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7 LONG TITLE
8 Committee Note:
9 The Business and Labor Interim Committee recommended this bill.
10 Legislative Vote: 12 voting for 0 voting against 8 absent
11 General Description:
12 This bill amends and enacts provisions under Title 31A, Insurance Code.
13 Highlighted Provisions:
14 This bill:
15 ▸ defines terms;
16 ▸ amends the scope and applicability of the Insurance Code;
17 ▸ removes the requirement that the Insurance Department employ a chief examiner;
18 ▸ permits a signature of the insurance commissioner to be in a format that affixes an
19 exact copy of the signature;
20 ▸ prohibits more than two members of the Title and Escrow Commission to be
21 employees of an entity operating under an affiliated business arrangement;
22 ▸ amends requirements for doing business in relation to service contract providers and
23 warrantors;
24 ▸ amends provisions regarding required disclosures for a service contract or a vehicle
25 protection product warranty;
26 ▸ permits the insurance commissioner to exempt a health maintenance organization
27 from certain deposit requirements without a hearing;
28 ▸ amends the date before which a health insurer shall submit a written report
29 regarding coverage for opioids;
30 ▸ amends provisions regarding credit allowed a domestic ceding insurer against
31 reserves for reinsurance, including:
32 • establishing eligibility for credit;
33 • requiring the insurance commissioner to create and publish a list of reciprocal
34 jurisdictions;
35 • requiring the insurance commissioner to create and publish a list of qualified
36 assuming insurers;
37 • requiring rulemaking;
38 • establishing conditions for suspension of an assuming insurer's eligibility; and
39 • addressing the reduction or elimination of credit;
40 ▸ amends requirements for the loss and loss adjustment expense factors included in
41 rates filed in relation to workers' compensation;
42 ▸ amends certain filing requirements to reflect current practice;
43 ▸ amends the forms that the insurance commissioner may prohibit;
44 ▸ amends limitations of actions for an accident and health insurance policy;
45 ▸ outlines requirements for a notice of assignment related to a debt;
46 ▸ amends requirements related to the shared common purposes of association groups;
47 ▸ amends provisions regarding dependent coverage for accident and health insurance;
48 ▸ enacts the Limited Long-Term Care Insurance Act, which:
49 • defines terms;
50 • establishes disclosure and performance standards for limited long-term care
51 insurance;
52 • establishes parameters of a limited long-term care insurance policy offering a
53 nonforfeiture benefit; and
54 • requires the insurance commissioner to make rules;
55 ▸ amends provisions regarding the licensing of administrators;
56 ▸ amends jurisdictional provisions under the Insurance Receivership Act; and
57 ▸ permits a captive insurance company to provide reinsurance by another insurer with
58 prior approval of the commissioner; and
59 ▸ makes technical and conforming changes.
60 Money Appropriated in this Bill:
61 None
62 Other Special Clauses:
63 None
64 Utah Code Sections Affected:
65 AMENDS:
66 31A-1-103, as last amended by Laws of Utah 2017, Chapter 27
67 31A-1-301, as last amended by Laws of Utah 2019, Chapter 193
68 31A-2-104, as last amended by Laws of Utah 2014, Chapters 290 and 300
69 31A-2-110, as last amended by Laws of Utah 1986, Chapter 204
70 31A-2-212, as last amended by Laws of Utah 2016, Chapter 138
71 31A-2-218, as last amended by Laws of Utah 2015, Chapter 283
72 31A-2-309, as last amended by Laws of Utah 2016, Chapter 138
73 31A-2-403, as last amended by Laws of Utah 2019, Chapter 193
74 31A-6a-101, as last amended by Laws of Utah 2018, Chapter 319
75 31A-6a-103, as last amended by Laws of Utah 2015, Chapter 244
76 31A-6a-104, as last amended by Laws of Utah 2018, Chapter 319
77 31A-8-211, as last amended by Laws of Utah 2002, Chapter 308
78 31A-17-404, as last amended by Laws of Utah 2017, Chapter 168
79 31A-17-404.3, as last amended by Laws of Utah 2016, Chapter 138
80 31A-17-601, as last amended by Laws of Utah 2001, Chapter 116
81 31A-19a-404, as renumbered and amended by Laws of Utah 1999, Chapter 130
82 31A-19a-405, as renumbered and amended by Laws of Utah 1999, Chapter 130
83 31A-19a-406, as renumbered and amended by Laws of Utah 1999, Chapter 130
84 31A-21-201, as last amended by Laws of Utah 2019, Chapter 193
85 31A-21-301, as last amended by Laws of Utah 2010, Chapter 10
86 31A-21-313, as last amended by Laws of Utah 2015, Chapter 244
87 31A-22-412, as last amended by Laws of Utah 1986, Chapter 204
88 31A-22-413, as last amended by Laws of Utah 2013, Chapter 264
89 31A-22-505, as last amended by Laws of Utah 2017, Chapter 168
90 31A-22-610.5, as last amended by Laws of Utah 2018, Chapter 443
91 31A-22-615.5, as enacted by Laws of Utah 2017, Chapter 53
92 31A-23a-111, as last amended by Laws of Utah 2019, Chapter 193
93 31A-23a-205, as renumbered and amended by Laws of Utah 2003, Chapter 298
94 31A-23a-415, as last amended by Laws of Utah 2019, Chapter 193
95 31A-23b-401, as last amended by Laws of Utah 2019, Chapter 193
96 31A-25-208, as last amended by Laws of Utah 2019, Chapter 193
97 31A-26-206, as last amended by Laws of Utah 2014, Chapters 290 and 300
98 31A-26-213, as last amended by Laws of Utah 2019, Chapter 193
99 31A-26-301.6, as last amended by Laws of Utah 2009, Chapter 11
100 31A-27a-105, as enacted by Laws of Utah 2007, Chapter 309
101 31A-27a-501, as enacted by Laws of Utah 2007, Chapter 309
102 31A-30-117, as last amended by Laws of Utah 2015, Chapter 283
103 31A-30-118, as last amended by Laws of Utah 2019, Chapter 193
104 31A-35-402, as last amended by Laws of Utah 2016, Chapter 234
105 31A-37-303, as last amended by Laws of Utah 2017, Chapter 168
106 34A-2-202, as last amended by Laws of Utah 2009, Chapter 212
107 ENACTS:
108 31A-22-2001, Utah Code Annotated 1953
109 31A-22-2002, Utah Code Annotated 1953
110 31A-22-2003, Utah Code Annotated 1953
111 31A-22-2004, Utah Code Annotated 1953
112 31A-22-2005, Utah Code Annotated 1953
113 31A-22-2006, Utah Code Annotated 1953
114
115 Be it enacted by the Legislature of the state of Utah:
116 Section 1. Section 31A-1-103 is amended to read:
117 31A-1-103. Scope and applicability of title.
118 (1) This title does not apply to:
119 (a) a retainer contract made by an attorney-at-law:
120 (i) with an individual client; and
121 (ii) under which fees are based on estimates of the nature and amount of services to be
122 provided to the specific client;
123 (b) a contract similar to a contract described in Subsection (1)(a) made with a group of
124 clients involved in the same or closely related legal matters;
125 (c) an arrangement for providing benefits that do not exceed a limited amount of
126 consultations, advice on simple legal matters, either alone or in combination with referral
127 services, or the promise of fee discounts for handling other legal matters;
128 (d) limited legal assistance on an informal basis involving neither an express
129 contractual obligation nor reasonable expectations, in the context of an employment,
130 membership, educational, or similar relationship;
131 (e) legal assistance by employee organizations to their members in matters relating to
132 employment;
133 (f) death, accident, health, or disability benefits provided to a person by an organization
134 or its affiliate if:
135 (i) the organization is tax exempt under Section 501(c)(3) of the Internal Revenue
136 Code and has had its principal place of business in Utah for at least five years;
137 (ii) the person is not an employee of the organization; and
138 (iii) (A) substantially all the person's time in the organization is spent providing
139 voluntary services:
140 (I) in furtherance of the organization's purposes;
141 (II) for a designated period of time; and
142 (III) for which no compensation, other than expenses, is paid; or
143 (B) the time since the service under Subsection (1)(f)(iii)(A) was completed is no more
144 than 18 months; or
145 (g) a prepaid contract of limited duration that provides for scheduled maintenance only.
146 (2) (a) This title restricts otherwise legitimate business activity.
147 (b) What this title does not prohibit is permitted unless contrary to other provisions of
148 Utah law.
149 (3) Except as otherwise expressly provided, this title does not apply to:
150 (a) those activities of an insurer where state jurisdiction is preempted by Section 514 of
151 the federal Employee Retirement Income Security Act of 1974, as amended;
152 (b) ocean marine insurance;
153 (c) death, accident, health, or disability benefits provided by an organization if the
154 organization:
155 (i) has as [
156 social, or religious objectives rather than to provide death, accident, health, or disability
157 benefits;
158 (ii) does not incur a legal obligation to pay a specified amount; and
159 (iii) does not create reasonable expectations of receiving a specified amount on the part
160 of an insured person;
161 (d) other business specified in rules adopted by the commissioner on a finding that:
162 (i) the transaction of the business in this state does not require regulation for the
163 protection of the interests of the residents of this state; or
164 (ii) it would be impracticable to require compliance with this title;
165 (e) except as provided in Subsection (4), a transaction independently procured through
166 negotiations under Section 31A-15-104;
167 (f) self-insurance;
168 (g) reinsurance;
169 (h) subject to Subsection (5), employee and labor union group or blanket insurance
170 covering risks in this state if:
171 (i) the policyholder exists primarily for purposes other than to procure insurance;
172 (ii) the policyholder:
173 (A) is not a resident of this state;
174 (B) is not a domestic corporation; or
175 (C) does not have [
176 (iii) no more than 25% of the certificate holders or insureds are residents of this state;
177 (iv) on request of the commissioner, the insurer files with the department a copy of the
178 policy and a copy of each form or certificate; and
179 (v) (A) the insurer agrees to pay premium taxes on the Utah portion of [
180 insurer's business, as if [
181 (B) the insurer provides the commissioner with the security the commissioner
182 considers necessary for the payment of premium taxes under Title 59, Chapter 9, Taxation of
183 Admitted Insurers;
184 (i) to the extent provided in Subsection (6):
185 (i) a manufacturer's or seller's warranty; and
186 (ii) a manufacturer's or seller's service contract;
187 (j) except to the extent provided in Subsection (7), a public agency insurance mutual;
188 or
189 (k) except as provided in Chapter 6b, Guaranteed Asset Protection Waiver Act, a
190 guaranteed asset protection waiver.
191 (4) A transaction described in Subsection (3)(e) is subject to taxation under Section
192 31A-3-301.
193 (5) (a) After a hearing, the commissioner may order an insurer of certain group or
194 blanket contracts to transfer the Utah portion of the business otherwise exempted under
195 Subsection (3)(h) to an authorized insurer if the contracts have been written by an unauthorized
196 insurer.
197 (b) If the commissioner finds that the conditions required for the exemption of a group
198 or blanket insurer are not satisfied or that adequate protection to residents of this state is not
199 provided, the commissioner may require:
200 (i) the insurer to be authorized to do business in this state; or
201 (ii) that any of the insurer's transactions be subject to this title.
202 (c) Subsection (3)(h) does not apply to blanket accident and health insurance.
203 (6) (a) As used in Subsection (3)(i) and this Subsection (6):
204 (i) "manufacturer's or seller's service contract" means a service contract:
205 (A) made available by:
206 (I) a manufacturer of a product;
207 (II) a seller of a product; or
208 (III) an affiliate of a manufacturer or seller of a product;
209 (B) made available:
210 (I) on one or more specific products; or
211 (II) on products that are components of a system; and
212 (C) under which the person described in Subsection (6)(a)(i)(A) is liable for services to
213 be provided under the service contract including, if the manufacturer's or seller's service
214 contract designates, providing parts and labor;
215 (ii) "manufacturer's or seller's warranty" means the guaranty of:
216 (A) (I) the manufacturer of a product;
217 (II) a seller of a product; or
218 (III) an affiliate of a manufacturer or seller of a product;
219 (B) (I) on one or more specific products; or
220 (II) on products that are components of a system; and
221 (C) under which the person described in Subsection (6)(a)(ii)(A) is liable for services
222 to be provided under the warranty, including, if the manufacturer's or seller's warranty
223 designates, providing parts and labor; and
224 (iii) "service contract" means the same as that term is defined in Section 31A-6a-101.
225 (b) A manufacturer's or seller's warranty may be designated as:
226 (i) a warranty;
227 (ii) a guaranty; or
228 (iii) a term similar to a term described in Subsection (6)(b)(i) or (ii).
229 (c) This title does not apply to:
230 (i) a manufacturer's or seller's warranty;
231 (ii) a manufacturer's or seller's service contract paid for with consideration that is in
232 addition to the consideration paid for the product itself; and
233 (iii) a service contract that is not a manufacturer's or seller's warranty or manufacturer's
234 or seller's service contract if:
235 (A) the service contract is paid for with consideration that is in addition to the
236 consideration paid for the product itself;
237 (B) the service contract is for the repair or maintenance of goods;
238 (C) the [
239
240 (D) the product is not a motor vehicle[
241 (E) the product is not the subject of a home warranty service contract.
242 (d) This title does not apply to a manufacturer's or seller's warranty or service contract
243 paid for with consideration that is in addition to the consideration paid for the product itself
244 regardless of whether the manufacturer's or seller's warranty or service contract is sold:
245 (i) at the time of the purchase of the product; or
246 (ii) at a time other than the time of the purchase of the product.
247 [
248
249 [
250
251
252
253 [
254
255 [
256 [
257
258 (7) (a) For purposes of this Subsection (7), "public agency insurance mutual" means an
259 entity formed by two or more political subdivisions or public agencies of the state:
260 (i) under Title 11, Chapter 13, Interlocal Cooperation Act; and
261 (ii) for the purpose of providing for the political subdivisions or public agencies:
262 (A) subject to Subsection (7)(b), insurance coverage; or
263 (B) risk management.
264 (b) Notwithstanding Subsection (7)(a)(ii)(A), a public agency insurance mutual may
265 not provide health insurance unless the public agency insurance mutual provides the health
266 insurance using:
267 (i) a third party administrator licensed under Chapter 25, Third Party Administrators;
268 (ii) an admitted insurer; or
269 (iii) a program authorized by Title 49, Chapter 20, Public Employees' Benefit and
270 Insurance Program Act.
271 (c) Except for this Subsection (7), a public agency insurance mutual is exempt from
272 this title.
273 (d) A public agency insurance mutual is considered to be a governmental entity and
274 political subdivision of the state with all of the rights, privileges, and immunities of a
275 governmental entity or political subdivision of the state including all the rights and benefits of
276 Title 63G, Chapter 7, Governmental Immunity Act of Utah.
277 Section 2. Section 31A-1-301 is amended to read:
278 31A-1-301. Definitions.
279 As used in this title, unless otherwise specified:
280 (1) (a) "Accident and health insurance" means insurance to provide protection against
281 economic losses resulting from:
282 (i) a medical condition including:
283 (A) a medical care expense; or
284 (B) the risk of disability;
285 (ii) accident; or
286 (iii) sickness.
287 (b) "Accident and health insurance":
288 (i) includes a contract with disability contingencies including:
289 (A) an income replacement contract;
290 (B) a health care contract;
291 (C) an expense reimbursement contract;
292 (D) a credit accident and health contract;
293 (E) a continuing care contract; and
294 (F) a long-term care contract; and
295 (ii) may provide:
296 (A) hospital coverage;
297 (B) surgical coverage;
298 (C) medical coverage;
299 (D) loss of income coverage;
300 (E) prescription drug coverage;
301 (F) dental coverage; or
302 (G) vision coverage.
303 (c) "Accident and health insurance" does not include workers' compensation insurance.
304 (d) For purposes of a national licensing registry, "accident and health insurance" is the
305 same as "accident and health or sickness insurance."
306 (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
307 63G, Chapter 3, Utah Administrative Rulemaking Act.
308 (3) "Administrator" means the same as that term is defined in Subsection [
309 (4) "Adult" means an individual who has attained the age of at least 18 years.
310 (5) "Affiliate" means a person who controls, is controlled by, or is under common
311 control with, another person. A corporation is an affiliate of another corporation, regardless of
312 ownership, if substantially the same group of individuals manage the corporations.
313 (6) "Agency" means:
314 (a) a person other than an individual, including a sole proprietorship by which an
315 individual does business under an assumed name; and
316 (b) an insurance organization licensed or required to be licensed under Section
317 31A-23a-301, 31A-25-207, or 31A-26-209.
318 (7) "Alien insurer" means an insurer domiciled outside the United States.
319 (8) "Amendment" means an endorsement to an insurance policy or certificate.
320 (9) "Annuity" means an agreement to make periodical payments for a period certain or
321 over the lifetime of one or more individuals if the making or continuance of all or some of the
322 series of the payments, or the amount of the payment, is dependent upon the continuance of
323 human life.
324 (10) "Application" means a document:
325 (a) (i) completed by an applicant to provide information about the risk to be insured;
326 and
327 (ii) that contains information that is used by the insurer to evaluate risk and decide
328 whether to:
329 (A) insure the risk under:
330 (I) the coverage as originally offered; or
331 (II) a modification of the coverage as originally offered; or
332 (B) decline to insure the risk; or
333 (b) used by the insurer to gather information from the applicant before issuance of an
334 annuity contract.
335 (11) "Articles" or "articles of incorporation" means:
336 (a) the original articles;
337 (b) a special law;
338 (c) a charter;
339 (d) an amendment;
340 (e) restated articles;
341 (f) articles of merger or consolidation;
342 (g) a trust instrument;
343 (h) another constitutive document for a trust or other entity that is not a corporation;
344 and
345 (i) an amendment to an item listed in Subsections (11)(a) through (h).
346 (12) "Bail bond insurance" means a guarantee that a person will attend court when
347 required, up to and including surrender of the person in execution of a sentence imposed under
348 Subsection 77-20-7(1), as a condition to the release of that person from confinement.
349 (13) "Binder" means the same as that term is defined in Section 31A-21-102.
350 (14) "Blanket insurance policy" means a group policy covering a defined class of
351 persons:
352 (a) without individual underwriting or application; and
353 (b) that is determined by definition without designating each person covered.
354 (15) "Board," "board of trustees," or "board of directors" means the group of persons
355 with responsibility over, or management of, a corporation, however designated.
356 (16) "Bona fide office" means a physical office in this state:
357 (a) that is open to the public;
358 (b) that is staffed during regular business hours on regular business days; and
359 (c) at which the public may appear in person to obtain services.
360 (17) "Business entity" means:
361 (a) a corporation;
362 (b) an association;
363 (c) a partnership;
364 (d) a limited liability company;
365 (e) a limited liability partnership; or
366 (f) another legal entity.
367 (18) "Business of insurance" means the same as that term is defined in Subsection (94).
368 (19) "Business plan" means the information required to be supplied to the
369 commissioner under Subsections 31A-5-204(2)(i) and (j), including the information required
370 when these subsections apply by reference under:
371 (a) Section 31A-8-205; or
372 (b) Subsection 31A-9-205(2).
373 (20) (a) "Bylaws" means the rules adopted for the regulation or management of a
374 corporation's affairs, however designated.
375 (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
376 corporation.
377 (21) "Captive insurance company" means:
378 (a) an insurer:
379 (i) owned by another organization; and
380 (ii) whose exclusive purpose is to insure risks of the parent organization and an
381 affiliated company; or
382 (b) in the case of a group or association, an insurer:
383 (i) owned by the insureds; and
384 (ii) whose exclusive purpose is to insure risks of:
385 (A) a member organization;
386 (B) a group member; or
387 (C) an affiliate of:
388 (I) a member organization; or
389 (II) a group member.
390 (22) "Casualty insurance" means liability insurance.
391 (23) "Certificate" means evidence of insurance given to:
392 (a) an insured under a group insurance policy; or
393 (b) a third party.
394 (24) "Certificate of authority" is included within the term "license."
395 (25) "Claim," unless the context otherwise requires, means a request or demand on an
396 insurer for payment of a benefit according to the terms of an insurance policy.
397 (26) "Claims-made coverage" means an insurance contract or provision limiting
398 coverage under a policy insuring against legal liability to claims that are first made against the
399 insured while the policy is in force.
400 (27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
401 commissioner.
402 (b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent
403 supervisory official of another jurisdiction.
404 (28) (a) "Continuing care insurance" means insurance that:
405 (i) provides board and lodging;
406 (ii) provides one or more of the following:
407 (A) a personal service;
408 (B) a nursing service;
409 (C) a medical service; or
410 (D) any other health-related service; and
411 (iii) provides the coverage described in this Subsection (28)(a) under an agreement
412 effective:
413 (A) for the life of the insured; or
414 (B) for a period in excess of one year.
415 (b) Insurance is continuing care insurance regardless of whether or not the board and
416 lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
417 (29) (a) "Control," "controlling," "controlled," or "under common control" means the
418 direct or indirect possession of the power to direct or cause the direction of the management
419 and policies of a person. This control may be:
420 (i) by contract;
421 (ii) by common management;
422 (iii) through the ownership of voting securities; or
423 (iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
424 (b) There is no presumption that an individual holding an official position with another
425 person controls that person solely by reason of the position.
426 (c) A person having a contract or arrangement giving control is considered to have
427 control despite the illegality or invalidity of the contract or arrangement.
428 (d) There is a rebuttable presumption of control in a person who directly or indirectly
429 owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
430 voting securities of another person.
431 (30) "Controlled insurer" means a licensed insurer that is either directly or indirectly
432 controlled by a producer.
433 (31) "Controlling person" means a person that directly or indirectly has the power to
434 direct or cause to be directed, the management, control, or activities of a reinsurance
435 intermediary.
436 (32) "Controlling producer" means a producer who directly or indirectly controls an
437 insurer.
