsured coverage on a motor vehicle occupied at the time of an accident is
172     primary coverage, and the coverage elected by a person described under Subsections
173     31A-22-305(1)(a), (b), and (c) is secondary coverage.
174          (v) The primary and the secondary coverage may not be set off against the other.
175          (vi) A covered person as described under Subsection (4)(b)(i) is entitled to the highest
176     limits of underinsured motorist coverage under only one additional policy per household
177     applicable to that covered person as a named insured, spouse, or relative.
178          (vii) A covered injured person is not barred against making subsequent elections if
179     recovery is unavailable under previous elections.
180          (viii) (A) As used in this section, "interpolicy stacking" means recovering benefits for a
181     single incident of loss under more than one insurance policy.
182          (B) Except to the extent permitted by this Subsection (4), interpolicy stacking is

183     prohibited for underinsured motorist coverage.
184          (c) Underinsured motorist coverage:
185          [(i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers'
186     Compensation Act;]
187          [(ii)] (i) may not be subrogated by a workers' compensation insurance carrier;
188          [(iii)] (ii) may not be reduced by benefits provided by workers' compensation
189     insurance;
190          [(iv)] (iii) may be reduced by health insurance subrogation only after the covered
191     person is made whole;
192          [(v)] (iv) may not be collected for bodily injury or death sustained by a person:
193          (A) while committing a violation of Section 41-1a-1314;
194          (B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated
195     in violation of Section 41-1a-1314; or
196          (C) while committing a felony; and
197          [(vi)] (v) notwithstanding Subsection (4)(c)[(v)](iv), may be recovered:
198          (A) for a person under 18 years of age who is injured within the scope of Subsection
199     (4)(c)(v), but is limited to medical and funeral expenses; or
200          (B) by a law enforcement officer as defined in Section 53-13-103, who is injured
201     within the course and scope of the law enforcement officer's duties.
202          (5) The inception of the loss under Subsection 31A-21-313(1) for underinsured
203     motorist claims occurs upon the date of the last liability policy payment.
204          [(6) (a) Except as provided in Subsection (6)(d), within five business days after
205     notification that all liability insurers have tendered the liability insurers' policy limits, the
206     underinsured carrier shall either:]
207          [(i) waive any subrogation claim the underinsured carrier may have against the person
208     liable for the injuries caused in the accident; or]
209          [(ii) pay the insured an amount equal to the policy limits tendered by the liability
210     carrier.]
211          [(b) If neither option is exercised under Subsection (6)(a), the subrogation claim is
212     considered to be waived by the underinsured carrier.]
213          [(c) The notification under Subsection (6)(a) shall include:]

214          [(i) the name, address, and phone number for all liability insurers;]
215          [(ii) the liability insurers' liability policy limits; and]
216          [(iii) the claim number associated with each liability insurer.]
217          [(d) (i) A claimant may demand payment of policy limits from all liability insurers by
218     sending notice to all applicable underinsured motorist insurers demanding payment.]
219          [(ii) The notice under Subsection (6)(d)(i) shall include the name, address, and claim
220     number of all liability insurers from which the claimant has demanded policy limits.]
221          [(iii) The claimant shall send a copy of the notice to all liability insurers from which
222     the claimant has demanded policy limits.]
223          [(e) Upon the liability insurer tendering limits to a claimant, the liability insurer shall
224     provide notice of the tender to all underinsured motorist insurers for which the liability insurer
225     received notice under Subsection (6)(d).]
226          [(f) If a claimant accepts the policy limits tender of each liability insurer, the liability
227     insurer shall pay the claimant the accepted policy limits.]
228          [(g) (i) The subrogation rights of an underinsured motorist insurer are waived, unless:]
229          [(A) within five days of delivery of the notice of tender from the liability insurer, the
230     underinsured motorist insurer affirmatively asserts the underinsured motorist insurer's rights to
231     subrogation by delivering notice to the liability insurer of the underinsured motorist insurer's
232     rights to subrogate; and]
233          [(B) the underinsured motorist insurer reimburses the liability insurer for the policy
234     limits paid to the claimant.]
235          [(ii) If the subrogation rights of an underinsured motorist insurer are not waived under
236     Subsection (6)(g)(i), any liability release signed by the claimant or the claimant's representative
237     is rescinded.]
238          [(iii) A claimant's underinsured motorist coverage is preserved if the claimant provides
239     notice to the underinsured motorist insurer as described in Subsection (6)(d) .]
240          [(h) A person providing a notice required in this Subsection (6) shall deliver the notice
241     by a service that provides proof of delivery.]
242          (6) An insurer does not have a right of reimbursement against another insurer if an
243     insurer of a person liable for the damages resulting from an injury-causing occurrence has
244     tendered the policy limit.