438 (33) "Corporate governance annual disclosure" means a report an insurer or insurance
439 group files in accordance with the requirements of Chapter 16b, Corporate Governance Annual
440 Disclosure Act.
441 (34) (a) "Corporation" means an insurance corporation, except when referring to:
442 (i) a corporation doing business:
443 (A) as:
444 (I) an insurance producer;
445 (II) a surplus lines producer;
446 (III) a limited line producer;
447 (IV) a consultant;
448 (V) a managing general agent;
449 (VI) a reinsurance intermediary;
450 (VII) a third party administrator; or
451 (VIII) an adjuster; and
452 (B) under:
453 (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
454 Reinsurance Intermediaries;
455 (II) Chapter 25, Third Party Administrators; or
456 (III) Chapter 26, Insurance Adjusters; or
457 (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
458 Holding Companies.
459 (b) "Mutual" or "mutual corporation" means a mutual insurance corporation.
460 (c) "Stock corporation" means a stock insurance corporation.
461 (35) (a) "Creditable coverage" has the same meaning as provided in federal regulations
462 adopted pursuant to the Health Insurance Portability and Accountability Act.
463 (b) "Creditable coverage" includes coverage that is offered through a public health plan
464 such as:
465 (i) the Primary Care Network Program under a Medicaid primary care network
466 demonstration waiver obtained subject to Section 26-18-3;
467 (ii) the Children's Health Insurance Program under Section 26-40-106; or
468 (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
469 No. 101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. No.
470 109-415.
471 (36) "Credit accident and health insurance" means insurance on a debtor to provide
472 indemnity for payments coming due on a specific loan or other credit transaction while the
473 debtor has a disability.
474 (37) (a) "Credit insurance" means insurance offered in connection with an extension of
475 credit that is limited to partially or wholly extinguishing that credit obligation.
476 (b) "Credit insurance" includes:
477 (i) credit accident and health insurance;
478 (ii) credit life insurance;
479 (iii) credit property insurance;
480 (iv) credit unemployment insurance;
481 (v) guaranteed automobile protection insurance;
482 (vi) involuntary unemployment insurance;
483 (vii) mortgage accident and health insurance;
484 (viii) mortgage guaranty insurance; and
485 (ix) mortgage life insurance.
486 (38) "Credit life insurance" means insurance on the life of a debtor in connection with
487 an extension of credit that pays a person if the debtor dies.
488 (39) "Creditor" means a person, including an insured, having a claim, whether:
489 (a) matured;
490 (b) unmatured;
491 (c) liquidated;
492 (d) unliquidated;
493 (e) secured;
494 (f) unsecured;
495 (g) absolute;
496 (h) fixed; or
497 (i) contingent.
498 (40) "Credit property insurance" means insurance:
499 (a) offered in connection with an extension of credit; and
500 (b) that protects the property until the debt is paid.
501 (41) "Credit unemployment insurance" means insurance:
502 (a) offered in connection with an extension of credit; and
503 (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
504 (i) specific loan; or
505 (ii) credit transaction.
506 (42) (a) "Crop insurance" means insurance providing protection against damage to
507 crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation,
508 disease, or other yield-reducing conditions or perils that is:
509 (i) provided by the private insurance market; or
510 (ii) subsidized by the Federal Crop Insurance Corporation.
511 (b) "Crop insurance" includes multiperil crop insurance.
512 (43) (a) "Customer service representative" means a person that provides an insurance
513 service and insurance product information:
514 (i) for the customer service representative's:
515 (A) producer;
516 (B) surplus lines producer; or
517 (C) consultant employer; and
518 (ii) to the customer service representative's employer's:
519 (A) customer;
520 (B) client; or
521 (C) organization.
522 (b) A customer service representative may only operate within the scope of authority of
523 the customer service representative's producer, surplus lines producer, or consultant employer.
524 (44) "Deadline" means a final date or time:
525 (a) imposed by:
526 (i) statute;
527 (ii) rule; or
528 (iii) order; and
529 (b) by which a required filing or payment must be received by the department.
530 (45) "Deemer clause" means a provision under this title under which upon the
531 occurrence of a condition precedent, the commissioner is considered to have taken a specific
532 action. If the statute so provides, a condition precedent may be the commissioner's failure to
533 take a specific action.
534 (46) "Degree of relationship" means the number of steps between two persons
535 determined by counting the generations separating one person from a common ancestor and
536 then counting the generations to the other person.
537 (47) "Department" means the Insurance Department.
538 (48) "Director" means a member of the board of directors of a corporation.
539 (49) "Disability" means a physiological or psychological condition that partially or
540 totally limits an individual's ability to:
541 (a) perform the duties of:
542 (i) that individual's occupation; or
543 (ii) an occupation for which the individual is reasonably suited by education, training,
544 or experience; or
545 (b) perform two or more of the following basic activities of daily living:
546 (i) eating;
547 (ii) toileting;
548 (iii) transferring;
549 (iv) bathing; or
550 (v) dressing.
551 (50) "Disability income insurance" means the same as that term is defined in
552 Subsection (85).
553 (51) "Domestic insurer" means an insurer organized under the laws of this state.
554 (52) "Domiciliary state" means the state in which an insurer:
555 (a) is incorporated;
556 (b) is organized; or
557 (c) in the case of an alien insurer, enters into the United States.
558 (53) (a) "Eligible employee" means:
559 (i) an employee who:
560 (A) works on a full-time basis; and
561 (B) has a normal work week of 30 or more hours; or
562 (ii) a person described in Subsection (53)(b).
563 (b) "Eligible employee" includes:
564 (i) an owner who:
565 (A) works on a full-time basis; [
566 (B) has a normal work week of 30 or more hours; and
567 (C) employs at least one common employee; and
568 (ii) if the individual is included under a health benefit plan of a small employer:
569 (A) a sole proprietor;
570 (B) a partner in a partnership; or
571 (C) an independent contractor.
572 (c) "Eligible employee" does not include, unless eligible under Subsection (53)(b):
573 (i) an individual who works on a temporary or substitute basis for a small employer;
574 (ii) an employer's spouse who does not meet the requirements of Subsection (53)(a)(i);
575 or
576 (iii) a dependent of an employer who does not meet the requirements of Subsection
577 (53)(a)(i).
578 (54) "Employee" means:
579 (a) an individual employed by an employer; and
580 (b) an owner who meets the requirements of Subsection (53)(b)(i).
581 (55) "Employee benefits" means one or more benefits or services provided to:
582 (a) an employee; or
583 (b) a dependent of an employee.
584 (56) (a) "Employee welfare fund" means a fund:
585 (i) established or maintained, whether directly or through a trustee, by:
586 (A) one or more employers;
587 (B) one or more labor organizations; or
588 (C) a combination of employers and labor organizations; and
589 (ii) that provides employee benefits paid or contracted to be paid, other than income
590 from investments of the fund:
591 (A) by or on behalf of an employer doing business in this state; or
592 (B) for the benefit of a person employed in this state.
593 (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
594 revenues.
595 (57) "Endorsement" means a written agreement attached to a policy or certificate to
596 modify the policy or certificate coverage.
597 (58) (a) "Enrollee" means:
598 (i) a policyholder;
599 (ii) a certificate holder;
600 (iii) a subscriber; or
601 (iv) a covered individual:
602 (A) who has entered into a contract with an organization for health care; or
603 (B) on whose behalf an arrangement for health care has been made.
604 (b) "Enrollee" includes an insured.
605 (59) "Enrollment date," with respect to a health benefit plan, means:
606 (a) the first day of coverage; or
607 (b) if there is a waiting period, the first day of the waiting period.
608 (60) "Enterprise risk" means an activity, circumstance, event, or series of events
609 involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a
610 material adverse effect upon the financial condition or liquidity of the insurer or its insurance
611 holding company system as a whole, including anything that would cause:
612 (a) the insurer's risk-based capital to fall into an action or control level as set forth in
613 Sections 31A-17-601 through 31A-17-613; or
614 (b) the insurer to be in hazardous financial condition set forth in Section 31A-27a-101.
615 (61) (a) "Escrow" means:
616 (i) a transaction that effects the sale, transfer, encumbering, or leasing of real property,
617 when a person not a party to the transaction, and neither having nor acquiring an interest in the
618 title, performs, in accordance with the written instructions or terms of the written agreement
619 between the parties to the transaction, any of the following actions:
620 (A) the explanation, holding, or creation of a document; or
621 (B) the receipt, deposit, and disbursement of money;
622 (ii) a settlement or closing involving:
623 (A) a mobile home;
624 (B) a grazing right;
625 (C) a water right; or
626 (D) other personal property authorized by the commissioner.
627 (b) "Escrow" does not include:
628 (i) the following notarial acts performed by a notary within the state:
629 (A) an acknowledgment;
630 (B) a copy certification;
631 (C) jurat; and
632 (D) an oath or affirmation;
633 (ii) the receipt or delivery of a document; or
634 (iii) the receipt of money for delivery to the escrow agent.
635 (62) "Escrow agent" means an agency title insurance producer meeting the
636 requirements of Sections 31A-4-107, 31A-14-211, and 31A-23a-204, who is acting through an
637 individual title insurance producer licensed with an escrow subline of authority.
638 (63) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
639 excluded.
640 (b) The items listed in a list using the term "excludes" are representative examples for
641 use in interpretation of this title.
642 (64) "Exclusion" means for the purposes of accident and health insurance that an
643 insurer does not provide insurance coverage, for whatever reason, for one of the following:
644 (a) a specific physical condition;
645 (b) a specific medical procedure;
646 (c) a specific disease or disorder; or
647 (d) a specific prescription drug or class of prescription drugs.
648 (65) "Expense reimbursement insurance" means insurance:
649 (a) written to provide a payment for an expense relating to hospital confinement
650 resulting from illness or injury; and
651 (b) written:
652 (i) as a daily limit for a specific number of days in a hospital; and
653 (ii) to have a one or two day waiting period following a hospitalization.
654 (66) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
655 a position of public or private trust.
656 (67) (a) "Filed" means that a filing is:
657 (i) submitted to the department as required by and in accordance with applicable
658 statute, rule, or filing order;
659 (ii) received by the department within the time period provided in applicable statute,
660 rule, or filing order; and
661 (iii) accompanied by the appropriate fee in accordance with:
662 (A) Section 31A-3-103; or
663 (B) rule.
664 (b) "Filed" does not include a filing that is rejected by the department because it is not
665 submitted in accordance with Subsection (67)(a).
666 (68) "Filing," when used as a noun, means an item required to be filed with the
667 department including:
668 (a) a policy;
669 (b) a rate;
670 (c) a form;
671 (d) a document;
672 (e) a plan;
673 (f) a manual;
674 (g) an application;
675 (h) a report;
676 (i) a certificate;
677 (j) an endorsement;
678 (k) an actuarial certification;
679 (l) a licensee annual statement;
680 (m) a licensee renewal application;
681 (n) an advertisement;
682 (o) a binder; or
683 (p) an outline of coverage.
684 (69) "First party insurance" means an insurance policy or contract in which the insurer
685 agrees to pay a claim submitted to it by the insured for the insured's losses.
686 (70) "Foreign insurer" means an insurer domiciled outside of this state, including an
687 alien insurer.
688 (71) (a) "Form" means one of the following prepared for general use:
689 (i) a policy;
690 (ii) a certificate;
691 (iii) an application;
692 (iv) an outline of coverage; or
693 (v) an endorsement.
694 (b) "Form" does not include a document specially prepared for use in an individual
695 case.
696 (72) "Franchise insurance" means an individual insurance policy provided through a
697 mass marketing arrangement involving a defined class of persons related in some way other
698 than through the purchase of insurance.
699 (73) "General lines of authority" include:
700 (a) the general lines of insurance in Subsection (74);
701 (b) title insurance under one of the following sublines of authority:
702 (i) title examination, including authority to act as a title marketing representative;
703 (ii) escrow, including authority to act as a title marketing representative; and
704 (iii) title marketing representative only;
705 (c) surplus lines;
706 (d) workers' compensation; and
707 (e) another line of insurance that the commissioner considers necessary to recognize in
708 the public interest.
709 (74) "General lines of insurance" include:
710 (a) accident and health;
711 (b) casualty;
712 (c) life;
713 (d) personal lines;
714 (e) property; and
715 (f) variable contracts, including variable life and annuity.
716 (75) "Group health plan" means an employee welfare benefit plan to the extent that the
717 plan provides medical care:
718 (a) (i) to an employee; or
719 (ii) to a dependent of an employee; and
720 (b) (i) directly;
721 (ii) through insurance reimbursement; or
722 (iii) through another method.
723 (76) (a) "Group insurance policy" means a policy covering a group of persons that is
724 issued:
725 (i) to a policyholder on behalf of the group; and
726 (ii) for the benefit of a member of the group who is selected under a procedure defined
727 in:
728 (A) the policy; or
729 (B) an agreement that is collateral to the policy.
730 (b) A group insurance policy may include a member of the policyholder's family or a
731 dependent.
732 (77) "Group-wide supervisor" means the commissioner or other regulatory official
733 designated as the group-wide supervisor for an internationally active insurance group under
734 Section 31A-16-108.6.
735 (78) "Guaranteed automobile protection insurance" means insurance offered in
736 connection with an extension of credit that pays the difference in amount between the
737 insurance settlement and the balance of the loan if the insured automobile is a total loss.
738 (79) (a) "Health benefit plan" means, except as provided in Subsection (79)(b), a
739 policy, contract, certificate, or agreement offered or issued by a health carrier to provide,
740 deliver, arrange for, pay for, or reimburse any of the costs of health care.
741 (b) "Health benefit plan" does not include:
742 (i) coverage only for accident or disability income insurance, or any combination
743 thereof;
744 (ii) coverage issued as a supplement to liability insurance;
745 (iii) liability insurance, including general liability insurance and automobile liability
746 insurance;
747 (iv) workers' compensation or similar insurance;
748 (v) automobile medical payment insurance;
749 (vi) credit-only insurance;
750 (vii) coverage for on-site medical clinics;
751 (viii) other similar insurance coverage, specified in federal regulations issued pursuant
752 to Pub. L. No. 104-191, under which benefits for health care services are secondary or
753 incidental to other insurance benefits;
754 (ix) the following benefits if they are provided under a separate policy, certificate, or
755 contract of insurance or are otherwise not an integral part of the plan:
756 (A) limited scope dental or vision benefits;
757 (B) benefits for long-term care, nursing home care, home health care,
758 community-based care, or any combination thereof; or
759 (C) other similar limited benefits, specified in federal regulations issued pursuant to
760 Pub. L. No. 104-191;
761 (x) the following benefits if the benefits are provided under a separate policy,
762 certificate, or contract of insurance, there is no coordination between the provision of benefits
763 and any exclusion of benefits under any health plan, and the benefits are paid with respect to an
764 event without regard to whether benefits are provided under any health plan:
765 (A) coverage only for specified disease or illness; or
766 (B) hospital indemnity or other fixed indemnity insurance; [
767 (xi) the following if offered as a separate policy, certificate, or contract of insurance:
768 (A) Medicare supplemental health insurance as defined under the Social Security Act,
769 42 U.S.C. Sec. 1395ss(g)(1);
770 (B) coverage supplemental to the coverage provided under United States Code, Title
771 10, Chapter 55, Civilian Health and Medical Program of the Uniformed Services
772 (CHAMPUS); or
773 (C) similar supplemental coverage provided to coverage under a group health insurance
774 plan[
775 (xii) short-term, limited-duration insurance; and
776 (xiii) student health insurance, except as required under 45 C.F.R. Sec. 147.145.
777 (80) "Health care" means any of the following intended for use in the diagnosis,
778 treatment, mitigation, or prevention of a human ailment or impairment:
779 (a) a professional service;
780 (b) a personal service;
781 (c) a facility;
782 (d) equipment;
783 (e) a device;
784 (f) supplies; or
785 (g) medicine.
786 (81) (a) "Health care insurance" or "health insurance" means insurance providing:
787 (i) a health care benefit; or
788 (ii) payment of an incurred health care expense.
789 (b) "Health care insurance" or "health insurance" does not include accident and health
790 insurance providing a benefit for:
791 (i) replacement of income;
792 (ii) short-term accident;
793 (iii) fixed indemnity;
794 (iv) credit accident and health;
795 (v) supplements to liability;
796 (vi) workers' compensation;
797 (vii) automobile medical payment;
798 (viii) no-fault automobile;
799 (ix) equivalent self-insurance; or
800 (x) a type of accident and health insurance coverage that is a part of or attached to
801 another type of policy.
802 (82) "Health care provider" means the same as that term is defined in Section
803 78B-3-403.
804 (83) "Health insurance exchange" means an exchange as defined in 45 C.F.R. Sec.
805 155.20.
806 (84) "Health Insurance Portability and Accountability Act" means the Health Insurance
807 Portability and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936, as amended.
808 (85) "Income replacement insurance" or "disability income insurance" means insurance
809 written to provide payments to replace income lost from accident or sickness.
810 (86) "Indemnity" means the payment of an amount to offset all or part of an insured
811 loss.
812 (87) "Independent adjuster" means an insurance adjuster required to be licensed under
813 Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
814 (88) "Independently procured insurance" means insurance procured under Section
815 31A-15-104.
816 (89) "Individual" means a natural person.
817 (90) "Inland marine insurance" includes insurance covering:
818 (a) property in transit on or over land;
819 (b) property in transit over water by means other than boat or ship;
820 (c) bailee liability;
821 (d) fixed transportation property such as bridges, electric transmission systems, radio
822 and television transmission towers and tunnels; and
823 (e) personal and commercial property floaters.
824 (91) "Insolvency" or "insolvent" means that:
825 (a) an insurer is unable to pay the insurer's obligations as the obligations are due;
826 (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
827 RBC under Subsection 31A-17-601(8)(c); or
828 (c) an insurer's admitted assets are less than the insurer's liabilities.
829 (92) (a) "Insurance" means:
830 (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
831 persons to one or more other persons; or
832 (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
833 group of persons that includes the person seeking to distribute that person's risk.
834 (b) "Insurance" includes:
835 (i) a risk distributing arrangement providing for compensation or replacement for
836 damages or loss through the provision of a service or a benefit in kind;
837 (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
838 business and not as merely incidental to a business transaction; and
839 (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
840 but with a class of persons who have agreed to share the risk.
841 (93) "Insurance adjuster" means a person who directs or conducts the investigation,
842 negotiation, or settlement of a claim under an insurance policy other than life insurance or an
843 annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
844 (94) "Insurance business" or "business of insurance" includes:
845 (a) providing health care insurance by an organization that is or is required to be
846 licensed under this title;
847 (b) providing a benefit to an employee in the event of a contingency not within the
848 control of the employee, in which the employee is entitled to the benefit as a right, which
849 benefit may be provided either:
850 (i) by a single employer or by multiple employer groups; or
851 (ii) through one or more trusts, associations, or other entities;
852 (c) providing an annuity:
853 (i) including an annuity issued in return for a gift; and
854 (ii) except an annuity provided by a person specified in Subsections 31A-22-1305(2)
855 and (3);
856 (d) providing the characteristic services of a motor club as outlined in Subsection
857 (125);
858 (e) providing another person with insurance;
859 (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
860 or surety, a contract or policy of title insurance;
861 (g) transacting or proposing to transact any phase of title insurance, including:
862 (i) solicitation;
863 (ii) negotiation preliminary to execution;
864 (iii) execution of a contract of title insurance;
865 (iv) insuring; and
866 (v) transacting matters subsequent to the execution of the contract and arising out of
867 the contract, including reinsurance;
868 (h) transacting or proposing a life settlement; and
869 (i) doing, or proposing to do, any business in substance equivalent to Subsections
870 (94)(a) through (h) in a manner designed to evade this title.
871 (95) "Insurance consultant" or "consultant" means a person who:
872 (a) advises another person about insurance needs and coverages;
873 (b) is compensated by the person advised on a basis not directly related to the insurance
874 placed; and
875 (c) except as provided in Section 31A-23a-501, is not compensated directly or
876 indirectly by an insurer or producer for advice given.
877 (96) "Insurance group" means the persons that comprise an insurance holding company
878 system.
879 (97) "Insurance holding company system" means a group of two or more affiliated
880 persons, at least one of whom is an insurer.
881 (98) (a) "Insurance producer" or "producer" means a person licensed or required to be
882 licensed under the laws of this state to sell, solicit, or negotiate insurance.
883 (b) (i) "Producer for the insurer" means a producer who is compensated directly or
884 indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
885 insurer.
886 (ii) "Producer for the insurer" may be referred to as an "agent."
887 (c) (i) "Producer for the insured" means a producer who:
888 (A) is compensated directly and only by an insurance customer or an insured; and
889 (B) receives no compensation directly or indirectly from an insurer for selling,
890 soliciting, or negotiating an insurance product of that insurer to an insurance customer or
891 insured.
892 (ii) "Producer for the insured" may be referred to as a "broker."
893 (99) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
894 promise in an insurance policy and includes:
895 (i) a policyholder;
896 (ii) a subscriber;
897 (iii) a member; and
898 (iv) a beneficiary.
899 (b) The definition in Subsection (99)(a):
900 (i) applies only to this title;
901 (ii) does not define the meaning of "insured" as used in an insurance policy or
902 certificate; and
903 (iii) includes an enrollee.
904 (100) (a) "Insurer" means a person doing an insurance business as a principal
905 including:
906 (i) a fraternal benefit society;
907 (ii) an issuer of a gift annuity other than an annuity specified in Subsections
908 31A-22-1305(2) and (3);
909 (iii) a motor club;
910 (iv) an employee welfare plan;
911 (v) a person purporting or intending to do an insurance business as a principal on that
912 person's own account; and
913 (vi) a health maintenance organization.
914 (b) "Insurer" does not include a governmental entity.
915 (101) "Interinsurance exchange" means the same as that term is defined in Subsection
916 (160).
917 (102) "Internationally active insurance group" means an insurance holding company
918 system:
919 (a) that includes an insurer registered under Section 31A-16-105;
920 (b) that has premiums written in at least three countries;
921 (c) whose percentage of gross premiums written outside the United States is at least
922 10% of its total gross written premiums; and
923 (d) that, based on a three-year rolling average, has:
924 (i) total assets of at least $50,000,000,000; or
925 (ii) total gross written premiums of at least $10,000,000,000.
926 (103) "Involuntary unemployment insurance" means insurance:
927 (a) offered in connection with an extension of credit; and
928 (b) that provides indemnity if the debtor is involuntarily unemployed for payments
929 coming due on a:
930 (i) specific loan; or
931 (ii) credit transaction.
932 (104) (a) "Large employer," in connection with a health benefit plan, means an
933 employer who, with respect to a calendar year and to a plan year:
934 (i) employed an average of at least 51 employees on business days during the preceding
935 calendar year; and
936 (ii) employs at least one employee on the first day of the plan year.
937 (b) The number of employees shall be determined using the method set forth in 26
938 U.S.C. Sec. 4980H(c)(2).
939 (105) "Late enrollee," with respect to an employer health benefit plan, means an
940 individual whose enrollment is a late enrollment.
941 (106) "Late enrollment," with respect to an employer health benefit plan, means
942 enrollment of an individual other than:
943 (a) on the earliest date on which coverage can become effective for the individual
944 under the terms of the plan; or
945 (b) through special enrollment.
946 (107) (a) Except for a retainer contract or legal assistance described in Section
947 31A-1-103, "legal expense insurance" means insurance written to indemnify or pay for a
948 specified legal expense.
949 (b) "Legal expense insurance" includes an arrangement that creates a reasonable
950 expectation of an enforceable right.
951 (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
952 legal services incidental to other insurance coverage.
953 (108) (a) "Liability insurance" means insurance against liability:
954 (i) for death, injury, or disability of a human being, or for damage to property,
955 exclusive of the coverages under:
956 (A) medical malpractice insurance;
957 (B) professional liability insurance; and
958 (C) workers' compensation insurance;
959 (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
960 insured who is injured, irrespective of legal liability of the insured, when issued with or
961 supplemental to insurance against legal liability for the death, injury, or disability of a human
962 being, exclusive of the coverages under:
963 (A) medical malpractice insurance;
964 (B) professional liability insurance; and
965 (C) workers' compensation insurance;
966 (iii) for loss or damage to property resulting from an accident to or explosion of a
967 boiler, pipe, pressure container, machinery, or apparatus;
968 (iv) for loss or damage to property caused by:
969 (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
970 (B) water entering through a leak or opening in a building; or
971 (v) for other loss or damage properly the subject of insurance not within another kind
972 of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
973 (b) "Liability insurance" includes:
974 (i) vehicle liability insurance;
975 (ii) residential dwelling liability insurance; and
976 (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
977 boiler, machinery, or apparatus of any kind when done in connection with insurance on the
978 elevator, boiler, machinery, or apparatus.
979 (109) (a) "License" means authorization issued by the commissioner to engage in an
980 activity that is part of or related to the insurance business.
981 (b) "License" includes a certificate of authority issued to an insurer.
982 (110) (a) "Life insurance" means:
983 (i) insurance on a human life; and
984 (ii) insurance pertaining to or connected with human life.
985 (b) The business of life insurance includes:
986 (i) granting a death benefit;
987 (ii) granting an annuity benefit;
988 (iii) granting an endowment benefit;
989 (iv) granting an additional benefit in the event of death by accident;
990 (v) granting an additional benefit to safeguard the policy against lapse; and
991 (vi) providing an optional method of settlement of proceeds.
992 (111) "Limited license" means a license that:
993 (a) is issued for a specific product of insurance; and
994 (b) limits an individual or agency to transact only for that product or insurance.
995 (112) "Limited line credit insurance" includes the following forms of insurance:
996 (a) credit life;
997 (b) credit accident and health;
998 (c) credit property;
999 (d) credit unemployment;
1000 (e) involuntary unemployment;
1001 (f) mortgage life;
1002 (g) mortgage guaranty;
1003 (h) mortgage accident and health;
1004 (i) guaranteed automobile protection; and
1005 (j) another form of insurance offered in connection with an extension of credit that:
1006 (i) is limited to partially or wholly extinguishing the credit obligation; and
1007 (ii) the commissioner determines by rule should be designated as a form of limited line
1008 credit insurance.
1009 (113) "Limited line credit insurance producer" means a person who sells, solicits, or
1010 negotiates one or more forms of limited line credit insurance coverage to an individual through
1011 a master, corporate, group, or individual policy.
1012 (114) "Limited line insurance" includes:
1013 (a) bail bond;
1014 (b) limited line credit insurance;
1015 (c) legal expense insurance;
1016 (d) motor club insurance;
1017 (e) car rental related insurance;
1018 (f) travel insurance;
1019 (g) crop insurance;
1020 (h) self-service storage insurance;
1021 (i) guaranteed asset protection waiver;
1022 (j) portable electronics insurance; and
1023 (k) another form of limited insurance that the commissioner determines by rule should
1024 be designated a form of limited line insurance.
1025 (115) "Limited lines authority" includes the lines of insurance listed in Subsection
1026 (114).
1027 (116) "Limited lines producer" means a person who sells, solicits, or negotiates limited
1028 lines insurance.
1029 (117) (a) "Long-term care insurance" means an insurance policy or rider advertised,
1030 marketed, offered, or designated to provide coverage:
1031 (i) in a setting other than an acute care unit of a hospital;
1032 (ii) for not less than 12 consecutive months for a covered person on the basis of:
1033 (A) expenses incurred;
1034 (B) indemnity;
1035 (C) prepayment; or
1036 (D) another method;
1037 (iii) for one or more necessary or medically necessary services that are:
1038 (A) diagnostic;
1039 (B) preventative;
1040 (C) therapeutic;
1041 (D) rehabilitative;
1042 (E) maintenance; or
1043 (F) personal care; and
1044 (iv) that may be issued by:
1045 (A) an insurer;
1046 (B) a fraternal benefit society;
1047 (C) (I) a nonprofit health hospital; and
1048 (II) a medical service corporation;
1049 (D) a prepaid health plan;
1050 (E) a health maintenance organization; or
1051 (F) an entity similar to the entities described in Subsections (117)(a)(iv)(A) through (E)
1052 to the extent that the entity is otherwise authorized to issue life or health care insurance.
1053 (b) "Long-term care insurance" includes:
1054 (i) any of the following that provide directly or supplement long-term care insurance:
1055 (A) a group or individual annuity or rider; or
1056 (B) a life insurance policy or rider;
1057 (ii) a policy or rider that provides for payment of benefits on the basis of:
1058 (A) cognitive impairment; or
1059 (B) functional capacity; or
1060 (iii) a qualified long-term care insurance contract.
1061 (c) "Long-term care insurance" does not include:
1062 (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
1063 (ii) basic hospital expense coverage;
1064 (iii) basic medical/surgical expense coverage;
1065 (iv) hospital confinement indemnity coverage;
1066 (v) major medical expense coverage;
1067 (vi) income replacement or related asset-protection coverage;
1068 (vii) accident only coverage;
1069 (viii) coverage for a specified:
1070 (A) disease; or
1071 (B) accident;
1072 (ix) limited benefit health coverage; or
1073 (x) a life insurance policy that accelerates the death benefit to provide the option of a
1074 lump sum payment:
1075 (A) if the following are not conditioned on the receipt of long-term care:
1076 (I) benefits; or
1077 (II) eligibility; and
1078 (B) the coverage is for one or more the following qualifying events:
1079 (I) terminal illness;
1080 (II) medical conditions requiring extraordinary medical intervention; or
1081 (III) permanent institutional confinement.
1082 (118) "Managed care organization" means a person:
1083 (a) licensed as a health maintenance organization under Chapter 8, Health Maintenance
1084 Organizations and Limited Health Plans; or
1085 (b) (i) licensed under:
1086 (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1087 (B) Chapter 7, Nonprofit Health Service Insurance Corporations; or
1088 (C) Chapter 14, Foreign Insurers; and
1089 (ii) that requires an enrollee to use, or offers incentives, including financial incentives,
1090 for an enrollee to use, network providers.
1091 (119) "Medical malpractice insurance" means insurance against legal liability incident
1092 to the practice and provision of a medical service other than the practice and provision of a
1093 dental service.
1094 (120) "Member" means a person having membership rights in an insurance
1095 corporation.
1096 (121) "Minimum capital" or "minimum required capital" means the capital that must be
1097 constantly maintained by a stock insurance corporation as required by statute.
1098 (122) "Mortgage accident and health insurance" means insurance offered in connection
1099 with an extension of credit that provides indemnity for payments coming due on a mortgage
1100 while the debtor has a disability.
1101 (123) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
1102 or other creditor is indemnified against losses caused by the default of a debtor.
1103 (124) "Mortgage life insurance" means insurance on the life of a debtor in connection
1104 with an extension of credit that pays if the debtor dies.
1105 (125) "Motor club" means a person:
1106 (a) licensed under:
1107 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1108 (ii) Chapter 11, Motor Clubs; or
1109 (iii) Chapter 14, Foreign Insurers; and
1110 (b) that promises for an advance consideration to provide for a stated period of time
1111 one or more:
1112 (i) legal services under Subsection 31A-11-102(1)(b);
1113 (ii) bail services under Subsection 31A-11-102(1)(c); or
1114 (iii) (A) trip reimbursement;
1115 (B) towing services;
1116 (C) emergency road services;
1117 (D) stolen automobile services;
1118 (E) a combination of the services listed in Subsections (125)(b)(iii)(A) through (D); or
1119 (F) other services given in Subsections 31A-11-102(1)(b) through (f).
1120 (126) "Mutual" means a mutual insurance corporation.
1121 (127) "Network plan" means health care insurance:
1122 (a) that is issued by an insurer; and
1123 (b) under which the financing and delivery of medical care is provided, in whole or in
1124 part, through a defined set of providers under contract with the insurer, including the financing
1125 and delivery of an item paid for as medical care.
1126 (128) "Network provider" means a health care provider who has an agreement with a
1127 managed care organization to provide health care services to an enrollee with an expectation of
1128 receiving payment, other than coinsurance, copayments, or deductibles, directly from the
1129 managed care organization.
1130 (129) "Nonparticipating" means a plan of insurance under which the insured is not
1131 entitled to receive a dividend representing a share of the surplus of the insurer.
1132 (130) "Ocean marine insurance" means insurance against loss of or damage to:
1133 (a) ships or hulls of ships;
1134 (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
1135 securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
1136 interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
1137 (c) earnings such as freight, passage money, commissions, or profits derived from
1138 transporting goods or people upon or across the oceans or inland waterways; or
1139 (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
1140 owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
1141 in connection with maritime activity.
1142 (131) "Order" means an order of the commissioner.
1143 (132) "ORSA guidance manual" means the current version of the Own Risk and
1144 Solvency Assessment Guidance Manual developed and adopted by the National Association of
1145 Insurance Commissioners and as amended from time to time.
1146 (133) "ORSA summary report" means a confidential high-level summary of an insurer
1147 or insurance group's own risk and solvency assessment.
1148 (134) "Outline of coverage" means a summary that explains an accident and health
1149 insurance policy.
1150 (135) "Own risk and solvency assessment" means an insurer or insurance group's
1151 confidential internal assessment:
1152 (a) (i) of each material and relevant risk associated with the insurer or insurance group;
1153 (ii) of the insurer or insurance group's current business plan to support each risk
1154 described in Subsection (135)(a)(i); and
1155 (iii) of the sufficiency of capital resources to support each risk described in Subsection
1156 (135)(a)(i); and
1157 (b) that is appropriate to the nature, scale, and complexity of an insurer or insurance
1158 group.
1159 (136) "Participating" means a plan of insurance under which the insured is entitled to
1160 receive a dividend representing a share of the surplus of the insurer.
1161 (137) "Participation," as used in a health benefit plan, means a requirement relating to
1162 the minimum percentage of eligible employees that must be enrolled in relation to the total
1163 number of eligible employees of an employer reduced by each eligible employee who
1164 voluntarily declines coverage under the plan because the employee:
1165 (a) has other group health care insurance coverage; or
1166 (b) receives:
1167 (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
1168 Security Amendments of 1965; or
1169 (ii) another government health benefit.
1170 (138) "Person" includes:
1171 (a) an individual;
1172 (b) a partnership;
1173 (c) a corporation;
1174 (d) an incorporated or unincorporated association;
1175 (e) a joint stock company;
1176 (f) a trust;
1177 (g) a limited liability company;
1178 (h) a reciprocal;
1179 (i) a syndicate; or
1180 (j) another similar entity or combination of entities acting in concert.
1181 (139) "Personal lines insurance" means property and casualty insurance coverage sold
1182 for primarily noncommercial purposes to:
1183 (a) an individual; or
1184 (b) a family.
1185 (140) "Plan sponsor" means the same as that term is defined in 29 U.S.C. Sec.
1186 1002(16)(B).
1187 (141) "Plan year" means:
1188 (a) the year that is designated as the plan year in:
1189 (i) the plan document of a group health plan; or
1190 (ii) a summary plan description of a group health plan;
1191 (b) if the plan document or summary plan description does not designate a plan year or
1192 there is no plan document or summary plan description:
1193 (i) the year used to determine deductibles or limits;
1194 (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
1195 or
1196 (iii) the employer's taxable year if:
1197 (A) the plan does not impose deductibles or limits on a yearly basis; and
1198 (B) (I) the plan is not insured; or
1199 (II) the insurance policy is not renewed on an annual basis; or
1200 (c) in a case not described in Subsection (141)(a) or (b), the calendar year.
1201 (142) (a) "Policy" means a document, including an attached endorsement or application
1202 that:
1203 (i) purports to be an enforceable contract; and
1204 (ii) memorializes in writing some or all of the terms of an insurance contract.
1205 (b) "Policy" includes a service contract issued by:
1206 (i) a motor club under Chapter 11, Motor Clubs;
1207 (ii) a service contract provided under Chapter 6a, Service Contracts; and
1208 (iii) a corporation licensed under:
1209 (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
1210 (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
1211 (c) "Policy" does not include:
1212 (i) a certificate under a group insurance contract; or
1213 (ii) a document that does not purport to have legal effect.
1214 (143) "Policyholder" means a person who controls a policy, binder, or oral contract by
1215 ownership, premium payment, or otherwise.
1216 (144) "Policy illustration" means a presentation or depiction that includes
1217 nonguaranteed elements of a policy of life insurance over a period of years.
1218 (145) "Policy summary" means a synopsis describing the elements of a life insurance
1219 policy.
1220 (146) "PPACA" means the Patient Protection and Affordable Care Act, Pub. L. No.
1221 111-148 and the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and
1222 related federal regulations and guidance.
1223 (147) "Preexisting condition," with respect to health care insurance:
1224 (a) means a condition that was present before the effective date of coverage, whether or
1225 not medical advice, diagnosis, care, or treatment was recommended or received before that day;
1226 and
1227 (b) does not include a condition indicated by genetic information unless an actual
1228 diagnosis of the condition by a physician has been made.
1229 (148) (a) "Premium" means the monetary consideration for an insurance policy.
1230 (b) "Premium" includes, however designated:
1231 (i) an assessment;
1232 (ii) a membership fee;
1233 (iii) a required contribution; or
1234 (iv) monetary consideration.
1235 (c) (i) "Premium" does not include consideration paid to a third party administrator for
1236 the third party administrator's services.
1237 (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
1238 insurance on the risks administered by the third party administrator.
1239 (149) "Principal officers" for a corporation means the officers designated under
1240 Subsection 31A-5-203(3).
1241 (150) "Proceeding" includes an action or special statutory proceeding.
1242 (151) "Professional liability insurance" means insurance against legal liability incident
1243 to the practice of a profession and provision of a professional service.
1244 (152) (a) Except as provided in Subsection (152)(b), "property insurance" means
1245 insurance against loss or damage to real or personal property of every kind and any interest in
1246 that property:
1247 (i) from all hazards or causes; and
1248 (ii) against loss consequential upon the loss or damage including vehicle
1249 comprehensive and vehicle physical damage coverages.
1250 (b) "Property insurance" does not include:
1251 (i) inland marine insurance; and
1252 (ii) ocean marine insurance.
1253 (153) "Qualified long-term care insurance contract" or "federally tax qualified
1254 long-term care insurance contract" means:
1255 (a) an individual or group insurance contract that meets the requirements of Section
1256 7702B(b), Internal Revenue Code; or
1257 (b) the portion of a life insurance contract that provides long-term care insurance:
1258 (i) (A) by rider; or
1259 (B) as a part of the contract; and
1260 (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
1261 Code.
1262 (154) "Qualified United States financial institution" means an institution that:
1263 (a) is:
1264 (i) organized under the laws of the United States or any state; or
1265 (ii) in the case of a United States office of a foreign banking organization, licensed
1266 under the laws of the United States or any state;
1267 (b) is regulated, supervised, and examined by a United States federal or state authority
1268 having regulatory authority over a bank or trust company; and
1269 (c) meets the standards of financial condition and standing that are considered
1270 necessary and appropriate to regulate the quality of a financial institution whose letters of credit
1271 will be acceptable to the commissioner as determined by:
1272 (i) the commissioner by rule; or
1273 (ii) the Securities Valuation Office of the National Association of Insurance
1274 Commissioners.
1275 (155) (a) "Rate" means:
1276 (i) the cost of a given unit of insurance; or
1277 (ii) for property or casualty insurance, that cost of insurance per exposure unit either
1278 expressed as:
1279 (A) a single number; or
1280 (B) a pure premium rate, adjusted before the application of individual risk variations
1281 based on loss or expense considerations to account for the treatment of:
1282 (I) expenses;
1283 (II) profit; and
1284 (III) individual insurer variation in loss experience.
1285 (b) "Rate" does not include a minimum premium.
1286 (156) (a) Except as provided in Subsection (156)(b), "rate service organization" means
1287 a person who assists an insurer in rate making or filing by:
1288 (i) collecting, compiling, and furnishing loss or expense statistics;
1289 (ii) recommending, making, or filing rates or supplementary rate information; or
1290 (iii) advising about rate questions, except as an attorney giving legal advice.
1291 (b) "Rate service organization" does not mean:
1292 (i) an employee of an insurer;
1293 (ii) a single insurer or group of insurers under common control;
1294 (iii) a joint underwriting group; or
1295 (iv) an individual serving as an actuarial or legal consultant.
1296 (157) "Rating manual" means any of the following used to determine initial and
1297 renewal policy premiums:
1298 (a) a manual of rates;
1299 (b) a classification;
1300 (c) a rate-related underwriting rule; and
1301 (d) a rating formula that describes steps, policies, and procedures for determining
1302 initial and renewal policy premiums.
1303 (158) (a) "Rebate" means a licensee paying, allowing, giving, or offering to pay, allow,
1304 or give, directly or indirectly:
1305 (i) a refund of premium or portion of premium;
1306 (ii) a refund of commission or portion of commission;
1307 (iii) a refund of all or a portion of a consultant fee; or
1308 (iv) providing services or other benefits not specified in an insurance or annuity
1309 contract.
1310 (b) "Rebate" does not include:
1311 (i) a refund due to termination or changes in coverage;
1312 (ii) a refund due to overcharges made in error by the licensee; or
1313 (iii) savings or wellness benefits as provided in the contract by the licensee.
1314 (159) "Received by the department" means:
1315 (a) the date delivered to and stamped received by the department, if delivered in
1316 person;
1317 (b) the post mark date, if delivered by mail;
1318 (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
1319 (d) the received date recorded on an item delivered, if delivered by:
1320 (i) facsimile;
1321 (ii) email; or
1322 (iii) another electronic method; or
1323 (e) a date specified in:
1324 (i) a statute;
1325 (ii) a rule; or
1326 (iii) an order.
1327 (160) "Reciprocal" or "interinsurance exchange" means an unincorporated association
1328 of persons:
1329 (a) operating through an attorney-in-fact common to all of the persons; and
1330 (b) exchanging insurance contracts with one another that provide insurance coverage
1331 on each other.
1332 (161) "Reinsurance" means an insurance transaction where an insurer, for
1333 consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
1334 reinsurance transactions, this title sometimes refers to:
1335 (a) the insurer transferring the risk as the "ceding insurer"; and
1336 (b) the insurer assuming the risk as the:
1337 (i) "assuming insurer"; or
1338 (ii) "assuming reinsurer."
1339 (162) "Reinsurer" means a person licensed in this state as an insurer with the authority
1340 to assume reinsurance.
1341 (163) "Residential dwelling liability insurance" means insurance against liability
1342 resulting from or incident to the ownership, maintenance, or use of a residential dwelling that is
1343 a detached single family residence or multifamily residence up to four units.
1344 (164) (a) "Retrocession" means reinsurance with another insurer of a liability assumed
1345 under a reinsurance contract.
1346 (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
1347 liability assumed under a reinsurance contract.
1348 (165) "Rider" means an endorsement to:
1349 (a) an insurance policy; or
1350 (b) an insurance certificate.
1351 (166) "Secondary medical condition" means a complication related to an exclusion
1352 from coverage in accident and health insurance.
1353 (167) (a) "Security" means a:
1354 (i) note;
1355 (ii) stock;
1356 (iii) bond;
1357 (iv) debenture;
1358 (v) evidence of indebtedness;
1359 (vi) certificate of interest or participation in a profit-sharing agreement;
1360 (vii) collateral-trust certificate;
1361 (viii) preorganization certificate or subscription;
1362 (ix) transferable share;
1363 (x) investment contract;
1364 (xi) voting trust certificate;
1365 (xii) certificate of deposit for a security;
1366 (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
1367 payments out of production under such a title or lease;
1368 (xiv) commodity contract or commodity option;
1369 (xv) certificate of interest or participation in, temporary or interim certificate for,
1370 receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
1371 in Subsections (167)(a)(i) through (xiv); or
1372 (xvi) another interest or instrument commonly known as a security.
1373 (b) "Security" does not include:
1374 (i) any of the following under which an insurance company promises to pay money in a
1375 specific lump sum or periodically for life or some other specified period:
1376 (A) insurance;
1377 (B) an endowment policy; or
1378 (C) an annuity contract; or
1379 (ii) a burial certificate or burial contract.
1380 (168) "Securityholder" means a specified person who owns a security of a person,
1381 including:
1382 (a) common stock;
1383 (b) preferred stock;
1384 (c) debt obligations; and
1385 (d) any other security convertible into or evidencing the right of any of the items listed
1386 in this Subsection (168).
1387 (169) (a) "Self-insurance" means an arrangement under which a person provides for
1388 spreading its own risks by a systematic plan.
1389 (b) Except as provided in this Subsection (169), "self-insurance" does not include an
1390 arrangement under which a number of persons spread their risks among themselves.
1391 (c) "Self-insurance" includes:
1392 (i) an arrangement by which a governmental entity undertakes to indemnify an
1393 employee for liability arising out of the employee's employment; and
1394 (ii) an arrangement by which a person with a managed program of self-insurance and
1395 risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
1396 employees for liability or risk that is related to the relationship or employment.