245          (7) Except as otherwise provided in this section, a covered person may seek, subject to
246     the terms and conditions of the policy, additional coverage under any policy:
247          (a) that provides coverage for damages resulting from motor vehicle accidents; and
248          (b) that is not required to conform to Section 31A-22-302.
249          (8) (a) When a claim is brought by a named insured or a person described in
250     Subsection 31A-22-305(1) and is asserted against the covered person's underinsured motorist
251     carrier, the claimant may elect to resolve the claim:
252          (i) by submitting the claim to binding arbitration; or
253          (ii) through litigation.
254          (b) Unless otherwise provided in the policy under which underinsured benefits are
255     claimed, the election provided in Subsection (8)(a) is available to the claimant only, except that
256     if the policy under which insured benefits are claimed provides that either an insured or the
257     insurer may elect arbitration, the insured or the insurer may elect arbitration and that election to
258     arbitrate shall stay the litigation of the claim under Subsection (8)(a)(ii).
259          (c) Once a claimant elects to commence litigation under Subsection (8)(a)(ii), the
260     claimant may not elect to resolve the claim through binding arbitration under this section
261     without the written consent of the underinsured motorist coverage carrier.
262          (d) For purposes of the statute of limitations applicable to a claim described in
263     Subsection (8)(a), the claim is considered filed when the claimant submits the claim to binding
264     arbitration in accordance with this Subsection (8).
265          [(d)] (e) (i) Unless otherwise agreed to in writing by the parties, a claim that is
266     submitted to binding arbitration under Subsection (8)(a)(i) shall be resolved by a single
267     arbitrator.
268          (ii) All parties shall agree on the single arbitrator selected under Subsection
269     (8)[(d)](e)(i).
270          (iii) If the parties are unable to agree on a single arbitrator as required under Subsection
271     (8)[(d)](e)(ii), the parties shall select a panel of three arbitrators.
272          [(e)] (f) If the parties select a panel of three arbitrators under Subsection (8)[(d)](e)(iii):
273          (i) each side shall select one arbitrator; and
274          (ii) the arbitrators appointed under Subsection (8)[(e)](f)(i) shall select one additional
275     arbitrator to be included in the panel.

276          [(f)] (g) Unless otherwise agreed to in writing:
277          (i) each party shall pay an equal share of the fees and costs of the arbitrator selected
278     under Subsection (8)[(d)](e)(i); or
279          (ii) if an arbitration panel is selected under Subsection (8)[(d)](e)(iii):
280          (A) each party shall pay the fees and costs of the arbitrator selected by that party; and
281          (B) each party shall pay an equal share of the fees and costs of the arbitrator selected
282     under Subsection (8)[(e)](f)(ii).
283          [(g)] (h) Except as otherwise provided in this section or unless otherwise agreed to in
284     writing by the parties, an arbitration proceeding conducted under this section is governed by
285     Title 78B, Chapter 11, Utah Uniform Arbitration Act.
286          [(h)] (i) (i) The arbitration shall be conducted in accordance with Rules 26(a)(4)
287     through (f), 27 through 37, 54, and 68 of the Utah Rules of Civil Procedure, once the
288     requirements of Subsections (9)(a) through (c) are satisfied.
289          (ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure
290     shall be determined based on the claimant's specific monetary amount in the written demand
291     for payment of uninsured motorist coverage benefits as required in Subsection (9)(a)(i)(A).
292          (iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to
293     arbitration claims under this part.
294          [(i)] (j) An issue of discovery shall be resolved by the arbitrator or the arbitration panel.
295          [(j)] (k) A written decision by a single arbitrator or by a majority of the arbitration
296     panel constitutes a final decision.
297          [(k)] (l) (i) Except as provided in Subsection (9), the amount of an arbitration award
298     may not exceed the underinsured motorist policy limits of all applicable underinsured motorist
299     policies, including applicable underinsured motorist umbrella policies.
300          (ii) If the initial arbitration award exceeds the underinsured motorist policy limits of all
301     applicable underinsured motorist policies, the arbitration award shall be reduced to an amount
302     equal to the combined underinsured motorist policy limits of all applicable underinsured
303     motorist policies.
304          [(l)] (m) The arbitrator or arbitration panel may not decide an issue of coverage or
305     extra-contractual damages, including:
306          (i) whether the claimant is a covered person;