1397 (d) "Self-insurance" does not include an arrangement with an independent contractor.
1398 (170) "Sell" means to exchange a contract of insurance:
1399 (a) by any means;
1400 (b) for money or its equivalent; and
1401 (c) on behalf of an insurance company.
1402 (171) "Short-term care insurance" means an insurance policy or rider advertised,
1403 marketed, offered, or designed to provide coverage that is similar to long-term care insurance,
1404 but that provides coverage for less than 12 consecutive months for each covered person.
1405 (172) "Short-term, limited-duration [
1406 that:
1407 (a) after taking into account any renewals or extensions, has a total duration of no more
1408 than 36 months; and
1409 (b) has an expiration date specified in the contract that is less than 12 months after the
1410 original effective date of coverage under the health benefit product.
1411 (173) "Significant break in coverage" means a period of 63 consecutive days during
1412 each of which an individual does not have creditable coverage.
1413 (174) (a) "Small employer" means, in connection with a health benefit plan and with
1414 respect to a calendar year and to a plan year, an employer who:
1415 (i) (A) employed at least one but not more than 50 eligible employees on business days
1416 during the preceding calendar year; or
1417 (B) if the employer did not exist for the entirety of the preceding calendar year,
1418 reasonably expects to employ an average of at least one but not more than 50 eligible
1419 employees on business days during the current calendar year;
1420 (ii) employs at least one employee on the first day of the plan year; and
1421 (iii) for an employer who has common ownership with one or more other employers, is
1422 treated as a single employer under 26 U.S.C. Sec. 414(b), (c), (m), or (o).
1423 (b) "Small employer" does not include a sole proprietor that does not employ at least
1424 one employee.
1425 (175) "Special enrollment period," in connection with a health benefit plan, has the
1426 same meaning as provided in federal regulations adopted pursuant to the Health Insurance
1427 Portability and Accountability Act.
1428 (176) (a) "Subsidiary" of a person means an affiliate controlled by that person either
1429 directly or indirectly through one or more affiliates or intermediaries.
1430 (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1431 shares are owned by that person either alone or with its affiliates, except for the minimum
1432 number of shares the law of the subsidiary's domicile requires to be owned by directors or
1433 others.
1434 (177) Subject to Subsection (91)(b), "surety insurance" includes:
1435 (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
1436 perform the principal's obligations to a creditor or other obligee;
1437 (b) bail bond insurance; and
1438 (c) fidelity insurance.
1439 (178) (a) "Surplus" means the excess of assets over the sum of paid-in capital and
1440 liabilities.
1441 (b) (i) "Permanent surplus" means the surplus of an insurer or organization that is
1442 designated by the insurer or organization as permanent.
1443 (ii) Sections 31A-5-211, 31A-7-201, 31A-8-209, 31A-9-209, and 31A-14-205 require
1444 that insurers or organizations doing business in this state maintain specified minimum levels of
1445 permanent surplus.
1446 (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
1447 same as the minimum required capital requirement that applies to stock insurers.
1448 (c) "Excess surplus" means:
1449 (i) for a life insurer, accident and health insurer, health organization, or property and
1450 casualty insurer as defined in Section 31A-17-601, the lesser of:
1451 (A) that amount of an insurer's or health organization's total adjusted capital that
1452 exceeds the product of:
1453 (I) 2.5; and
1454 (II) the sum of the insurer's or health organization's minimum capital or permanent
1455 surplus required under Section 31A-5-211, 31A-9-209, or 31A-14-205; or
1456 (B) that amount of an insurer's or health organization's total adjusted capital that
1457 exceeds the product of:
1458 (I) 3.0; and
1459 (II) the authorized control level RBC as defined in Subsection 31A-17-601(8)(a); and
1460 (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
1461 that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1462 (A) 1.5; and
1463 (B) the insurer's total adjusted capital required by Subsection 31A-17-609(1).
1464 (179) "Third party administrator" or "administrator" means a person who collects
1465 charges or premiums from, or who, for consideration, adjusts or settles claims of residents of
1466 the state in connection with insurance coverage, annuities, or service insurance coverage,
1467 except:
1468 (a) a union on behalf of its members;
1469 (b) a person administering a:
1470 (i) pension plan subject to the federal Employee Retirement Income Security Act of
1471 1974;
1472 (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1473 (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1474 (c) an employer on behalf of the employer's employees or the employees of one or
1475 more of the subsidiary or affiliated corporations of the employer;
1476 (d) an insurer licensed under the following, but only for a line of insurance for which
1477 the insurer holds a license in this state:
1478 (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1479 (ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
1480 (iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1481 (iv) Chapter 9, Insurance Fraternals; or
1482 (v) Chapter 14, Foreign Insurers;
1483 (e) a person:
1484 (i) licensed or exempt from licensing under:
1485 (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1486 Reinsurance Intermediaries; or
1487 (B) Chapter 26, Insurance Adjusters; and
1488 (ii) whose activities are limited to those authorized under the license the person holds
1489 or for which the person is exempt; or
1490 (f) an institution, bank, or financial institution:
1491 (i) that is:
1492 (A) an institution whose deposits and accounts are to any extent insured by a federal
1493 deposit insurance agency, including the Federal Deposit Insurance Corporation or National
1494 Credit Union Administration; or
1495 (B) a bank or other financial institution that is subject to supervision or examination by
1496 a federal or state banking authority; and
1497 (ii) that does not adjust claims without a third party administrator license.
1498 (180) "Title insurance" means the insuring, guaranteeing, or indemnifying of an owner
1499 of real or personal property or the holder of liens or encumbrances on that property, or others
1500 interested in the property against loss or damage suffered by reason of liens or encumbrances
1501 upon, defects in, or the unmarketability of the title to the property, or invalidity or
1502 unenforceability of any liens or encumbrances on the property.
1503 (181) "Total adjusted capital" means the sum of an insurer's or health organization's
1504 statutory capital and surplus as determined in accordance with:
1505 (a) the statutory accounting applicable to the annual financial statements required to be
1506 filed under Section 31A-4-113; and
1507 (b) another item provided by the RBC instructions, as RBC instructions is defined in
1508 Section 31A-17-601.
1509 (182) (a) "Trustee" means "director" when referring to the board of directors of a
1510 corporation.
1511 (b) "Trustee," when used in reference to an employee welfare fund, means an
1512 individual, firm, association, organization, joint stock company, or corporation, whether acting
1513 individually or jointly and whether designated by that name or any other, that is charged with
1514 or has the overall management of an employee welfare fund.
1515 (183) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer"
1516 means an insurer:
1517 (i) not holding a valid certificate of authority to do an insurance business in this state;
1518 or
1519 (ii) transacting business not authorized by a valid certificate.
1520 (b) "Admitted insurer" or "authorized insurer" means an insurer:
1521 (i) holding a valid certificate of authority to do an insurance business in this state; and
1522 (ii) transacting business as authorized by a valid certificate.
1523 (184) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
1524 (185) "Vehicle liability insurance" means insurance against liability resulting from or
1525 incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a vehicle
1526 comprehensive or vehicle physical damage coverage under Subsection (152).
1527 (186) "Voting security" means a security with voting rights, and includes a security
1528 convertible into a security with a voting right associated with the security.
1529 (187) "Waiting period" for a health benefit plan means the period that must pass before
1530 coverage for an individual, who is otherwise eligible to enroll under the terms of the health
1531 benefit plan, can become effective.
1532 (188) "Workers' compensation insurance" means:
1533 (a) insurance for indemnification of an employer against liability for compensation
1534 based on:
1535 (i) a compensable accidental injury; and
1536 (ii) occupational disease disability;
1537 (b) employer's liability insurance incidental to workers' compensation insurance and
1538 written in connection with workers' compensation insurance; and
1539 (c) insurance assuring to a person entitled to workers' compensation benefits the
1540 compensation provided by law.
1541 Section 3. Section 31A-2-104 is amended to read:
1542 31A-2-104. Other employees -- Insurance fraud investigators.
1543 (1) The department shall employ [
1544 technical, and clerical employees as necessary to carry out the duties of the department.
1545 (2) An insurance fraud investigator employed [
1546 Subsection (1) may as [
1547 (a) be designated a law enforcement officer, as defined in Section 53-13-103; and
1548 (b) be eligible for retirement benefits under the Public Safety Employee's Retirement
1549 System.
1550 Section 4. Section 31A-2-110 is amended to read:
1551 31A-2-110. Official seal and signature.
1552 (1) (a) Any statutory or common-law requirement that an official seal be affixed is
1553 satisfied by the signature of the commissioner.
1554 (b) However, the commissioner may adopt and use a seal bearing the words
1555 "Commissioner of Insurance for Utah," an impression of which shall be filed with the Division
1556 of Archives.
1557 (2) Any signature of the commissioner may be in [
1558 exact copy of the signature, unless specifically required to be handwritten.
1559 Section 5. Section 31A-2-212 is amended to read:
1560 31A-2-212. Miscellaneous duties.
1561 (1) Upon issuance of an order limiting, suspending, or revoking a person's authority to
1562 do business in Utah, and when the commissioner begins a proceeding against an insurer under
1563 Chapter 27a, Insurer Receivership Act, the commissioner:
1564 (a) shall notify by mail the producers of the person or insurer of whom the
1565 commissioner has record; and
1566 (b) may publish notice of the order or proceeding in any manner the commissioner
1567 considers necessary to protect the rights of the public.
1568 (2) (a) When required for evidence in a legal proceeding, the commissioner shall
1569 furnish a certificate of authority of a licensee to transact the business of insurance in Utah on
1570 any particular date.
1571 (b) The court or other officer shall receive [
1572 this Subsection (2) in lieu of the commissioner's testimony.
1573 (3) (a) On the request of an insurer authorized to do a surety business, the
1574 commissioner shall furnish a copy of the insurer's certificate of authority to a designated public
1575 officer in this state who requires that certificate of authority before accepting a bond.
1576 (b) The public officer described in Subsection (3)(a) shall file the certificate of
1577 authority furnished under Subsection (3)(a).
1578 (c) After a certified copy of a certificate of authority is furnished to a public officer, it
1579 is not necessary, while the certificate of authority remains effective, to attach a copy of it to any
1580 instrument of suretyship filed with that public officer.
1581 (d) Whenever the commissioner revokes the certificate of authority or begins a
1582 proceeding under Chapter 27a, Insurer Receivership Act, against an insurer authorized to do a
1583 surety business, the commissioner shall immediately give notice of that action to each public
1584 officer who is sent a certified copy under this Subsection (3).
1585 (4) (a) The commissioner shall immediately notify every judge and clerk of the courts
1586 of record in the state when:
1587 (i) an authorized insurer doing a surety business:
1588 (A) files a petition for receivership; or
1589 (B) is in receivership; or
1590 (ii) the commissioner has reason to believe that the authorized insurer doing surety
1591 business:
1592 (A) is in financial difficulty; or
1593 (B) has unreasonably failed to carry out any of [
1594 (b) Upon the receipt of the notice required by this Subsection (4), it is the duty of the
1595 judges and clerks to notify and require a person that files with the court a bond on which the
1596 authorized insurer doing surety business is surety to immediately file a new bond with a new
1597 surety.
1598 [
1599
1600 [
1601 offers health insurance coverage in this state to comply with PPACA and administrative rules
1602 adopted by the commissioner related to regulation of health benefit plans, including:
1603 (i) lifetime and annual limits;
1604 (ii) prohibition of rescissions;
1605 (iii) coverage of preventive health services;
1606 (iv) coverage for a child or dependent;
1607 (v) pre-existing condition limitations;
1608 (vi) insurer transparency of consumer information including plan disclosures, uniform
1609 coverage documents, and standard definitions;
1610 (vii) premium rate reviews;
1611 (viii) essential health benefits;
1612 (ix) provider choice;
1613 (x) waiting periods;
1614 (xi) appeals processes;
1615 (xii) rating restrictions;
1616 (xiii) uniform applications and notice provisions;
1617 (xiv) certification and regulation of qualified health plans; and
1618 (xv) network adequacy standards.
1619 [
1620 (i) the health insurance market in the state;
1621 (ii) qualified health plans offered in the state; and
1622 (iii) the conduct of navigators, producers, and in-person assisters operating in the state.
1623 [
1624
1625
1626 [
1627
1628 [
1629
1630
1631 Section 6. Section 31A-2-218 is amended to read:
1632 31A-2-218. Strategic plan for health system reform.
1633 The commissioner and the department shall:
1634 [
1635
1636
1637
1638 [
1639
1640 [
1641 premium payments made for a single policy by multiple payers, including the policyholder, one
1642 or more employers of one or more individuals covered by the policy, government programs,
1643 and others by educating employers and insurers about collection services available through
1644 private vendors, including financial institutions;
1645 [
1646 (a) encourage health care providers to follow best practice protocols;
1647 (b) incorporate other health care quality improvement mechanisms; and
1648 (c) incorporate rewards and incentives for healthy lifestyles and behaviors as permitted
1649 by the Health Insurance Portability and Accountability Act;
1650 [
1651 31A-2-216, as necessary, to accomplish the requirements of this section; and
1652 [
1653 Act, make rules, as necessary, to implement Subsections (1) and (2)[
1654 Section 7. Section 31A-2-309 is amended to read:
1655 31A-2-309. Service of process through state officer.
1656 (1) The commissioner, or the lieutenant governor when the subject proceeding is
1657 brought by the state, is the agent for receipt of service of a summons, notice, order, pleading, or
1658 other legal process relating to a Utah court or administrative agency upon the following:
1659 (a) an insurer authorized to do business in this state, while authorized to do business in
1660 this state, and thereafter in a proceeding arising from or related to a transaction having a
1661 connection with this state;
1662 (b) a surplus lines insurer for a proceeding arising out of a contract of insurance that is
1663 subject to the surplus lines law, or out of a certificate, cover note, or other confirmation of that
1664 type of insurance;
1665 (c) an unauthorized insurer or other person assisting an unauthorized insurer under
1666 Subsection 31A-15-102(1) by doing an act specified in Subsection 31A-15-102(2), for a
1667 proceeding arising out of a transaction that is subject to the unauthorized insurance law;
1668 (d) a nonresident producer, consultant, adjuster, or third party administrator, while
1669 authorized to do business in this state, and thereafter in a proceeding arising from or related to
1670 a transaction having a connection with this state; and
1671 (e) a reinsurer submitting to the commissioner's jurisdiction under Subsection
1672 31A-17-404[
1673 (2) The following is considered to have irrevocably appointed the commissioner and
1674 lieutenant governor as that person's agents in accordance with Subsection (1):
1675 (a) a licensed insurer by applying for and receiving a certificate of authority;
1676 (b) a surplus lines insurer by entering into a contract subject to the surplus lines law;
1677 (c) an unauthorized insurer by doing in this state an act prohibited by Section
1678 31A-15-103; and
1679 (d) a nonresident producer, consultant, adjuster, and third party administrator.
1680 (3) The commissioner and lieutenant governor are also agents for an executor,
1681 administrator, personal representative, receiver, trustee, or other successor in interest of a
1682 person specified under Subsection (1).
1683 (4) A litigant serving process on the commissioner or lieutenant governor under this
1684 section shall pay the fee applicable under Section 31A-3-103.
1685 (5) The right to substituted service under this section does not limit the right to serve a
1686 summons, notice, order, pleading, demand, or other process upon a person in another manner
1687 provided by law.
1688 Section 8. Section 31A-2-403 is amended to read:
1689 31A-2-403. Title and Escrow Commission created.
1690 (1) (a) Subject to Subsection (1)(b), there is created within the department the Title and
1691 Escrow Commission that is comprised of five members appointed by the governor with the
1692 consent of the Senate as follows:
1693 (i) except as provided in Subsection [
1694 a title insurer;
1695 (ii) two members shall:
1696 (A) be employees of a Utah agency title insurance producer;
1697 (B) be or have been licensed under the title insurance line of authority;
1698 (C) as of the day on which the member is appointed, be or have been licensed with the
1699 title examination or escrow subline of authority for at least five years; and
1700 (D) as of the day on which the member is appointed, not be from the same county as
1701 another member appointed under this Subsection (1)(a)(ii); and
1702 (iii) one member shall be a member of the general public from any county in the state.
1703 (b) No more than one commission member may be appointed from a single company
1704 or an affiliate or subsidiary of the company.
1705 (c) No more than two commission members may be employees of an entity operating
1706 under an affiliated business arrangement, as defined in Section 31A-23a-1001.
1707 [
1708 employee of a title insurer and willing to serve as a member of the commission, the
1709 commission shall include the following members in lieu of the members described in
1710 Subsection (1)(a)(i):
1711 (i) one member who is an employee of a title insurer; and
1712 (ii) one member who is an employee of a Utah agency title insurance producer.
1713 (2) (a) Subject to Subsection (2)(c), a commission member shall file with the
1714 commissioner a disclosure of any position of employment or ownership interest that the
1715 commission member has with respect to a person that is subject to the jurisdiction of the
1716 commissioner.
1717 (b) The disclosure statement required by this Subsection (2) shall be:
1718 (i) filed by no later than the day on which the person begins that person's appointment;
1719 and
1720 (ii) amended when a significant change occurs in any matter required to be disclosed
1721 under this Subsection (2).
1722 (c) A commission member is not required to disclose an ownership interest that the
1723 commission member has if the ownership interest is in a publicly traded company or held as
1724 part of a mutual fund, trust, or similar investment.
1725 (3) (a) Except as required by Subsection (3)(b), as terms of current commission
1726 members expire, the governor shall appoint each new commission member to a four-year term
1727 ending on June 30.
1728 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1729 time of appointment, adjust the length of terms to ensure that the terms of the commission
1730 members are staggered so that approximately half of the members appointed under Subsection
1731 (1)(a)(i) and half of the members appointed under Subsection (1)(a)(ii) are appointed every two
1732 years.
1733 (c) A commission member may not serve more than one consecutive term.
1734 (d) When a vacancy occurs in the membership for any reason, the governor, with the
1735 consent of the Senate, shall appoint a replacement for the unexpired term.
1736 (e) Notwithstanding the other provisions of this Subsection (3), a commission member
1737 serves until a successor is appointed by the governor with the consent of the Senate.
1738 (4) A commission member may not receive compensation or benefits for the
1739 commission member's service, but may receive per diem and travel expenses in accordance
1740 with:
1741 (a) Section 63A-3-106;
1742 (b) Section 63A-3-107; and
1743 (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
1744 63A-3-107.
1745 (5) Members of the commission shall annually select one commission member to serve
1746 as chair.
1747 (6) (a) (i) Except as provided in Subsection (6)(b), the commission shall meet at least
1748 monthly.
1749 (ii) (A) The commissioner shall, with the concurrence of the chair of the commission,
1750 designate at least one monthly meeting per quarter as an in-person meeting.
1751 (B) Notwithstanding Section 52-4-207, a commission member shall physically attend a
1752 meeting designated as an in-person meeting under Subsection (6)(a)(ii)(A) and may not attend
1753 through electronic means. A commission member may attend any other commission meeting,
1754 subcommittee meeting, or emergency meeting by electronic means in accordance with Section
1755 52-4-207.
1756 (b) (i) Except as provided in Subsection (6)(b)(ii), the commissioner may, with the
1757 concurrence of the chair of the commission, cancel a monthly meeting of the commission if,
1758 due to the number or nature of pending title insurance matters, the monthly meeting is not
1759 necessary.
1760 (ii) The commissioner may not cancel a monthly meeting designated as an in-person
1761 meeting under Subsection (6)(a)(ii)(A).
1762 (c) The commissioner may call additional meetings:
1763 (i) at the commissioner's discretion;
1764 (ii) upon the request of the chair of the commission; or
1765 (iii) upon the written request of three or more commission members.
1766 (d) (i) Three commission members constitute a quorum for the transaction of business.
1767 (ii) The action of a majority of the commission members when a quorum is present is
1768 the action of the commission.
1769 (7) The commissioner shall staff the commission.
1770 Section 9. Section 31A-6a-101 is amended to read:
1771 31A-6a-101. Definitions.
1772 As used in this chapter:
1773 (1) "Home warranty service contract" means a service contract that requires a person to
1774 repair or replace a component, system, or appliance of a home or make indemnification to the
1775 contract holder for the repair or replacement of a component, system, or appliance of the home:
1776 (a) upon mechanical or operational failure of the component, system, or appliance;
1777 (b) for a predetermined fee; and
1778 (c) if:
1779 (i) the person is not the builder, seller, or lessor of the home that is the subject of the
1780 contract; and
1781 (ii) the failure described in Subsection (1)(a) occurs within a specified period of time.
1782 [
1783 a vehicle protection product warranty, that is in addition to the cost of purchasing the warranty.
1784 (b) "Incidental cost" includes an insurance policy deductible, a rental vehicle charge,
1785 the difference between the actual value of the stolen vehicle at the time of theft and the cost of
1786 a replacement vehicle, sales tax, a registration fee, a transaction fee, a mechanical inspection
1787 fee, or damage a theft causes to a vehicle.
1788 [
1789 issued by an insurance company that has complied with either Chapter 5, Domestic Stock and
1790 Mutual Insurance Corporations, or Chapter 14, Foreign Insurers, that undertakes to perform or
1791 provide repair or replacement service on goods or property, or indemnification for repair or
1792 replacement service, for the operational or structural failure of the goods or property due to a
1793 defect in materials, workmanship, or normal wear and tear.
1794 [
1795 original manufacturer of the goods commonly referred to as "after market parts."
1796 [
1797 vehicle.
1798 (b) "Road hazard" includes potholes, rocks, wood debris, metal parts, glass, plastic,
1799 curbs, or composite scraps.
1800 [
1801 for the repair or maintenance of goods or property, for their operational or structural failure due
1802 to a defect in materials, workmanship, normal wear and tear, power surge or interruption, or
1803 accidental damage from handling, with or without additional provision for incidental payment
1804 of indemnity under limited circumstances, including towing, providing a rental car, providing
1805 emergency road service, and covering food spoilage.
1806 (b) "Service contract" does not include:
1807 (i) mechanical breakdown insurance; or
1808 (ii) a prepaid contract of limited duration that provides for scheduled maintenance
1809 only, regardless of whether the contract is executed before, on, or after May 9, 2017.
1810 (c) "Service contract" includes any contract or agreement to perform or reimburse the
1811 service contract holder for any one or more of the following services:
1812 (i) the repair or replacement of tires, wheels, or both on a motor vehicle damaged as a
1813 result of coming into contact with a road hazard;
1814 (ii) the removal of dents, dings, or creases on a motor vehicle that can be repaired using
1815 the process of paintless dent removal without affecting the existing paint finish and without
1816 replacing vehicle body panels, sanding, bonding, or painting;
1817 (iii) the repair of chips or cracks in or the replacement of a motor vehicle windshield as
1818 a result of damage caused by a road hazard, that is primary to the coverage offered by the motor
1819 vehicle owner's motor vehicle insurance policy; or
1820 (iv) the replacement of a motor vehicle key or key-fob if the key or key-fob becomes
1821 inoperable, lost, or stolen, except that the replacement of lost or stolen property is limited to
1822 only the replacement of a lost or stolen motor vehicle key or key-fob.
1823 [
1824 service contract.
1825 [
1826 administers, sells or offers to sell a service contract, or who is contractually obligated to
1827 provide service under a service contract.
1828 [
1829 means a policy of insurance providing coverage for all obligations and liabilities incurred by
1830 the service contract provider or warrantor under the terms of the service contract or vehicle
1831 protection product warranty issued by the provider or warrantor.
1832 [
1833 (i) installed on or applied to a motor vehicle; and
1834 (ii) designed to:
1835 (A) prevent the theft of the vehicle; or
1836 (B) if the vehicle is stolen, aid in the recovery of the vehicle.
1837 (b) "Vehicle protection product" includes:
1838 (i) a vehicle protection product warranty;
1839 (ii) an alarm system;
1840 (iii) a body part marking product;
1841 (iv) a steering lock;
1842 (v) a window etch product;
1843 (vi) a pedal and ignition lock;
1844 (vii) a fuel and ignition kill switch; and
1845 (viii) an electronic, radio, or satellite tracking device.
1846 [
1847 warrantor that provides that if the vehicle protection product fails to prevent the theft of the
1848 motor vehicle, or aid in the recovery of the motor vehicle within a time period specified in the
1849 warranty, not exceeding 30 days after the day on which the motor vehicle is reported stolen, the
1850 warrantor will reimburse the warranty holder for incidental costs specified in the warranty, not
1851 exceeding $5,000, or in a specified fixed amount not exceeding $5,000.
1852 (12) "Vehicle service contract" means a service contract for the repair or maintenance
1853 of a vehicle:
1854 (a) for operational or structural failure because of a defect in materials, workmanship,
1855 normal wear and tear, or accidental damage from handling; and
1856 (b) with or without additional provision for incidental payment of indemnity under
1857 limited circumstances, including towing, providing a rental car, or providing emergency road
1858 service.
1859 [
1860 holder under the terms of a vehicle protection product warranty.
1861 [
1862 product, any authorized transferee or assignee of the purchaser, or any other person legally
1863 assuming the purchaser's rights under the vehicle protection product warranty.
1864 Section 10. Section 31A-6a-103 is amended to read:
1865 31A-6a-103. Requirements for doing business.
1866 (1) A service contract or vehicle protection product warranty may not be issued, sold,
1867 or offered for sale in this state unless the service contract or vehicle protection product
1868 warranty is insured under a reimbursement insurance policy issued by:
1869 (a) an insurer authorized to do business in this state; or
1870 (b) a recognized surplus lines carrier.
1871 (2) (a) A service contract or vehicle protection product warranty may not be issued,
1872 sold, or offered for sale unless the service contract provider or warrantor completes the
1873 registration process described in this Subsection (2).
1874 (b) To register, a service contract provider or warrantor shall submit to the department
1875 the following:
1876 (i) an application for registration;
1877 (ii) a fee established in accordance with Section 31A-3-103;
1878 (iii) a copy of any service contract or vehicle protection product warranty that the
1879 service contract provider or warrantor offers in this state; and
1880 (iv) a copy of the service contract provider's or warrantor's reimbursement insurance
1881 policy.
1882 (c) A service provider or warrantor shall submit the information described in
1883 Subsection (2)(b) no less than 30 days before the day on which the service provider or
1884 warrantor issues, sells, offers for sale, or uses a service contract, vehicle protection product
1885 warranty, or reimbursement insurance policy in this state.
1886 (d) A service provider or warrantor shall file any modification of the terms of a service
1887 contract, vehicle protection product warranty, or reimbursement insurance policy 30 days
1888 before the day on which it is used in this state.
1889 (e) A person complying with this chapter is not required to comply with:
1890 (i) Subsections 31A-21-201(1) and 31A-23a-402(3); or
1891 (ii) Chapter 19a, Utah Rate Regulation Act.
1892 (f) (i) Each year before March 1, a service provider shall pay an annual registration fee
1893 established in accordance with Section 31A-3-103.
1894 (ii) If a service provider does not pay the annual registration fee described in this
1895 Subsection (2)(f) before March 1:
1896 (A) the service provider's registration is expired; and
1897 (B) the service provider may apply for registration in accordance with this Subsection
1898 (2).
1899 (3) (a) Premiums collected on a service contract are not subject to premium taxes.
1900 (b) Premiums collected by an issuer of a reimbursement insurance policy are subject to
1901 premium taxes.
1902 (4) A person marketing, selling, or offering to sell a service contract or vehicle
1903 protection product warranty for a service contract provider or warrantor that complies with this
1904 chapter is exempt from the licensing requirements of this title.
1905 (5) A service contract provider or warrantor complying with this chapter is not required
1906 to comply with:
1907 (a) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
1908 (b) Chapter 7, Nonprofit Health Service Insurance Corporations;
1909 (c) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
1910 (d) Chapter 9, Insurance Fraternals;
1911 (e) Chapter 10, Annuities;
1912 (f) Chapter 11, Motor Clubs;
1913 (g) Chapter 12, State Risk Management Fund;
1914 (h) Chapter 14, Foreign Insurers;
1915 (i) Chapter 19a, Utah Rate Regulation Act;
1916 (j) Chapter 25, Third Party Administrators; and
1917 (k) Chapter 28, Guaranty Associations.
1918 Section 11. Section 31A-6a-104 is amended to read:
1919 31A-6a-104. Required disclosures.
1920 (1) A reimbursement insurance policy insuring a service contract or a vehicle
1921 protection product warranty that is issued, sold, or offered for sale in this state shall
1922 conspicuously state that, upon failure of the service contract provider or warrantor to perform
1923 under the contract, the issuer of the policy shall:
1924 (a) pay on behalf of the service contract provider or warrantor any sums the service
1925 contract provider or warrantor is legally obligated to pay according to the service contract
1926 provider's or warrantor's contractual obligations under the service contract or a vehicle
1927 protection product warranty issued or sold by the service contract provider or warrantor; or
1928 (b) provide the service which the service contract provider is legally obligated to
1929 perform, according to the service contract provider's contractual obligations under the service
1930 contract issued or sold by the service contract provider.
1931 (2) (a) A service contract may not be issued, sold, or offered for sale in this state unless
1932 the service contract contains the following statements in substantially the following form:
1933 (i) "Obligations of the provider under this service contract are guaranteed under a
1934 service contract reimbursement insurance policy. Should the provider fail to pay or provide
1935 service on any claim within 60 days after proof of loss has been filed, the contract holder is
1936 entitled to make a claim directly against the Insurance Company.";
1937 (ii) "This service contract or warranty is subject to limited regulation by the Utah
1938 Insurance Department. To file a complaint, contact the Utah Insurance Department."; and
1939 (iii) A service contract or reimbursement insurance policy may not be issued, sold, or
1940 offered for sale in this state unless the contract contains a statement in substantially the
1941 following form, "Coverage afforded under this contract is not guaranteed by the Property and
1942 Casualty Guaranty Association."
1943 (b) A vehicle protection product warranty may not be issued, sold, or offered for sale in
1944 this state unless the vehicle protection product warranty contains the following statements in
1945 substantially the following form:
1946 (i) "Obligations of the warrantor under this vehicle protection product warranty are
1947 guaranteed under a reimbursement insurance policy. Should the warrantor fail to pay on any
1948 claim within 60 days after proof of loss has been filed, the warranty holder is entitled to make a
1949 claim directly against the Insurance Company.";
1950 (ii) "This vehicle protection product warranty is subject to limited regulation by the
1951 Utah Insurance Department. To file a complaint, contact the Utah Insurance Department."; and
1952 (iii) as applicable:
1953 (A) "The warrantor under this vehicle protection product warranty will reimburse the
1954 warranty holder as specified in the warranty upon the theft of the vehicle."; or
1955 (B) "The warrantor under this vehicle protection product warranty will reimburse the
1956 warranty holder as specified in the warranty and at the end of the time period specified in the
1957 warranty if, following the theft of the vehicle, the stolen vehicle is not recovered within a time
1958 period specified in the warranty, not to exceed 30 days after the day on which the vehicle is
1959 reported stolen."
1960 (c) A vehicle protection product warranty, or reimbursement insurance policy, may not
1961 be issued, sold, or offered for sale in this state unless the warranty contains a statement in
1962 substantially the following form, "Coverage afforded under this warranty is not guaranteed by
1963 the Property and Casualty Guaranty Association."
1964 (3) A service contract and a vehicle protection product warranty shall:
1965 (a) conspicuously state the name, address, and a toll free claims service telephone
1966 number of the reimbursement insurer;
1967 (b) (i) identify the service contract provider, the seller, and the service contract holder;
1968 or
1969 (ii) identify the warrantor, the seller, and the warranty holder;
1970 (c) conspicuously state the total purchase price and the terms under which the service
1971 contract or warranty is to be paid;
1972 (d) conspicuously state the existence of any deductible amount;
1973 (e) specify the merchandise, service to be provided, and any limitation, exception, or
1974 exclusion;
1975 (f) state a term, restriction, or condition governing the transferability of the service
1976 contract or warranty; and
1977 (g) state a term, restriction, or condition that governs cancellation of the service
1978 contract as provided in Sections 31A-21-303 through 31A-21-305 by either the contract holder
1979 or service contract provider.
1980 (4) If prior approval of repair work is required[
1981 service contract or a vehicle service contract, the contract shall conspicuously state the
1982 procedure for obtaining prior approval and for making a claim, including:
1983 (a) a toll free telephone number for claim service; and
1984 (b) a procedure for obtaining reimbursement for emergency repairs performed outside
1985 of normal business hours.
1986 (5) A preexisting condition clause in a service contract shall specifically state which
1987 preexisting condition is excluded from coverage.
1988 (6) (a) Except as provided in Subsection (6)(c), a service contract shall state the
1989 conditions upon which the use of a nonmanufacturers' part is allowed.
1990 (b) A condition described in Subsection (6)(a) shall comply with applicable state and
1991 federal laws.
1992 (c) This Subsection (6) does not apply to:
1993 (i) a home warranty service contract[
1994 (ii) a service contract that does not impose an obligation to provide parts.
1995 (7) This section applies to a vehicle protection product warranty, except for the
1996 requirements of Subsections (3)(d) and (g), (4), (5), and (6). The department may make rules
1997 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement
1998 the application of this section to a vehicle protection product warranty.
1999 (8) (a) As used in this Subsection (8), "conspicuous statement" means a disclosure that:
2000 (i) appears in all-caps, bold, and 14-point font; and
2001 (ii) provides a space to be initialed by the consumer:
2002 (A) immediately below the printed disclosure; and
2003 (B) at or before the time the consumer purchases the vehicle protection product.
2004 (b) A vehicle protection product warranty shall contain a conspicuous statement in
2005 substantially the following form: "Purchase of this product is optional and is not required in
2006 order to finance, lease, or purchase a motor vehicle."
2007 (9) If a vehicle protection product warranty states that the warrantor will reimburse the
2008 warranty holder for incidental costs, the vehicle protection product warranty shall state how
2009 incidental costs paid under the warranty are calculated.
2010 (10) If a vehicle protection product warranty states that the warrantor will reimburse
2011 the warranty holder in a fixed amount, the vehicle protection product warranty shall state the
2012 fixed amount.
2013 Section 12. Section 31A-8-211 is amended to read:
2014 31A-8-211. Deposit.
2015 (1) Except as provided in Subsection (2), each health maintenance organization
2016 authorized in this state shall maintain a deposit with the commissioner under Section
2017 31A-2-206 in an amount equal to the sum of:
2018 (a) $100,000; and
2019 (b) 50% of the greater of:
2020 (i) $900,000;
2021 (ii) 2% of the annual premium revenues as reported on the most recent annual financial
2022 statement filed with the commissioner; or
2023 (iii) an amount equal to the sum of three months uncovered health care expenditures as
2024 reported on the most recent financial statement filed with the commissioner.
2025 (2) (a) [
2026 organization from the deposit requirement of Subsection (1) if:
2027 (i) the commissioner determines that the enrollees' interests are adequately protected;
2028 (ii) the health maintenance organization has been continuously authorized to do
2029 business in this state for at least five years; and
2030 (iii) the health maintenance organization has $5,000,000 surplus in excess of the health
2031 maintenance organization's company action level RBC as defined in Subsection
2032 31A-17-601(8)(b).
2033 (b) The commissioner may rescind an exemption given under Subsection (2)(a).
2034 (3) (a) Each limited health plan authorized in this state shall maintain a deposit with
2035 the commissioner under Section 31A-2-206 in an amount equal to the minimum capital or
2036 permanent surplus plus 50% of the greater of:
2037 (i) .5 times minimum required capital or minimum permanent surplus; or
2038 (ii) (A) during the first year of operation, 10% of the limited health plan's projected
2039 uncovered expenditures for the first year of operation;
2040 (B) during the second year of operation, 12% of the limited health plan's projected
2041 uncovered expenditures for the second year of operation;
2042 (C) during the third year of operation, 14% of the limited health plan's projected
2043 uncovered expenditures for the third year of operation;
2044 (D) during the fourth year of operation, 18% of the limited health plan's projected
2045 uncovered expenditures during the fourth year of operation; or
2046 (E) during the fifth year of operation, and during all subsequent years, 20% of the
2047 limited health plan's projected uncovered expenditures for the previous 12 months.
2048 (b) Projections of future uncovered expenditures shall be established in a manner that
2049 is approved by the commissioner.
2050 (4) A deposit required by this section may be counted toward the minimum capital or
2051 minimum permanent surplus required under Section 31A-8-209.
2052 Section 13. Section 31A-17-404 is amended to read:
2053 31A-17-404. Credit allowed a domestic ceding insurer against reserves for
2054 reinsurance.
2055 (1) A domestic ceding insurer is allowed credit for reinsurance as either an asset or a
2056 reduction from liability for reinsurance ceded only if the reinsurer meets the requirements of
2057 Subsection (3), (4), (5), (6), (7), [
2058 (a) Credit is allowed under Subsection (3), (4), or (5) only with respect to a cession of a
2059 kind or class of business that the assuming insurer is licensed or otherwise permitted to write or
2060 assume:
2061 (i) in its state of domicile; or
2062 (ii) in the case of a United States branch of an alien assuming insurer, in the state
2063 through which it is entered and licensed to transact insurance or reinsurance.
2064 (b) Credit is allowed under Subsection (5) or (6) only if the applicable requirements of
2065 Subsection [
2066 (2) A domestic ceding insurer is allowed credit for reinsurance ceded:
2067 (a) only if the reinsurance is payable in a manner consistent with Section 31A-22-1201;
2068 (b) only to the extent that the accounting:
2069 (i) is consistent with the terms of the reinsurance contract; and
2070 (ii) clearly reflects:
2071 (A) the amount and nature of risk transferred; and
2072 (B) liability, including contingent liability, of the ceding insurer;
2073 (c) only to the extent the reinsurance contract shifts insurance policy risk from the
2074 ceding insurer to the assuming reinsurer in fact and not merely in form; and
2075 (d) only if the reinsurance contract contains a provision placing on the reinsurer the
2076 credit risk of all dealings with intermediaries regarding the reinsurance contract.
2077 (3) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
2078 assuming insurer that is licensed to transact insurance or reinsurance in this state.
2079 (4) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
2080 assuming insurer that is accredited by the commissioner as a reinsurer in this state.
2081 (b) An insurer is accredited as a reinsurer if the insurer:
2082 (i) files with the commissioner evidence of the insurer's submission to this state's
2083 jurisdiction;
2084 (ii) submits to the commissioner's authority to examine the insurer's books and records;
2085 (iii) (A) is licensed to transact insurance or reinsurance in at least one state; or
2086 (B) in the case of a United States branch of an alien assuming insurer, is entered
2087 through and licensed to transact insurance or reinsurance in at least one state;
2088 (iv) files annually with the commissioner a copy of the insurer's:
2089 (A) annual statement filed with the insurance department of its state of domicile; and
2090 (B) most recent audited financial statement; and
2091 (v) (A) (I) has not had its accreditation denied by the commissioner within 90 days [
2092 after the day on which the insurer submits the information required by this Subsection (4); and
2093 (II) maintains a surplus with regard to policyholders in an amount not less than
2094 $20,000,000; or
2095 (B) (I) has its accreditation approved by the commissioner; and
2096 (II) maintains a surplus with regard to policyholders in an amount less than
2097 $20,000,000.
2098 (c) Credit may not be allowed a domestic ceding insurer if the assuming insurer's
2099 accreditation is revoked by the commissioner after a notice and hearing.
2100 (5) (a) A domestic ceding insurer is allowed a credit if:
2101 (i) the reinsurance is ceded to an assuming insurer that is:
2102 (A) domiciled in a state meeting the requirements of Subsection (5)(a)(ii); or
2103 (B) in the case of a United States branch of an alien assuming insurer, is entered
2104 through a state meeting the requirements of Subsection (5)(a)(ii);
2105 (ii) the state described in Subsection (5)(a)(i) employs standards regarding credit for
2106 reinsurance substantially similar to those applicable under this section; and
2107 (iii) the assuming insurer or United States branch of an alien assuming insurer:
2108 (A) maintains a surplus with regard to policyholders in an amount not less than
2109 $20,000,000; and
2110 (B) submits to the authority of the commissioner to examine its books and records.
2111 (b) The requirements of Subsections (5)(a)(i) and (ii) do not apply to reinsurance ceded
2112 and assumed pursuant to a pooling arrangement among insurers in the same holding company
2113 system.
2114 (6) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
2115 assuming insurer that maintains a trust fund:
2116 (i) created in accordance with rules made by the commissioner pursuant to Title 63G,
2117 Chapter 3, Utah Administrative Rulemaking Act; and
2118 (ii) in a qualified United States financial institution for the payment of a valid claim of:
2119 (A) a United States ceding insurer of the assuming insurer;
2120 (B) an assign of the United States ceding insurer; and
2121 (C) a successor in interest to the United States ceding insurer.
2122 (b) To enable the commissioner to determine the sufficiency of the trust fund described
2123 in Subsection (6)(a), the assuming insurer shall:
2124 (i) report annually to the commissioner information substantially the same as that
2125 required to be reported on the National Association of Insurance Commissioners Annual
2126 Statement form by a licensed insurer; and
2127 (ii) (A) submit to examination of its books and records by the commissioner; and
2128 (B) pay the cost of an examination.
2129 (c) (i) Credit for reinsurance may not be granted under this Subsection (6) unless the
2130 form of the trust and any amendment to the trust is approved by:
2131 (A) the commissioner of the state where the trust is domiciled; or
2132 (B) the commissioner of another state who, pursuant to the terms of the trust
2133 instrument, accepts principal regulatory oversight of the trust.
2134 (ii) The form of the trust and an amendment to the trust shall be filed with the
2135 commissioner of every state in which a ceding insurer beneficiary of the trust is domiciled.
2136 (iii) The trust instrument shall provide that a contested claim is valid and enforceable
2137 upon the final order of a court of competent jurisdiction in the United States.
2138 (iv) The trust shall vest legal title to its assets in its one or more trustees for the benefit
2139 of:
2140 (A) a United States ceding insurer of the assuming insurer;
2141 (B) an assign of the United States ceding insurer; or
2142 (C) a successor in interest to the United States ceding insurer.
2143 (v) The trust and the assuming insurer are subject to examination as determined by the
2144 commissioner.
2145 (vi) The trust shall remain in effect for as long as the assuming insurer has an
2146 outstanding obligation due under a reinsurance agreement subject to the trust.
2147 (vii) No later than February 28 of each year, the trustee of the trust shall:
2148 (A) report to the commissioner in writing the balance of the trust;
2149 (B) list the trust's investments at the end of the preceding calendar year; and
2150 (C) (I) certify the date of termination of the trust, if so planned; or
2151 (II) certify that the trust will not expire [
2152 (d) The following requirements apply to the following categories of assuming insurer:
2153 (i) For a single assuming insurer:
2154 (A) the trust fund shall consist of funds in trust in an amount not less than the assuming
2155 insurer's liabilities attributable to reinsurance ceded by United States ceding insurers; and
2156 (B) the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000,
2157 except as provided in Subsection (6)(d)(ii).
2158 (ii) (A) At any time after the assuming insurer has permanently discontinued
2159 underwriting new business secured by the trust for at least three full years, the commissioner
2160 with principal regulatory oversight of the trust may authorize a reduction in the required
2161 trusteed surplus, but only after a finding, based on an assessment of the risk, that the new
2162 required surplus level is adequate for the protection of United States ceding insurers,
2163 policyholders, and claimants in light of reasonably foreseeable adverse loss development.
2164 (B) The risk assessment may involve an actuarial review, including an independent
2165 analysis of reserves and cash flows, and shall consider all material risk factors, including, when
2166 applicable, the lines of business involved, the stability of the incurred loss estimates, and the
2167 effect of the surplus requirements on the assuming insurer's liquidity or solvency.
2168 (C) The minimum required trusteed surplus may not be reduced to an amount less than
2169 30% of the assuming insurer's liabilities attributable to reinsurance ceded by United States
2170 ceding insurers covered by the trust.