307          (ii) whether the policy extends coverage to the loss; or
308          (iii) an allegation or claim asserting consequential damages or bad faith liability.
309          [(m)] (n) The arbitrator or arbitration panel may not conduct arbitration on a class-wide
310     or class-representative basis.
311          [(n)] (o) If the arbitrator or arbitration panel finds that the arbitration is not brought,
312     pursued, or defended in good faith, the arbitrator or arbitration panel may award reasonable
313     attorney fees and costs against the party that failed to bring, pursue, or defend the arbitration in
314     good faith.
315          [(o)] (p) An arbitration award issued under this section shall be the final resolution of
316     all claims not excluded by Subsection (8)[(l)](m) between the parties unless:
317          (i) the award is procured by corruption, fraud, or other undue means;
318          (ii) either party, within 20 days after service of the arbitration award:
319          (A) files a complaint requesting a trial de novo in the district court; and
320          (B) serves the nonmoving party with a copy of the complaint requesting a trial de novo
321     under Subsection (8)[(o)](p)(ii)(A).
322          [(p)] (q) (i) Upon filing a complaint for a trial de novo under Subsection (8)[(o)](p), a
323     claim shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and Utah
324     Rules of Evidence in the district court.
325          (ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may
326     request a jury trial with a complaint requesting a trial de novo under Subsection
327     (8)[(o)](p)(ii)(A).
328          [(q)] (r) (i) If the claimant, as the moving party in a trial de novo requested under
329     Subsection (8)[(o)](p), does not obtain a verdict that is at least $5,000 and is at least 20%
330     greater than the arbitration award, the claimant is responsible for all of the nonmoving party's
331     costs.
332          (ii) If the underinsured motorist carrier, as the moving party in a trial de novo requested
333     under Subsection (8)[(o)](p), does not obtain a verdict that is at least 20% less than the
334     arbitration award, the underinsured motorist carrier is responsible for all of the nonmoving
335     party's costs.
336          (iii) Except as provided in Subsection (8)[(q)](r)(iv), the costs under this Subsection
337     (8)[(q)](r) shall include:

338          (A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and
339          (B) the costs of expert witnesses and depositions.
340          (iv) An award of costs under this Subsection (8)[(q)](r) may not exceed $2,500 unless
341     Subsection (9)(h)(iii) applies.
342          [(r)] (s) For purposes of determining whether a party's verdict is greater or less than the
343     arbitration award under Subsection (8)[(q)](r), a court may not consider any recovery or other
344     relief granted on a claim for damages if the claim for damages:
345          (i) was not fully disclosed in writing prior to the arbitration proceeding; or
346          (ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil
347     Procedure.
348          [(s)] (t) If a district court determines, upon a motion of the nonmoving party, that a
349     moving party's use of the trial de novo process is filed in bad faith in accordance with Section
350     78B-5-825, the district court may award reasonable attorney fees to the nonmoving party.
351          [(t)] (u) Nothing in this section is intended to limit a claim under another portion of an
352     applicable insurance policy.
353          [(u)] (v) If there are multiple underinsured motorist policies, as set forth in Subsection
354     (4), the claimant may elect to arbitrate in one hearing the claims against all the underinsured
355     motorist carriers.
356          (9) (a) Within 30 days after a covered person elects to submit a claim for underinsured
357     motorist benefits to binding arbitration or files litigation, the covered person shall provide to
358     the underinsured motorist carrier:
359          (i) a written demand for payment of underinsured motorist coverage benefits, setting
360     forth:
361          (A) subject to Subsection (9)(l), the specific monetary amount of the demand,
362     including a computation of the covered person's claimed past medical expenses, claimed past
363     lost wages, and all other claimed past economic damages; and
364          (B) the factual and legal basis and any supporting documentation for the demand;
365          (ii) a written statement under oath disclosing:
366          (A) (I) the names and last known addresses of all health care providers who have
367     rendered health care services to the covered person that are material to the claims for which the
368     underinsured motorist benefits are sought for a period of five years preceding the date of the