2171 (iii) For a group acting as assuming insurer, including incorporated and individual
2172 unincorporated underwriters:
2173 (A) for reinsurance ceded under a reinsurance agreement with an inception,
2174 amendment, or renewal date on or after August 1, 1995, the trust shall consist of a trusteed
2175 account in an amount not less than the respective underwriters' several liabilities attributable to
2176 business ceded by the one or more United States domiciled ceding insurers to an underwriter of
2177 the group;
2178 (B) for reinsurance ceded under a reinsurance agreement with an inception date on or
2179 before July 31, 1995, and not amended or renewed after July 31, 1995, notwithstanding the
2180 other provisions of this chapter, the trust shall consist of a trusteed account in an amount not
2181 less than the respective underwriters' several insurance and reinsurance liabilities attributable to
2182 business written in the United States;
2183 (C) in addition to a trust described in Subsection (6)(d)(iii)(A) or (B), the group shall
2184 maintain in trust a trusteed surplus of which $100,000,000 is held jointly for the benefit of the
2185 one or more United States domiciled ceding insurers of a member of the group for all years of
2186 account;
2187 (D) the incorporated members of the group:
2188 (I) may not be engaged in a business other than underwriting as a member of the group;
2189 and
2190 (II) are subject to the same level of regulation and solvency control by the group's
2191 domiciliary regulator as are the unincorporated members; and
2192 (E) within 90 days after the day on which the group's financial statements are due to be
2193 filed with the group's domiciliary regulator, the group shall provide to the commissioner:
2194 (I) an annual certification by the group's domiciliary regulator of the solvency of each
2195 underwriter member; or
2196 (II) if a certification is unavailable, a financial statement, prepared by an independent
2197 public accountant, of each underwriter member of the group.
2198 (iv) For a group of incorporated underwriters under common administration, the group
2199 shall:
2200 (A) have continuously transacted an insurance business outside the United States for at
2201 least three years immediately preceding the day on which the group makes application for
2202 accreditation;
2203 (B) maintain aggregate policyholders' surplus of at least $10,000,000,000;
2204 (C) maintain a trust fund in an amount not less than the group's several liabilities
2205 attributable to business ceded by the one or more United States domiciled ceding insurers to a
2206 member of the group pursuant to a reinsurance contract issued in the name of the group;
2207 (D) in addition to complying with the other provisions of this Subsection (6)(d)(iv),
2208 maintain a joint trusteed surplus of which $100,000,000 is held jointly for the benefit of the one
2209 or more United States domiciled ceding insurers of a member of the group as additional
2210 security for these liabilities; and
2211 (E) within 90 days after the day on which the group's financial statements are due to be
2212 filed with the group's domiciliary regulator, make available to the commissioner:
2213 (I) an annual certification of each underwriter member's solvency by the member's
2214 domiciliary regulator; and
2215 (II) a financial statement of each underwriter member of the group prepared by an
2216 independent public accountant.
2217 [
2218
2219
2220
2221 [
2222 assuming insurer that secures its obligations in accordance with this Subsection [
2223 (a) The insurer shall be certified by the commissioner as a reinsurer in this state.
2224 (b) To be eligible for certification, the assuming insurer shall:
2225 (i) be domiciled and licensed to transact insurance or reinsurance in a qualified
2226 jurisdiction, as determined by the commissioner pursuant to Subsection [
2227 (ii) maintain minimum capital and surplus, or its equivalent, in an amount to be
2228 determined by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
2229 3, Utah Administrative Rulemaking Act;
2230 (iii) maintain financial strength ratings from two or more rating agencies considered
2231 acceptable by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
2232 3, Utah Administrative Rulemaking Act; and
2233 (iv) agree to:
2234 (A) submit to the jurisdiction of this state;
2235 (B) appoint the commissioner as its agent for service of process in this state;
2236 (C) provide security for 100% of the assuming insurer's liabilities attributable to
2237 reinsurance ceded by United States ceding insurers if it resists enforcement of a final United
2238 States judgment;
2239 (D) agree to meet applicable information filing requirements as determined by the
2240 commissioner including an application for certification, a renewal and on an ongoing basis; and
2241 (E) any other requirements for certification considered relevant by the commissioner.
2242 (c) An association, including incorporated and individual unincorporated underwriters,
2243 may be a certified reinsurer. To be eligible for certification, in addition to satisfying
2244 requirements of Subsections [
2245 (i) shall satisfy its minimum capital and surplus requirements through the capital and
2246 surplus equivalents, net of liabilities, of the association and its members, which shall include a
2247 joint central fund that may be applied to any unsatisfied obligation of the association or any of
2248 its members in an amount determined by the commissioner to provide adequate protection;
2249 (ii) may not have incorporated members of the association engaged in any business
2250 other than underwriting as a member of the association;
2251 (iii) shall be subject to the same level of regulation and solvency control of the
2252 incorporated members of the association by the association's domiciliary regulator as are the
2253 unincorporated members; and
2254 (iv) within 90 days after its financial statements are due to be filed with the
2255 association's domiciliary regulator provide:
2256 (A) to the commissioner an annual certification by the association's domiciliary
2257 regulator of the solvency of each underwriter member; or
2258 (B) if a certification is unavailable, financial statements prepared by independent
2259 public accountants, of each underwriter member of the association.
2260 (d) The commissioner shall create and publish a list of qualified jurisdictions under
2261 which an assuming insurer licensed and domiciled in the jurisdiction is eligible to be
2262 considered for certification by the commissioner as a certified reinsurer.
2263 (i) To determine whether the domiciliary jurisdiction of a non-United States assuming
2264 insurer is eligible to be recognized as a qualified jurisdiction, the commissioner:
2265 (A) shall evaluate the appropriateness and effectiveness of the reinsurance supervisory
2266 system of the jurisdiction, both initially and on an ongoing basis;
2267 (B) shall consider the rights, the benefits, and the extent of reciprocal recognition
2268 afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the
2269 United States;
2270 (C) shall require the qualified jurisdiction to share information and cooperate with the
2271 commissioner with respect to all certified reinsurers domiciled within that jurisdiction; and
2272 (D) may not recognize a jurisdiction as a qualified jurisdiction if the commissioner has
2273 determined that the jurisdiction does not adequately and promptly enforce final United States
2274 judgments and arbitration awards.
2275 (ii) The commissioner may consider additional factors in determining a qualified
2276 jurisdiction.
2277 (iii) A list of qualified jurisdictions shall be published through the National
2278 Association of Insurance Commissioners' Committee Process and the commissioner shall:
2279 (A) consider this list in determining qualified jurisdictions; and
2280 (B) if the commissioner approves a jurisdiction as qualified that does not appear on the
2281 National Association of Insurance Commissioner's list of qualified jurisdictions, provide
2282 thoroughly documented justification in accordance with criteria to be developed by rule made
2283 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2284 (iv) United States jurisdictions that meet the requirement for accreditation under the
2285 National Association of Insurance Commissioners' financial standards and accreditation
2286 program shall be recognized as qualified jurisdictions.
2287 (v) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction,
2288 the commissioner may suspend the reinsurer's certification indefinitely, in lieu of revocation.
2289 (e) The commissioner shall:
2290 (i) assign a rating to each certified reinsurer, giving due consideration to the financial
2291 strength ratings that have been assigned by rating agencies considered acceptable to the
2292 commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
2293 Rulemaking Act; and
2294 (ii) publish a list of all certified reinsurers and their ratings.
2295 (f) A certified reinsurer shall secure obligations assumed from United States ceding
2296 insurers under this Subsection [
2297 made by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
2298 Rulemaking Act.
2299 (i) For a domestic ceding insurer to qualify for full financial statement credit for
2300 reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a
2301 form acceptable to the commissioner and consistent with Section 31A-17-404.1, or in a
2302 multibeneficiary trust in accordance with Subsections (5), (6), and [
2303 otherwise provided in this Subsection [
2304 (ii) If a certified reinsurer maintains a trust to fully secure its obligations subject to
2305 Subsections (5), (6), and [
2306 reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate
2307 trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a
2308 certified reinsurer with reduced security as permitted by this Subsection [
2309 laws of other United States jurisdictions and for its obligations subject to Subsections (5), (6),
2310 and [
2311 (iii) It shall be a condition to the grant of certification under this Subsection [
2312 that the certified reinsurer shall have bound itself:
2313 (A) by the language of the trust and agreement with the commissioner with principal
2314 regulatory oversight of the trust account; and
2315 (B) upon termination of the trust account, to fund, out of the remaining surplus of the
2316 trust, any deficiency of any other trust account.
2317 (iv) The minimum trusteed surplus requirements provided in Subsections (5), (6), and
2318 [
2319 reinsurer for the purpose of securing obligations incurred under this Subsection [
2320 except that the trust shall maintain a minimum trusteed surplus of $10,000,000.
2321 (v) With respect to obligations incurred by a certified reinsurer under this Subsection
2322 [
2323 (A) shall reduce the allowable credit by an amount proportionate to the deficiency; and
2324 (B) may impose further reductions in allowable credit upon finding that there is a
2325 material risk that the certified reinsurer's obligations will not be paid in full when due.
2326 (vi) For purposes of this Subsection [
2327 has been terminated for any reason shall be treated as a certified reinsurer required to secure
2328 100% of its obligations.
2329 (A) As used in this Subsection [
2330 suspension, voluntary surrender, and inactive status.
2331 (B) If the commissioner continues to assign a higher rating as permitted by other
2332 provisions of this section, the requirement under this Subsection [
2333 to a certified reinsurer in inactive status or to a reinsurer whose certification has been
2334 suspended.
2335 (g) If an applicant for certification has been certified as a reinsurer in a National
2336 Association of Insurance Commissioners' accredited jurisdiction, the commissioner may:
2337 (i) defer to that jurisdiction's certification;
2338 (ii) defer to the rating assigned by that jurisdiction; and
2339 (iii) consider such reinsurer to be a certified reinsurer in this state.
2340 (h) (i) A certified reinsurer that ceases to assume new business in this state may request
2341 to maintain its certification in inactive status in order to continue to qualify for a reduction in
2342 security for its in-force business.
2343 (ii) An inactive certified reinsurer shall continue to comply with all applicable
2344 requirements of this Subsection [
2345 (iii) The commissioner shall assign a rating to a reinsurer that qualifies under this
2346 Subsection [
2347 assuming new business.
2348 (8) (a) As used in this Subsection (8):
2349 (i) "Covered agreement" means an agreement entered into pursuant to Dodd-Frank
2350 Wall Street Reform and Consumer Protection Act, 31 U.S.C. Sections 313 and 314, that is
2351 currently in effect or in a period of provisional application and addresses the elimination, under
2352 specified conditions, of collateral requirements as a condition for entering into any reinsurance
2353 agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to
2354 recognize credit for reinsurance.
2355 (ii) "Reciprocal jurisdiction" means a jurisdiction that is:
2356 (A) a non-United States jurisdiction that is subject to an in-force covered agreement
2357 with the United States, each within its legal authority, or, in the case of a covered agreement
2358 between the United States and European Union, is a member state of the European Union;
2359 (B) a United States jurisdiction that meets the requirements for accreditation under the
2360 National Association of Insurance Commissioners' financial standards and accreditation
2361 program; or
2362 (C) a qualified jurisdiction, as determined by the commissioner in accordance with
2363 Subsection (7)(d), that is not otherwise described in this Subsection (8)(a)(ii) and meets certain
2364 additional requirements, consistent with the terms and conditions of in-force covered
2365 agreements, as specified by the commissioner in rule made in accordance with Title 63G,
2366 Chapter 3, Utah Administrative Rulemaking Act.
2367 (b) (i) Credit shall be allowed when the reinsurance is ceded to an assuming insurer
2368 meeting each of the conditions set forth in this Subsection (8)(b).
2369 (ii) The assuming insurer must have its head office or be domiciled in, as applicable,
2370 and be licensed in a reciprocal jurisdiction.
2371 (iii) (A) The assuming insurer must have and maintain, on an ongoing basis, minimum
2372 capital and surplus, or its equivalent, calculated according to the methodology of its
2373 domiciliary jurisdiction, in an amount to be set forth in regulation.
2374 (B) If the assuming insurer is an association, including incorporated and individual
2375 unincorporated underwriters, it must have and maintain, on an ongoing basis, minimum capital
2376 and surplus equivalents (net of liabilities), calculated according to the methodology applicable
2377 in its domiciliary jurisdiction, and a central fund containing a balance in amounts to be set forth
2378 in regulation.
2379 (iv) (A) The assuming insurer must have and maintain, on an ongoing basis, a
2380 minimum solvency or capital ration, as applicable, which will be set forth in regulation.
2381 (B) If the assuming insurer is an association, including incorporated and individual
2382 unincorporated underwriters, it must have and maintain, on an ongoing basis, a minimum
2383 solvency or capital ratio in the reciprocal jurisdiction where the assuming insurer has its head
2384 office or is domiciled, as applicable, and is also licensed.
2385 (v) The assuming insurer must agree and provide adequate assurance to the
2386 commissioner, in a form specified by the commissioner by rule made in accordance with Title
2387 63G, Chapter 3, Utah Administrative Rulemaking Act, as follows:
2388 (A) the assuming insurer must provide prompt written notice and explanation to the
2389 commissioner if it falls below the minimum requirements set forth in Subsections (8)(c) or (d),
2390 or if any regulatory action is taken against it for serious noncompliance with applicable law;
2391 (B) the assuming insurer must consent in writing to the jurisdiction of the courts of this
2392 state and to the appointment of the commissioner as agent for service of process, however the
2393 commissioner may require that consent for service of process be provided to the commissioner
2394 and included in each reinsurance agreement and nothing in this provision shall limit, or in any
2395 way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute
2396 resolution mechanisms, except to the extent such agreements are unenforceable under
2397 applicable insolvency or delinquency laws;
2398 (C) the assuming insurer must consent in writing to pay all final judgments, wherever
2399 enforcement is sought, obtained by a ceding insurer or its legal successor, that have been
2400 declared enforceable in the jurisdiction where the judgment was obtained;
2401 (D) each reinsurance agreement must include a provision requiring the assuming
2402 insurer to provide security in an amount equal to 100% of the assuming insurer's liabilities
2403 attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists
2404 enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it
2405 was obtained or a properly enforceable arbitration award, whether obtained by the ceding
2406 insurer or by its legal successor on behalf of its resolution estate; and
2407 (E) the assuming insurer must confirm that it is not presently participating in any
2408 solvent scheme of arrangement which involved this state's ceding insurers, and agree to notify
2409 the ceding insurer and the commissioner and to provide security:
2410 (I) in an amount equal to 100% of the assuming insurer's liabilities to the ceding
2411 insurer, should the assuming insurer enter into such a solvent scheme of arrangement; and
2412 (II) in a form consistent with the provisions of Subsections (7) and (10) and as
2413 specified by the commissioner in regulation.
2414 (vi) The assuming insurer or its legal successor must provide, if requested by the
2415 commissioner, on behalf of itself and any legal predecessors, certain documentation to the
2416 commissioner, as specified by the commissioner by rule made in accordance with Title 63G,
2417 Chapter 3, Utah Administrative Rulemaking Act.
2418 (vii) The assuming insurer must maintain a practice of prompt payment of claims under
2419 reinsurance agreements, pursuant to criteria set forth in rule made in accordance with Title
2420 63G, Chapter 3, Utah Administrative Rulemaking Act.
2421 (viii) The assuming insurer's supervisory authority must confirm to the commissioner
2422 on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily
2423 reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements
2424 set forth in Subsections (8)(c) and (d).
2425 (ix) Nothing in this provision precludes an assuming insurer from providing the
2426 commissioner with information on a voluntary basis.
2427 (c) (i) The commissioner shall timely create and publish a list of reciprocal
2428 jurisdictions.
2429 (ii) (A) A list of reciprocal jurisdictions is published through the National Association
2430 of Insurance Commissioners' Committee Process.
2431 (B) The commissioner's list of reciprocal jurisdictions shall include any reciprocal
2432 jurisdiction as defined in this Subsection (8), and shall consider any other reciprocal
2433 jurisdictions in accordance with the criteria developed under rule made in accordance with
2434 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2435 (iii) (A) The commissioner may remove a jurisdiction from the list of reciprocal
2436 jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a
2437 reciprocal jurisdiction, in accordance with a process set forth in rule made in accordance with
2438 Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except that the commissioner shall
2439 not remove from the list a reciprocal jurisdiction.
2440 (B) Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance
2441 ceded to an assuming insurer which has its home office or is domiciled in that jurisdiction shall
2442 be allowed, if otherwise allowed under this chapter.
2443 (d) (i) The commissioner shall timely create and publish a list of assuming insurers that
2444 have satisfied the conditions set forth in this subsection and to which cessions shall be granted
2445 credit in accordance with this Subsection (8).
2446 (ii) The commissioner may add an assuming insurer to such list if a National
2447 Association of Insurance Commissioners accredited jurisdiction has added such assuming
2448 insurer to a list of such assuming insurers or if, upon initial eligibility, the assuming insurer
2449 submits the information to the commissioner as required under this Subsection (8) and
2450 complies with any additional requirements that the commissioner may impose by rule made in
2451 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except to the
2452 extent that they conflict with an applicable covered agreement.
2453 (e) (i) If the commissioner determines that an assuming insurer no longer meets one or
2454 more of the requirements under this Subsection (8), the commissioner may revoke or suspend
2455 the eligibility of the assuming insurer for recognition under this Subsection (8) in accordance
2456 with procedures established in rule made in accordance with Title 63G, Chapter 3, Utah
2457 Administrative Rulemaking Act.
2458 (ii) (A) While an assuming insurer's eligibility is suspended, no reinsurance agreement
2459 issued, amended, or renewed after the effective date of the suspension qualifies for credit
2460 except to the extent that the assuming insurer's obligations under the contract are secured in
2461 accordance with Subsection (10).
2462 (B) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be
2463 granted after the effective date of the revocation with respect to any reinsurance agreements
2464 entered into by the assuming insurer, including reinsurance agreements entered into prior to the
2465 date of revocation, except to the extent that the assuming insurer's obligations under the
2466 contract are secured in a form acceptable to the commissioner and consistent with the
2467 provisions of Subsection (10).
2468 (f) If subject to a legal process of rehabilitation, liquidation, or conservation, as
2469 applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by
2470 the court in which the proceedings are pending, may obtain an order requiring that the
2471 assuming insurer post security for all outstanding ceded liabilities.
2472 (g) Nothing in this Subsection (8) limits or in any way alters the capacity of parties to a
2473 reinsurance agreement to agree on requirements for security or other terms in that reinsurance
2474 agreement, except as expressly prohibited by this chapter or other applicable law or regulation.
2475 (h) (i) Credit may be taken under this Subsection (8) only for reinsurance agreements
2476 entered into, amended, or renewed on or after the effective date of the statute adding this
2477 Subsection (8), and only with respect to losses incurred and reserves reported on or after the
2478 later of:
2479 (A) the date on which the assuming insurer has met all eligibility requirements
2480 pursuant to Subsection (8)(b); and
2481 (B) the effective date of the new reinsurance agreement, amendment or renewal.
2482 (ii) This Subsection (8) does not alter or impair a ceding insurer's right to take credit
2483 for reinsurance, to the extent that credit is not available under this Subsection (8), as long as the
2484 reinsurance qualifies for credit under any other applicable provision of this chapter.
2485 (iii) Nothing in this Subsection (8) authorizes an assuming insurer to withdraw or
2486 reduce the security provided under any reinsurance agreement except as permitted by the terms
2487 of the agreement.
2488 (iv) Nothing in this Subsection (8) limits, or in any way alters, the capacity of parties to
2489 any reinsurance agreement to renegotiate the agreement.
2490 (9) If reinsurance is ceded to an assuming insurer not meeting the requirements of
2491 Subsection (3), (4), (5), (6), (7), or (8), a domestic ceding insurer is allowed credit only as to
2492 the insurance of a risk located in a jurisdiction where the reinsurance is required by applicable
2493 law or regulation of that jurisdiction.
2494 (10) (a) An asset or a reduction from liability for the reinsurance ceded by a domestic
2495 insurer to an assuming insurer not meeting the requirements of Subsection (3), (4), (5), (6), (7),
2496 or (8) shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer.
2497 (b) The commissioner may adopt by rule made in accordance with Title 63G, Chapter
2498 3, Utah Administrative Rulemaking Act, specific additional requirements relating to or setting
2499 forth:
2500 (i) the valuation of assets or reserve credits;
2501 (ii) the amount and forms of security supporting reinsurance arrangements; and
2502 (iii) the circumstances pursuant to which credit will be reduced or eliminated.
2503 (c) (i) The reduction shall be in the amount of funds held by or on behalf of the ceding
2504 insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with
2505 the assuming insurer as security for the payment of obligations thereunder, if the security is:
2506 (A) held in the United States subject to withdrawal solely by, and under the exclusive
2507 control of, the ceding insurer; or
2508 (B) in the case of a trust, held in a qualified United States financial institution.
2509 (ii) The security described in this Subsection (10)(c) may be in the form of:
2510 (A) cash;
2511 (B) securities listed by the Securities Valuation Office of the National Association of
2512 Insurance Commissioners, including those deemed exempt from filing as defined by the
2513 Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted
2514 assets;
2515 (C) clean, irrevocable, unconditional letters of credit, issued or confirmed by a
2516 qualified United States financial institution effective no later than December 31 of the year for
2517 which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or
2518 before the filing date of its annual statement;
2519 (D) letters of credit meeting applicable standards of issuer acceptability as of the dates
2520 of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's
2521 subsequent failure to meet applicable standards of issuer acceptability, continue to be
2522 acceptable as security until their expiration, extension, renewal, modification or amendment,
2523 whichever first occurs; or
2524 (E) any other form of security acceptable to the commissioner.
2525 [
2526 assuming insurer under the reinsurance contract submits to the jurisdiction of Utah courts by:
2527 (a) (i) being an admitted insurer; and
2528 (ii) submitting to jurisdiction under Section 31A-2-309;
2529 (b) having irrevocably appointed the commissioner as the domestic ceding insurer's
2530 agent for service of process in an action arising out of or in connection with the reinsurance,
2531 which appointment is made under Section 31A-2-309; or
2532 (c) agreeing in the reinsurance contract:
2533 (i) that if the assuming insurer fails to perform its obligations under the terms of the
2534 reinsurance contract, the assuming insurer, at the request of the ceding insurer, shall:
2535 (A) submit to the jurisdiction of a court of competent jurisdiction in a state of the
2536 United States;
2537 (B) comply with all requirements necessary to give the court jurisdiction; and
2538 (C) abide by the final decision of the court or of an appellate court in the event of an
2539 appeal; and
2540 (ii) to designate the commissioner or a specific attorney licensed to practice law in this
2541 state as its attorney upon whom may be served lawful process in an action, suit, or proceeding
2542 instituted by or on behalf of the ceding company.