369     event giving rise to the claim for underinsured motorist benefits up to the time the election for
370     arbitration or litigation has been exercised; and
371          (II) the names and last known addresses of the health care providers who have rendered
372     health care services to the covered person, which the covered person claims are immaterial to
373     the claims for which underinsured motorist benefits are sought, for a period of five years
374     preceding the date of the event giving rise to the claim for underinsured motorist benefits up to
375     the time the election for arbitration or litigation has been exercised that have not been disclosed
376     under Subsection (9)(a)(ii)(A)(I);
377          (B) (I) the names and last known addresses of all health insurers or other entities to
378     whom the covered person has submitted claims for health care services or benefits material to
379     the claims for which underinsured motorist benefits are sought, for a period of five years
380     preceding the date of the event giving rise to the claim for underinsured motorist benefits up to
381     the time the election for arbitration or litigation has been exercised; and
382          (II) the names and last known addresses of the health insurers or other entities to whom
383     the covered person has submitted claims for health care services or benefits, which the covered
384     person claims are immaterial to the claims for which underinsured motorist benefits are sought,
385     for a period of five years preceding the date of the event giving rise to the claim for
386     underinsured motorist benefits up to the time the election for arbitration or litigation have not
387     been disclosed;
388          (C) if lost wages, diminished earning capacity, or similar damages are claimed, all
389     employers of the covered person for a period of five years preceding the date of the event
390     giving rise to the claim for underinsured motorist benefits up to the time the election for
391     arbitration or litigation has been exercised;
392          (D) other documents to reasonably support the claims being asserted; and
393          (E) all state and federal statutory lienholders including a statement as to whether the
394     covered person is a recipient of Medicare or Medicaid benefits or Utah Children's Health
395     Insurance Program benefits under Title 26, Chapter 40, Utah Children's Health Insurance Act,
396     or if the claim is subject to any other state or federal statutory liens; and
397          (iii) signed authorizations to allow the underinsured motorist carrier to only obtain
398     records and billings from the individuals or entities disclosed under Subsections
399     (9)(a)(ii)(A)(I), (B)(I), and (C).

400          (b) (i) If the underinsured motorist carrier determines that the disclosure of undisclosed
401     health care providers or health care insurers under Subsection (9)(a)(ii) is reasonably necessary,
402     the underinsured motorist carrier may:
403          (A) make a request for the disclosure of the identity of the health care providers or
404     health care insurers; and
405          (B) make a request for authorizations to allow the underinsured motorist carrier to only
406     obtain records and billings from the individuals or entities not disclosed.
407          (ii) If the covered person does not provide the requested information within 10 days:
408          (A) the covered person shall disclose, in writing, the legal or factual basis for the
409     failure to disclose the health care providers or health care insurers; and
410          (B) either the covered person or the underinsured motorist carrier may request the
411     arbitrator or arbitration panel to resolve the issue of whether the identities or records are to be
412     provided if the covered person has elected arbitration.
413          (iii) The time periods imposed by Subsection (9)(c)(i) are tolled pending resolution of
414     the dispute concerning the disclosure and production of records of the health care providers or
415     health care insurers.
416          (c) (i) An underinsured motorist carrier that receives an election for arbitration or a
417     notice of filing litigation and the demand for payment of underinsured motorist benefits under
418     Subsection (9)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the
419     demand and receipt of the items specified in Subsections (9)(a)(i) through (iii), to:
420          (A) provide a written response to the written demand for payment provided for in
421     Subsection (9)(a)(i);
422          (B) except as provided in Subsection (9)(c)(i)(C), tender the amount, if any, of the
423     underinsured motorist carrier's determination of the amount owed to the covered person; and
424          (C) if the covered person is a recipient of Medicare or Medicaid benefits or Utah
425     Children's Health Insurance Program benefits under Title 26, Chapter 40, Utah Children's
426     Health Insurance Act, or if the claim is subject to any other state or federal statutory liens,
427     tender the amount, if any, of the underinsured motorist carrier's determination of the amount
428     owed to the covered person less:
429          (I) if the amount of the state or federal statutory lien is established, the amount of the
430     lien; or