2543 [
2544 does not override a duty or right of a party under the reinsurance contract, including a
2545 requirement that the parties arbitrate their disputes.
2546 [
2547 (4), [
2548 unless the assuming insurer agrees in the trust instrument to the following conditions:
2549 (a) (i) Notwithstanding any other provision in the trust instrument, if an event
2550 described in Subsection [
2551 (A) an order of the commissioner with regulatory oversight over the trust; or
2552 (B) an order of a court of competent jurisdiction directing the trustee to transfer to the
2553 commissioner with regulatory oversight all of the assets of the trust fund.
2554 (ii) This Subsection [
2555 (A) the trust fund is inadequate because the trust contains an amount less than the
2556 amount required by Subsection (6)(d); or
2557 (B) the grantor of the trust is:
2558 (I) declared insolvent; or
2559 (II) placed into receivership, rehabilitation, liquidation, or similar proceeding under the
2560 laws of its state or country of domicile.
2561 (b) The assets of a trust fund described in Subsection [
2562 by and a claim shall be filed with and valued by the commissioner with regulatory oversight in
2563 accordance with the laws of the state in which the trust is domiciled that are applicable to the
2564 liquidation of a domestic insurance company.
2565 (c) If the commissioner with regulatory oversight determines that the assets of the trust
2566 fund, or any part of the assets, are not necessary to satisfy the claims of the one or more United
2567 States ceding insurers of the grantor of the trust, the assets, or a part of the assets, shall be
2568 returned by the commissioner with regulatory oversight to the trustee for distribution in
2569 accordance with the trust instrument.
2570 (d) A grantor shall waive any right otherwise available to it under United States law
2571 that is inconsistent with this Subsection [
2572 [
2573 accreditation or certification, the commissioner may suspend or revoke the reinsurer's
2574 accreditation or certification.
2575 (a) The commissioner shall give the reinsurer notice and opportunity for hearing.
2576 (b) The suspension or revocation may not take effect until after the commissioner's
2577 order after a hearing, unless:
2578 (i) the reinsurer waives its right to hearing;
2579 (ii) the commissioner's order is based on:
2580 (A) regulatory action by the reinsurer's domiciliary jurisdiction; or
2581 (B) the voluntary surrender or termination of the reinsurer's eligibility to transact
2582 insurance or reinsurance business in its domiciliary jurisdiction or primary certifying state
2583 under Subsection [
2584 (iii) the commissioner's finding that an emergency requires immediate action and a
2585 court of competent jurisdiction has not stayed the commissioner's action.
2586 (c) While a reinsurer's accreditation or certification is suspended, no reinsurance
2587 contract issued or renewed after the effective date of the suspension qualifies for credit except
2588 to the extent that the reinsurer's obligations under the contract are secured in accordance with
2589 Section 31A-17-404.1.
2590 (d) If a reinsurer's accreditation or certification is revoked, no credit for reinsurance
2591 may be granted after the effective date of the revocation except to the extent that the reinsurer's
2592 obligations under the contract are secured in accordance with Subsection [
2593 31A-17-404.1.
2594 [
2595 proportionate to its own book of business.
2596 (b) (i) A domestic ceding insurer shall notify the commissioner within 30 days after
2597 reinsurance recoverables from any single assuming insurer, or group of affiliated assuming
2598 insurers:
2599 (A) exceeds 50% of the domestic ceding insurer's last reported surplus to
2600 policyholders; or
2601 (B) after it is determined that reinsurance recoverables from any single assuming
2602 insurer, or group of affiliated assuming insurers, is likely to exceed 50% of the domestic ceding
2603 insurer's last reported surplus to policyholders.
2604 (ii) The notification required by Subsection [
2605 exposure is safely managed by the domestic ceding insurer.
2606 (c) A ceding insurer shall take steps to diversify its reinsurance program.
2607 (d) (i) A domestic ceding insurer shall notify the commissioner within 30 days after
2608 ceding or being likely to cede more than 20% of the ceding insurer's gross written premium in
2609 the prior calendar year to any:
2610 (A) single assuming insurer; or
2611 (B) group of affiliated assuming insurers.
2612 (ii) The notification shall demonstrate that the exposure is safely managed by the
2613 domestic ceding insurer.
2614 Section 14. Section 31A-17-404.3 is amended to read:
2615 31A-17-404.3. Rules.
2616 (1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
2617 this chapter, the commissioner may make rules prescribing:
2618 (a) the form of a letter of credit required under this chapter;
2619 (b) the requirements for a trust or trust instrument required by this chapter;
2620 (c) the procedures for licensing and accrediting;
2621 (d) minimum capital and surplus requirements;
2622 (e) additional requirements relating to calculation of credit allowed a domestic ceding
2623 insurer against reserves for reinsurance under Section 31A-17-404; and
2624 (f) additional requirements relating to calculation of asset reduction from liability for
2625 reinsurance ceded by a domestic insurer to other ceding insurers under Section 31A-17-404.1.
2626 (2) A rule made pursuant to Subsection (1)(e) or (f) may apply to reinsurance relating
2627 to:
2628 (a) a life insurance policy with guaranteed nonlevel gross premiums or guaranteed
2629 nonlevel benefits;
2630 (b) a universal life insurance policy with provisions resulting in the ability of a
2631 policyholder to keep a policy in force over a secondary guarantee period;
2632 (c) a variable annuity with guaranteed death or living benefits;
2633 (d) a long-term care insurance policy; or
2634 (e) such other life and health insurance or annuity product as to which the National
2635 Association of Insurance Commissioners adopts model regulatory requirements with respect
2636 for credit for reinsurance.
2637 (3) A rule adopted pursuant to Subsection (1)(e) or (f) may apply to a treaty containing:
2638 (a) a policy issued on or after January 1, 2015; and
2639 (b) a policy issued before January 1, 2015, if risk pertaining to the policy is ceded in
2640 connection with the treaty, either in whole or in part, on or after January 1, 2015.
2641 (4) A rule adopted pursuant to Subsection (1)(e) or (f) may require the ceding insurer,
2642 in calculating the amounts or forms of security required to be held under rules made under this
2643 section, to use the Valuation Manual adopted by the National Association of Insurance
2644 Commissioners under Section 11B(1) of the National Association of Insurance Commissioners
2645 Standard Valuation Law, including all amendments adopted by the National Association of
2646 Insurance Commissioners and in effect on the date as of which the calculation is made, to the
2647 extent applicable.
2648 (5) A rule adopted pursuant to Subsection (1)(e) or (f) may not apply to cessions to an
2649 assuming insurer that:
2650 (a) meets the conditions established in Subsection 31A-17-404(8);
2651 [
2652
2653
2654 [
2655 accordance with the National Association of Insurance Commissioners Accounting Practices
2656 and Procedures Manual, including all amendments thereto adopted by the National Association
2657 of Insurance Commissioners, excluding the impact of any permitted or prescribed practices and
2658 is:
2659 (i) licensed in at least 26 states; or
2660 (ii) licensed in at least 10 states, and licensed or accredited in a total of at least 35
2661 states.
2662 (6) The authority to adopt rules pursuant to Subsection (1)(e) or (f) does not otherwise
2663 limit the commissioner's general authority to make rules pursuant to Subsection (1).
2664 Section 15. Section 31A-17-601 is amended to read:
2665 31A-17-601. Definitions.
2666 As used in this part:
2667 (1) "Adjusted RBC report" means an RBC report that has been adjusted by the
2668 commissioner in accordance with Subsection 31A-17-602(5).
2669 (2) "Corrective order" means an order issued by the commissioner specifying
2670 corrective action that the commissioner determines is required.
2671 (3) "Health organization" means:
2672 (a) an entity that is authorized under Chapter 7, Nonprofit Health Service Insurance
2673 Corporations, or Chapter 8, Health Maintenance Organizations and Limited Health Plans; and
2674 (b) that is:
2675 (i) a health maintenance organization;
2676 (ii) a limited health service organization;
2677 (iii) a dental or vision plan;
2678 (iv) a hospital, medical, and dental indemnity or service corporation; or
2679 (v) other managed care organization.
2680 (4) "Life or accident and health insurer" means:
2681 (a) an insurance company licensed to write life insurance, disability insurance, or both;
2682 or
2683 (b) a licensed property casualty insurer writing only disability insurance.
2684 (5) "Property and casualty insurer" means any insurance company licensed to write
2685 lines of insurance other than life but does not include a monoline mortgage guaranty insurer,
2686 financial guaranty insurer, or title insurer.
2687 (6) "RBC" means risk-based capital.
2688 (7) "RBC instructions" means the RBC report including the National Association of
2689 Insurance Commissioner's risk-based capital instructions [
2690 that govern the year for which an RBC report is prepared.
2691 (8) "RBC level" means an insurer's or health organization's authorized control level
2692 RBC, company action level RBC, mandatory control level RBC, or regulatory action level
2693 RBC.
2694 (a) "Authorized control level RBC" means the number determined under the risk-based
2695 capital formula in accordance with the RBC instructions;
2696 (b) "Company action level RBC" means the product of 2.0 and its authorized control
2697 level RBC;
2698 (c) "Mandatory control level RBC" means the product of .70 and the authorized control
2699 level RBC; and
2700 (d) "Regulatory action level RBC" means the product of 1.5 and its authorized control
2701 level RBC.
2702 (9) (a) "RBC plan" means a comprehensive financial plan containing the elements
2703 specified in Subsection 31A-17-603(2).
2704 (b) Notwithstanding Subsection (9)(a), the plan is a "revised RBC plan" if:
2705 (i) the commissioner rejects the RBC plan; and
2706 (ii) the plan is revised by the insurer or health organization, with or without the
2707 commissioner's recommendation.
2708 (10) "RBC report" means the report required in Section 31A-17-602.
2709 Section 16. Section 31A-19a-404 is amended to read:
2710 31A-19a-404. Designated rate service organization.
2711 (1) For purposes of workers' compensation insurance, the commissioner shall designate
2712 one rate service organization to:
2713 (a) develop and administer the uniform statistical plan, uniform classification plan, and
2714 uniform experience rating plan filed with and approved by the commissioner;
2715 (b) assist the commissioner in gathering, compiling, and reporting relevant statistical
2716 information on an aggregate basis;
2717 (c) develop and file manual rules, subject to the approval of the commissioner, that are
2718 reasonably related to the recording and reporting of data pursuant to the uniform statistical
2719 plan, uniform experience rating plan, and the uniform classification plan; and
2720 (d) develop and file the [
2721 31A-19a-406.
2722 (2) The uniform experience rating plan shall:
2723 (a) contain reasonable eligibility standards;
2724 (b) provide adequate incentives for loss prevention; and
2725 (c) provide for sufficient premium differentials so as to encourage safety.
2726 (3) Each workers' compensation insurer, directly or through its selected rate service
2727 organization, shall:
2728 (a) record and report its workers' compensation experience to the designated rate
2729 service organization as set forth in the uniform statistical plan approved by the commissioner;
2730 and
2731 (b) adhere to a uniform classification plan and uniform experience rating plan filed
2732 with the commissioner by the rate service organization designated by the commissioner[
2733 [
2734
2735 (4) The commissioner may adopt rules for:
2736 (a) the development and administration by the designated rate service organization of
2737 the:
2738 (i) uniform statistical plan;
2739 (ii) uniform experience rating plan; and
2740 (iii) uniform classification plan;
2741 (b) the recording and reporting of statistical data and experience rating data by the
2742 various insurers writing workers' compensation insurance;
2743 (c) the selection, retention, and termination of the designated rate service organization;
2744 and
2745 (d) providing for the equitable sharing and recovery of the expense of the designated
2746 rate service organization to develop, maintain, and provide the plans, services, and filings that
2747 are used by the various insurers writing workers' compensation insurance.
2748 (5) (a) Notwithstanding Subsection (3), an insurer may develop directly or through its
2749 selected rate service organization subclassifications of the uniform classification system upon
2750 which a rate may be made.
2751 (b) A subclassification shall be filed with the commissioner 30 days before its use.
2752 (c) The commissioner shall disapprove subclassifications if the insurer fails to
2753 demonstrate that the data produced by the subclassifications can be reported consistently with
2754 the uniform statistical plan and uniform classification plan.
2755 (6) Notwithstanding Subsection (3), an insurer may, directly or though its selected rate
2756 service organization, develop its own experience modifications based on the uniform statistical
2757 plan, uniform classification plan, and uniform rating plan filed by the rate service organization
2758 designated by the commissioner under Subsection (1).
2759 Section 17. Section 31A-19a-405 is amended to read:
2760 31A-19a-405. Filing of rates and other rating information.
2761 (1) (a) All workers' compensation rates, supplementary rate information, and supporting
2762 information shall be filed at least 30 days before the effective date of the rate or information.
2763 (b) Notwithstanding Subsection (1)(a), on application by the filer, the commissioner
2764 may authorize an earlier effective date.
2765 (2) The loss and loss adjustment expense factors included in the rates filed under
2766 Subsection (1) shall be:
2767 (a) the [
2768 organization under Section 31A-19a-406[
2769 (b) a percent modification of the advisory loss costs filed by the designated rate service
2770 organization under Section 31A-19a-406.
2771 (3) A modification filed under Subsection (2)(b) shall be accompanied by adequate
2772 support as required by Part 2, General Rate Regulation.
2773 Section 18. Section 31A-19a-406 is amended to read:
2774 31A-19a-406. Filing requirements for designated rate service organization.
2775 (1) The rate service organization designated under Section 31A-19a-404 shall file with
2776 the commissioner the following items proposed for use in this state at least 30 calendar days
2777 before the [
2778 others:
2779 (a) each [
2780 (b) the uniform classification plan and rating manual;
2781 (c) the uniform experience rating plan manual;
2782 (d) the uniform statistical plan manual; and
2783 (e) each change, amendment, or modification of any of the items listed in Subsections
2784 (1)(a) through (d).
2785 (2) (a) If the commissioner believes that [
2786 the excessive, inadequate, or unfair discriminatory standard in Section 31A-19a-201 or any
2787 other applicable requirement of this part, the commissioner may require that the rate service
2788 organization file additional supporting information.
2789 (b) If, after reviewing the supporting information, the commissioner determines that
2790 the [
2791 (i) require that adjustments to the [
2792 (ii) call a hearing for any purpose regarding the filing.
2793 Section 19. Section 31A-21-201 is amended to read:
2794 31A-21-201. Filing of forms.
2795 (1) (a) Except as exempted under Subsections 31A-21-101(2) through (6), a form may
2796 not be used, sold, or offered for sale until the form is filed with the commissioner.
2797 (b) A form is considered filed with the commissioner when the commissioner receives:
2798 (i) the form;
2799 (ii) the applicable filing fee as prescribed under Section 31A-3-103; and
2800 (iii) the applicable transmittal forms as required by the commissioner.
2801 (2) In filing a form for use in this state the insurer is responsible for assuring that the
2802 form is in compliance with this title and rules adopted by the commissioner.
2803 (3) (a) The commissioner may prohibit the use of a form at any time upon a finding
2804 that:
2805 (i) the form:
2806 (A) is inequitable;
2807 (B) is unfairly discriminatory;
2808 (C) is misleading;
2809 (D) is deceptive;
2810 (E) is obscure;
2811 (F) is unfair;
2812 (G) encourages misrepresentation; or
2813 (H) is not in the public interest;
2814 (ii) the form provides benefits or contains another provision that endangers the solidity
2815 of the insurer;
2816 (iii) except for a life or accident and health insurance policy form, the form is an
2817 insurance policy or application for an insurance policy, that fails to conspicuously, as defined
2818 by rule, provide:
2819 (A) the exact name of the insurer; and
2820 (B) the state of domicile of the insurer filing the insurance policy or application for the
2821 insurance policy;
2822 [
2823
2824 insurance policy form that fails to conspicuously, as defined by rule, provide:
2825 (A) the exact name of the insurer;
2826 (B) the state of domicile of the insurer filing the insurance policy or application for the
2827 insurance policy; and
2828 (C) for a life insurance [
2829 administrative office of the insurer filing the [
2830
2831 [
2832 [
2833 (b) (i) When the commissioner prohibits the use of a form under Subsection (3)(a), the
2834 commissioner may order that, on or before a date not less than 15 days after the order, the use
2835 of the form be discontinued.
2836 (ii) Once use of a form is prohibited, the form may not be used until appropriate
2837 changes are filed with and reviewed by the commissioner.
2838 (iii) When the commissioner prohibits the use of a form under Subsection (3)(a), the
2839 commissioner may require the insurer to disclose contract deficiencies to the existing
2840 policyholders.
2841 (c) If the commissioner prohibits use of a form under this Subsection (3), the
2842 prohibition shall:
2843 (i) be in writing;
2844 (ii) constitute an order; and
2845 (iii) state the reasons for the prohibition.
2846 (4) (a) If, after a hearing, the commissioner determines that it is in the public interest,
2847 the commissioner may require by rule or order that a form be subject to the commissioner's
2848 approval before its use.
2849 (b) The rule or order described in Subsection (4)(a) shall prescribe the filing
2850 procedures for a form if the procedures are different from the procedures stated in this section.
2851 (c) The type of form that under Subsection (4)(a) the commissioner may require
2852 approval of before use includes:
2853 (i) a form for a particular class of insurance;
2854 (ii) a form for a specific line of insurance;
2855 (iii) a specific type of form; or
2856 (iv) a form for a specific market segment.
2857 (5) (a) An insurer shall maintain a complete and accurate record of the following for
2858 the time period described in Subsection (5)(b):
2859 (i) a form:
2860 (A) filed under this section for use; or
2861 (B) that is in use; and
2862 (ii) a document filed under this section with a form described in Subsection (5)(a)(i).
2863 (b) The insurer shall maintain a record required under Subsection (5)(a) for the balance
2864 of the current year, plus five years from:
2865 (i) the last day on which the form is used; or
2866 (ii) the last day an insurance policy that is issued using the form is in effect.
2867 Section 20. Section 31A-21-301 is amended to read:
2868 31A-21-301. Clauses required to be in a prominent position.
2869 (1) The following portions of insurance policies shall appear conspicuously in the
2870 policy:
2871 (a) as required by [
2872 (i) the exact name of the insurer;
2873 (ii) the state of domicile of the insurer; and
2874 (iii) for life insurance and annuity policies only, the address of the administrative office
2875 of the insurer;
2876 (b) information that two or more insurers under Subsection (1)(a) undertake only
2877 several liability, as required by Section 31A-21-306;
2878 (c) if a policy is assessable, a statement of that;
2879 (d) a statement that benefits are variable, as required by Section 31A-22-411; however,
2880 the methods of calculation need not be in a prominent position;
2881 (e) the right to return a life or accident and health insurance policy under Sections
2882 31A-22-423 and 31A-22-606; and
2883 (f) the beginning and ending dates of insurance protection.
2884 (2) Each clause listed in Subsection (1) shall be displayed conspicuously and separately
2885 from any other clause.
2886 Section 21. Section 31A-21-313 is amended to read:
2887 31A-21-313. Limitation of actions.
2888 (1) (a) An action on a written policy or contract of first party insurance shall be
2889 commenced within three years after the inception of the loss.
2890 (b) The inception of the loss on a fidelity bond is the date the insurer first denies all or
2891 part of a claim made under the fidelity bond.
2892 (2) Except as provided in Subsection (1) or elsewhere in this title, the law applicable to
2893 limitation of actions in Title 78B, Chapter 2, Statutes of Limitations, applies to actions on
2894 insurance policies.
2895 (3) An insurance policy may not:
2896 (a) limit the time for beginning an action on the policy to a time less than that
2897 authorized by statute;
2898 (b) prescribe in what court an action may be brought on the policy; or
2899 (c) provide that no action may be brought, subject to permissible arbitration provisions
2900 in contracts.
2901 (4) (a) Unless by verified complaint it is alleged that prejudice to the complainant will
2902 arise from a delay in bringing suit against an insurer, which prejudice is other than the delay
2903 itself, no action may be brought against an insurer on an insurance policy to compel payment
2904 under the policy until the earlier of:
2905 [
2906 [
2907 [
2908 (B) for an accident and health insurance policy, the insurer's denial of payment.
2909 (b) Under an accident and health insurance policy, an insurer may not require the
2910 completion of an appeals process that exceeds the provisions in 29 C.F.R. Sec. 2560.503-1 to
2911 bring suit under this Subsection (4).
2912 (5) The period of limitation is tolled during the period in which the parties conduct an
2913 appraisal or arbitration procedure prescribed by the insurance policy, by law, or as agreed to by
2914 the parties.
2915 Section 22. Section 31A-22-412 is amended to read:
2916 31A-22-412. Assignment of life insurance rights.
2917 (1) As used in this section, "final termination of a policy" means the day after which an
2918 insurer will not reinstate a policy without requiring:
2919 (a) evidence of insurability; or
2920 (b) written application.
2921 [
2922 life insurance policy or annuity contract may assign any of those rights, including any right to
2923 designate a beneficiary and the rights secured under Sections 31A-22-517 through 31A-22-521
2924 and any other provision of this title.
2925 (b) An assignment, valid under general contract law, vests the assigned rights in the
2926 assignee, subject, so far as reasonably necessary for the protection of the insurer, to any
2927 provisions in the insurance policy or annuity contract inserted to protect the insurer against
2928 double payment or obligation.
2929 [
2930 subordinate to those of an assignee, unless the beneficiary was designated as an irrevocable
2931 beneficiary prior to the assignment.
2932 [
2933 contract which provides annuities as retirement benefits related to employment contracts.
2934 [
2935
2936
2937
2938 any cancellation notice sent with respect to the policy[
2939 (i) written notice of the assignment;
2940 (ii) the name and address of the assignee; and
2941 (iii) a request for assignment notice from the assignee.
2942 (b) An insurer shall mail the cancellation notice described in Subsection (5)(a):
2943 (i) [
2944 filed with the insured[
2945 (ii) not less than 10 days [
2946 (iii) each time the insured [
2947 payment to the insurer before the commencement of the policy's grace period.