431          (II) if the amount of the state or federal statutory lien is not established, two times the
432     amount of the medical expenses subject to the state or federal statutory lien until such time as
433     the amount of the state or federal statutory lien is established.
434          (ii) If the amount tendered by the underinsured motorist carrier under Subsection
435     (9)(c)(i) is the total amount of the underinsured motorist policy limits, the tendered amount
436     shall be accepted by the covered person.
437          (d) A covered person who receives a written response from an underinsured motorist
438     carrier as provided for in Subsection (9)(c)(i), may:
439          (i) elect to accept the amount tendered in Subsection (9)(c)(i) as payment in full of all
440     underinsured motorist claims; or
441          (ii) elect to:
442          (A) accept the amount tendered in Subsection (9)(c)(i) as partial payment of all
443     underinsured motorist claims; and
444          (B) continue to litigate or arbitrate the remaining claim in accordance with the election
445     made under Subsections (8)(a), (b), and (c).
446          (e) If a covered person elects to accept the amount tendered under Subsection (9)(c)(i)
447     as partial payment of all underinsured motorist claims, the final award obtained through
448     arbitration, litigation, or later settlement shall be reduced by any payment made by the
449     underinsured motorist carrier under Subsection (9)(c)(i).
450          (f) In an arbitration proceeding on the remaining underinsured claims:
451          (i) the parties may not disclose to the arbitrator or arbitration panel the amount paid
452     under Subsection (9)(c)(i) until after the arbitration award has been rendered; and
453          (ii) the parties may not disclose the amount of the limits of underinsured motorist
454     benefits provided by the policy.
455          (g) If the final award obtained through arbitration or litigation is greater than the
456     average of the covered person's initial written demand for payment provided for in Subsection
457     (9)(a)(i) and the underinsured motorist carrier's initial written response provided for in
458     Subsection (9)(c)(i), the underinsured motorist carrier shall pay:
459          (i) the final award obtained through arbitration or litigation, except that if the award
460     exceeds the policy limits of the subject underinsured motorist policy by more than $15,000, the
461     amount shall be reduced to an amount equal to the policy limits plus $15,000; and

462          (ii) any of the following applicable costs:
463          (A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;
464          (B) the arbitrator or arbitration panel's fee; and
465          (C) the reasonable costs of expert witnesses and depositions used in the presentation of
466     evidence during arbitration or litigation.
467          (h) (i) The covered person shall provide an affidavit of costs within five days of an
468     arbitration award.
469          (ii) (A) Objection to the affidavit of costs shall specify with particularity the costs to
470     which the underinsured motorist carrier objects.
471          (B) The objection shall be resolved by the arbitrator or arbitration panel.
472          (iii) The award of costs by the arbitrator or arbitration panel under Subsection (9)(g)(ii)
473     may not exceed $5,000.
474          (i) (i) A covered person shall disclose all material information, other than rebuttal
475     evidence, within 30 days after a covered person elects to submit a claim for underinsured
476     motorist coverage benefits to binding arbitration or files litigation as specified in Subsection
477     (9)(a).
478          (ii) If the information under Subsection (9)(i)(i) is not disclosed, the covered person
479     may not recover costs or any amounts in excess of the policy under Subsection (9)(g).
480          (j) This Subsection (9) does not limit any other cause of action that arose or may arise
481     against the underinsured motorist carrier from the same dispute.
482          (k) The provisions of this Subsection (9) only apply to motor vehicle accidents that
483     occur on or after March 30, 2010.
484          (l) (i) The written demand requirement in Subsection (9)(a)(i)(A) does not affect the
485     covered person's requirement to provide a computation of any other economic damages
486     claimed, and the one or more respondents shall have a reasonable time after the receipt of the
487     computation of any other economic damages claimed to conduct fact and expert discovery as to
488     any additional damages claimed. The changes made by Laws of Utah 2014, Chapter 290,
489     Section 11, and Chapter 300, Section 11, to this Subsection (9)(l) and Subsection (9)(a)(i)(A)
490     apply to a claim submitted to binding arbitration or through litigation on or after May 13, 2014.
491          (ii) The changes made by Laws of Utah 2014, Chapter 290, Section 11, and Chapter
492     300, Section 11, under Subsections (9)(a)(ii)(A)(II) and (B)(II) apply to a claim submitted to

493     binding arbitration or through litigation on or after May 13, 2014.






Legislative Review Note
Office of Legislative Research and General Counsel