2948 (c) The insurer may charge the insured directly or charge against the policy the
2949 reasonable cost of complying with this section, but in no event to exceed $5 for each notice.
2950 [
2951
2952
2953 [
2954 under Subsection [
2955 notices sent to the owner of the life insurance policy, provided these notices comply with the
2956 other requirements of this title.
2957 Section 23. Section 31A-22-413 is amended to read:
2958 31A-22-413. Designation of beneficiary.
2959 (1) Subject to Subsection 31A-22-412[
2960 contract may restrict the right of a policyholder or certificate holder:
2961 (a) to make an irrevocable designation of beneficiary effective immediately or at some
2962 subsequent time; or
2963 (b) if the designation of beneficiary is not explicitly irrevocable, to change the
2964 beneficiary without the consent of the previously designated beneficiary. Subsection
2965 75-6-201(1)(c) applies to designations by will or by separate writing.
2966 (2) (a) An insurer may prescribe formalities to be complied with for the change of
2967 beneficiaries, but those formalities may only be designed for the protection of the insurer.
2968 Notwithstanding Section 75-2-804, the insurer discharges its obligation under the insurance
2969 policy or certificate of insurance if it pays the properly designated beneficiary unless it has
2970 actual notice of either an assignment or a change in beneficiary designation made pursuant to
2971 Subsection (1)(b).
2972 (b) The insurer has actual notice if the formalities prescribed by the policy are
2973 complied with, or if the change in beneficiary has been requested in the form prescribed by the
2974 insurer and delivered to an agent representing the insurer at least three days prior to payment to
2975 the earlier properly designated beneficiary.
2976 Section 24. Section 31A-22-505 is amended to read:
2977 31A-22-505. Association groups.
2978 (1) A policy is subject to the requirements of this section if the policy is issued as
2979 policyholder to an association or to the trustees of a fund established, created, or maintained for
2980 the benefit of members of one or more associations:
2981 (a) with a minimum membership of 100 persons;
2982 (b) with a constitution and bylaws;
2983 (c) having a shared [
2984
2985 (i) is the same profession, trade, occupation, or similar; or
2986 (ii) is by some common economic or representation of interest or genuine
2987 organizational relationship unrelated to the provision of benefits; and
2988 (d) that has been in active existence for at least two years.
2989 (2) The policy may insure members and employees of the association, employees of the
2990 members, one or more of the preceding entities, or all of any classes of these named entities for
2991 the benefit of persons other than the employees' employer, or any officials, representatives,
2992 trustees, or agents of the employer or association.
2993 (3) (a) The premiums shall be paid by:
2994 (i) the policyholder from funds contributed by the associations[
2995 (ii) employer members, from funds contributed by the covered persons[
2996 (iii) from any combination of [
2997 (b) Except as provided under Section 31A-22-512, a policy on which no part of the
2998 premium is contributed by the covered persons, specifically for their insurance, is required to
2999 insure all eligible persons.
3000 Section 25. Section 31A-22-610.5 is amended to read:
3001 31A-22-610.5. Dependent coverage.
3002 (1) As used in this section, "child" has the same meaning as defined in Section
3003 78B-12-102.
3004 (2) (a) Any individual or group accident and health insurance policy or managed care
3005 organization contract that provides coverage for a policyholder's or certificate holder's
3006 dependent:
3007 (i) may not terminate coverage of an unmarried dependent by reason of the dependent's
3008 age before the dependent's 26th birthday; and
3009 (ii) shall, upon application, provide coverage for all unmarried dependents up to age
3010 26.
3011 (b) The cost of coverage for unmarried dependents 19 to 26 years of age shall be
3012 included in the premium on the same basis as other dependent coverage.
3013 (c) This section does not prohibit the employer from requiring the employee to pay all
3014 or part of the cost of coverage for unmarried dependents.
3015 (d) An individual or group health insurance policy or managed care organization shall
3016 continue in force coverage for a dependent through the last day of the month in which the
3017 dependent ceases to be a dependent:
3018 (i) if premiums are paid; and
3019 (ii) notwithstanding Sections 31A-22-618.6 and 31A-22-618.7.
3020 (3) (a) When a parent is required by a court or administrative order to provide health
3021 insurance coverage for a child, an accident and health insurer may not deny enrollment of a
3022 child under the accident and health insurance plan of the child's parent on the grounds the
3023 child:
3024 (i) was born out of wedlock and is entitled to coverage under Subsection (4);
3025 (ii) was born out of wedlock and the custodial parent seeks enrollment for the child
3026 under the custodial parent's policy;
3027 (iii) is not claimed as a dependent on the parent's federal tax return; [
3028 (iv) does not reside with the parent; or
3029 (v) does not reside in the insurer's service area.
3030 (b) A child enrolled as required under Subsection (3)(a)(iv) is subject to the terms of
3031 the accident and health insurance plan contract pertaining to services received outside of an
3032 insurer's service area.
3033 (4) When a child has accident and health coverage through an insurer of a noncustodial
3034 parent, and when requested by the noncustodial or custodial parent, the insurer shall:
3035 (a) provide information to the custodial parent as necessary for the child to obtain
3036 benefits through that coverage, but the insurer or employer, or the agents or employees of either
3037 of them, are not civilly or criminally liable for providing information in compliance with this
3038 Subsection (4)(a), whether the information is provided pursuant to a verbal or written request;
3039 (b) permit the custodial parent or the service provider, with the custodial parent's
3040 approval, to submit claims for covered services without the approval of the noncustodial
3041 parent; and
3042 (c) make payments on claims submitted in accordance with Subsection (4)(b) directly
3043 to the custodial parent, the child who obtained benefits, the provider, or the state Medicaid
3044 agency.
3045 (5) When a parent is required by a court or administrative order to provide health
3046 coverage for a child, and the parent is eligible for family health coverage, the insurer shall:
3047 (a) permit the parent to enroll, under the family coverage, a child who is otherwise
3048 eligible for the coverage without regard to an enrollment season restrictions;
3049 (b) if the parent is enrolled but fails to make application to obtain coverage for the
3050 child, enroll the child under family coverage upon application of the child's other parent, the
3051 state agency administering the Medicaid program, or the state agency administering 42 U.S.C.
3052 Sec. 651 through 669, the child support enforcement program; and
3053 (c) (i) when the child is covered by an individual policy, not disenroll or eliminate
3054 coverage of the child unless the insurer is provided satisfactory written evidence that:
3055 (A) the court or administrative order is no longer in effect; or
3056 (B) the child is or will be enrolled in comparable accident and health coverage through
3057 another insurer which will take effect not later than the effective date of disenrollment; or
3058 (ii) when the child is covered by a group policy, not disenroll or eliminate coverage of
3059 the child unless the employer is provided with satisfactory written evidence, which evidence is
3060 also provided to the insurer, that Subsection (8)(c)(i), (ii), or (iii) has happened.
3061 (6) An insurer may not impose requirements on a state agency that has been assigned
3062 the rights of an individual eligible for medical assistance under Medicaid and covered for
3063 accident and health benefits from the insurer that are different from requirements applicable to
3064 an agent or assignee of any other individual so covered.
3065 (7) Insurers may not reduce their coverage of pediatric vaccines below the benefit level
3066 in effect on May 1, 1993.
3067 (8) When a parent is required by a court or administrative order to provide health
3068 coverage, which is available through an employer doing business in this state, the employer
3069 shall:
3070 (a) permit the parent to enroll under family coverage any child who is otherwise
3071 eligible for coverage without regard to any enrollment season restrictions;
3072 (b) if the parent is enrolled but fails to make application to obtain coverage of the child,
3073 enroll the child under family coverage upon application by the child's other parent, by the state
3074 agency administering the Medicaid program, or the state agency administering 42 U.S.C. Sec.
3075 651 through 669, the child support enforcement program;
3076 (c) not disenroll or eliminate coverage of the child unless the employer is provided
3077 satisfactory written evidence that:
3078 (i) the court order is no longer in effect;
3079 (ii) the child is or will be enrolled in comparable coverage which will take effect no
3080 later than the effective date of disenrollment; or
3081 (iii) the employer has eliminated family health coverage for all of its employees; and
3082 (d) withhold from the employee's compensation the employee's share, if any, of
3083 premiums for health coverage and to pay this amount to the insurer.
3084 (9) An order issued under Section 62A-11-326.1 may be considered a "qualified
3085 medical support order" for the purpose of enrolling a dependent child in a group accident and
3086 health insurance plan as defined in Section 609(a), Federal Employee Retirement Income
3087 Security Act of 1974.
3088 (10) This section does not affect any insurer's ability to require as a precondition of any
3089 child being covered under any policy of insurance that:
3090 (a) the parent continues to be eligible for coverage;
3091 (b) the child shall be identified to the insurer with adequate information to comply with
3092 this section; and
3093 (c) the premium shall be paid when due.
3094 (11) This section applies to employee welfare benefit plans as defined in Section
3095 26-19-102.
3096 (12) (a) A policy that provides coverage to a child of a group member may not deny
3097 eligibility for coverage to a child solely because:
3098 (i) the child does not reside with the insured; or
3099 (ii) the child is solely dependent on a former spouse of the insured rather than on the
3100 insured.
3101 (b) A child who does not reside with the insured may be excluded on the same basis as
3102 a child who resides with the insured.
3103 Section 26. Section 31A-22-615.5 is amended to read:
3104 31A-22-615.5. Insurance coverage for opioids -- Policies -- Reports.
3105 (1) For purposes of this section:
3106 (a) "Health care provider" means an individual, other than a veterinarian, who:
3107 (i) is licensed to prescribe a controlled substance under Title 58, Chapter 37, Utah
3108 Controlled Substances Act; and
3109 (ii) possesses the authority, in accordance with the individual's scope of practice, to
3110 prescribe Schedule II controlled substances and Schedule III controlled substances that are
3111 applicable to opioids and benzodiazapines.
3112 (b) "Health insurer" means:
3113 (i) an insurer who offers health care insurance as that term is defined in Section
3114 31A-1-301;
3115 (ii) health benefits offered to state employees under Section 49-20-202; and
3116 (iii) a workers' compensation insurer:
3117 (A) authorized to provide workers' compensation insurance in the state; or
3118 (B) that is a self-insured employer as [
3119 (c) "Opioid" has the same meaning as "opiate," as that term is defined in Section
3120 58-37-2.
3121 (d) "Prescribing policy" means a policy developed by a health insurer that includes
3122 evidence based guidelines for prescribing opioids, and may include the 2016 Center for Disease
3123 Control Guidelines for Prescribing Opioids for Chronic Pain, or the Utah Clinical Guidelines
3124 on Prescribing Opioids for the treatment of pain.
3125 (2) A health insurer that provides prescription drug coverage may enact a policy to
3126 minimize the risk of opioid addiction and overdose from:
3127 (a) chronic co-prescription of opioids with benzodiazapines and other sedating
3128 substances;
3129 (b) prescription of very high dose opioids in the primary care setting; and
3130 (c) the inadvertent transition of short-term opioids for an acute injury into long-term
3131 opioid dependence.
3132 (3) A health insurer that provides prescription drug coverage may enact policies to
3133 facilitate:
3134 (a) non-narcotic treatment alternatives for patients who have chronic pain; and
3135 (b) medication-assisted treatment for patients who have opioid dependence disorder.
3136 (4) The requirements of this section apply to insurance plans entered into or renewed
3137 on or after July 1, 2017.
3138 (5) (a) A health insurer subject to this section shall on or before [
3139 July 15, 2020, and before each [
3140 Utah Insurance Department regarding whether the insurer has adopted a policy and a general
3141 description of the policy.
3142 (b) The Utah Insurance Department shall, on or before October 1, 2017, and before
3143 each October 1 thereafter, submit a written summary of the information under Subsection (5)(a)
3144 to the Health and Human Services Interim Committee.
3145 (6) A health insurer subject to this section may share the policies developed under this
3146 section with other health insurers and the public.
3147 (7) This section sunsets in accordance with Section 63I-1-231.
3148 Section 27. Section 31A-22-2001 is enacted to read:
3149
3150 31A-22-2001. Title.
3151 This part is known as the "Limited Long-Term Care Insurance Act."
3152 Section 28. Section 31A-22-2002 is enacted to read:
3153 31A-22-2002. Definitions.
3154 As used in this part:
3155 (1) "Applicant" means:
3156 (a) when referring to an individual limited long-term care insurance policy, the person
3157 who seeks to contract for benefits; and
3158 (b) when referring to a group limited long-term care insurance policy, the proposed
3159 certificate holder.
3160 (2) "Elimination period" means the length of time between meeting the eligibility for
3161 benefit payment and receiving benefit payments from an insurer.
3162 (3) "Group limited long-term care insurance" means a limited long-term care insurance
3163 policy that is delivered or issued for delivery:
3164 (a) in this state; and
3165 (b) to an eligible group, as described under Subsection 31A-22-701(2).
3166 (4) (a) "Limited long-term care insurance" means an insurance:
3167 (i) policy, endorsement, or rider that is advertised, marketed, offered, or designed to
3168 provide coverage:
3169 (A) for less than 12 consecutive months for each covered person;
3170 (B) on an expense-incurred, indemnity, prepaid or other basis; and
3171 (C) for one or more necessary or medically necessary diagnostic, preventative,
3172 therapeutic, rehabilitative, maintenance, or personal care services that is provided in a setting
3173 other than an acute care unit of a hospital; or
3174 (ii) policy or rider that provides for payment of benefits based on cognitive impairment
3175 or the loss of functional capacity.
3176 (b) "Limited long-term care insurance" does not include an insurance policy that is
3177 offered primarily to provide:
3178 (i) basic Medicare supplement coverage;
3179 (ii) basic hospital expense coverage;
3180 (iii) basic medical-surgical expense coverage;
3181 (iv) hospital confinement indemnity coverage;
3182 (v) major medical expense coverage;
3183 (vi) disability income or related asset-protection coverage;
3184 (vii) accidental only coverage;
3185 (viii) specified disease or specified accident coverage; or
3186 (ix) limited benefit health coverage.
3187 (5) "Preexisting condition" means a condition for which medical advice or treatment is
3188 recommended:
3189 (a) by, or received from, a provider of health care services; and
3190 (b) within six months before the day on which the coverage of an insured person
3191 becomes effective.
3192 (6) "Waiting period" means the time an insured waits before some or all of the
3193 insured's coverage becomes effective.
3194 Section 29. Section 31A-22-2003 is enacted to read:
3195 31A-22-2003. Scope.
3196 (1) The requirements of this part apply to limited long-term care insurance policies and
3197 certificates marketed, delivered, or issued for delivery in this state on or after July 1, 2020.
3198 (2) Laws and regulations designed or intended to apply to Medicare supplement
3199 insurance policies may not be applied to limited long-term care insurance.
3200 Section 30. Section 31A-22-2004 is enacted to read:
3201 31A-22-2004. Disclosure and performance standards for limited long-term care
3202 insurance.
3203 (1) A limited long-term care insurance policy may not:
3204 (a) be cancelled, nonrenewed, or otherwise terminated because of the age, gender, or
3205 the deterioration of the mental or physical health of the insured individual or certificate holder;
3206 (b) contain a provision establishing a new waiting period if existing coverage is
3207 converted to or replaced by a new or other form within the same insurer, or the insurer's
3208 affiliates, except with respect to an increase in benefits voluntarily selected by the insured
3209 individual or group policyholder; or
3210 (c) provide coverage for skilled nursing care only or provide significantly more
3211 coverage for skilled care in a facility than coverage for lower levels of care.
3212 (2) (a) A limited long-term care insurance policy or certificate may not:
3213 (i) use a definition of "preexisting condition" that is more restrictive than the definition
3214 under this part; or
3215 (ii) exclude coverage for a loss or confinement that is the result of a preexisting
3216 condition, unless the loss or confinement begins within six months after the day on which the
3217 coverage of the insured person becomes effective.
3218 (b) A preexisting condition does not prohibit an insurer from:
3219 (i) using an application form designed to elicit the complete health history of an
3220 applicant; or
3221 (ii) on the basis of the answers on the application described in Subsection (2)(c)(i),
3222 underwriting in accordance with the insurer's established underwriting standards.
3223 (c) (i) Unless otherwise provided in the policy or certificate, an insurer may exclude
3224 coverage of a preexisting condition:
3225 (A) for a time period of six months, beginning the day on which the coverage of the
3226 insured person becomes effective; and
3227 (B) regardless of whether the preexisting condition is disclosed on the application.
3228 (ii) A limited long-term care insurance policy or certificate may not exclude or use
3229 waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically
3230 named or described preexisting diseases or physical conditions for more than a time period of
3231 six months, beginning the day on which the coverage of the insured person becomes effective.
3232 (3) (a) An insurer may not deliver or issue for delivery a limited long-term care
3233 insurance policy that conditions eligibility for any benefits:
3234 (i) on a prior hospitalization requirement;
3235 (ii) provided in an institutional care setting, on the receipt of a higher level of
3236 institutional care; or
3237 (iii) other than waiver of premium, post-confinement, post-acute care, or recuperative
3238 benefits, on a prior institutionalization requirement.
3239 (b) A limited long-term care insurance policy or rider may not condition eligibility for
3240 noninstitutional benefits on the prior or continuing receipt of skilled care services.
3241 (4) (a) If, after examination of a policy, certificate, or rider, a limited long-term care
3242 insurance applicant is not satisfied for any reason, the applicant has the right to:
3243 (i) within 30 days after the day on which the applicant receives the policy, certificate,
3244 endorsement, or rider, return the policy, certificate, endorsement, or rider to the company or a
3245 producer of the company; and
3246 (ii) have the premium refunded.
3247 (b) (i) Each limited long-term care insurance policy, certificate, endorsement, and rider
3248 shall:
3249 (A) have a notice prominently printed on the first page or attached thereto detailing
3250 specific instructions to accomplish a return; and
3251 (B) include the following free-look statement or language substantially similar: "You
3252 have 30 days from the day on which you receive this policy certificate, endorsement, or rider to
3253 review it and return it to the company if you decide not to keep it. You do not have to tell the
3254 company why you are returning it. If you decide not to keep it, simply return it to the company
3255 at its administrative office. Or you may return it to the producer that you bought it from. You
3256 must return it within 30 days of the day you first received it. The company will refund the full
3257 amount of any premium paid within 30 days after it receives the returned policy, certificate, or
3258 rider. The premium refund will be sent directly to the person who paid it. The policy certificate
3259 or rider will be void as if it had never been issued."
3260 (ii) The requirements described in Subsection (4)(b)(i) do not apply to a certificate
3261 issued to an employee under an employer group limited long-term care insurance policy.
3262 (5) (a) (i) An insurer shall deliver an outline of coverage to a prospective applicant for
3263 limited long-term care insurance at the time of initial solicitation through means that
3264 prominently direct the attention of the recipient to the document and the document's purpose.
3265 (ii) In the case of an agent solicitation, the agent shall deliver the outline of coverage
3266 before the presentation of an application or enrollment form.
3267 (iii) In the case of a direct response solicitation, the outline of coverage shall be
3268 presented in conjunction with any application or enrollment form.
3269 (iv) (A) In the case of a policy issued to a group, the outline of coverage is not required
3270 to be delivered if the information described in Subsections (5)(b)(i) through (iii) is contained in
3271 other materials relating to enrollment, including the certificate.
3272 (B) Upon request, an insurer shall make the other materials described in this
3273 Subsection (5)(a)(iv) available to the commissioner.
3274 (b) An outline of coverage shall include:
3275 (i) a description of the principal benefits and coverage provided in the policy;
3276 (ii) a description of the eligibility triggers for benefits and how the eligibility triggers
3277 are met;
3278 (iii) a statement of the principal exclusions, reductions, and limitations contained in the
3279 policy;
3280 (iv) a statement of the terms under which the policy or certificate, or both, may be
3281 continued in force or discontinued, including any reservation in the policy of a right to change
3282 premium.
3283 (v) a specific description of each continuation or conversion provision of group
3284 coverage;
3285 (vi) a statement that the outline of coverage is a summary only, not a contract of
3286 insurance, and that the policy or group master policy contains governing contractual provisions;
3287 (vii) a description of the terms under which a person may return the policy or
3288 certificate and have the premium refunded;
3289 (viii) a brief description of the relationship of cost of care and benefits; and
3290 (ix) a statement that discloses to the policyholder or certificate holder that the policy is
3291 not long-term care insurance.
3292 (6) A certificate pursuant to a group limited long-term care insurance policy that is
3293 delivered or issued for delivery in this state shall include:
3294 (a) a description of the principal benefits and coverage provided in the policy;
3295 (b) a statement of the principal exclusions, reductions, and limitations contained in the
3296 policy; and
3297 (c) a statement that the group master policy determines governing contractual
3298 provisions.
3299 (7) If an application for a limited long-term care insurance contract or certificate is
3300 approved, the issuer shall deliver the contract or certificate of insurance to the applicant no
3301 later that 30 days after the day on which the application is approved.
3302 Section 31. Section 31A-22-2005 is enacted to read:
3303 31A-22-2005. Nonforfeiture benefits.
3304 (1) (a) A limited long-term care insurance policy may offer the option of purchasing a
3305 policy or certificate including a nonforfeiture benefit.
3306 (b) The offer of a nonforfeiture benefit may be in the form of a rider that is attached to
3307 the policy.
3308 (c) In the event the policy holder or certificate holder does not purchase a nonforfeiture
3309 benefit, the insurer shall provide a contingent benefit upon lapse that shall be available for a
3310 specified period of time following a substantial increase in premium rates.
3311 (2) If an insurer issues a group limited long-term care insurance policy, the insurer
3312 shall:
3313 (a) make any offer of a nonforfeiture benefit to the group policyholder; and
3314 (b) make any offer to each proposed certificate holder.
3315 Section 32. Section 31A-22-2006 is enacted to read:
3316 31A-22-2006. Rulemaking.
3317 In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
3318 commissioner:
3319 (1) shall makes rules:
3320 (a) in the event of a substantial rate increase, promoting premium adequacy and
3321 protecting the policy holder;
3322 (b) establishing minimum standards for limited long-term care insurance marketing
3323 practices, producer compensation, producer testing, independent review of benefit
3324 determinations, penalties, and reporting practices;
3325 (c) prescribing a standard format, including style, arrangement, and overall appearance
3326 of an outline of coverage;
3327 (d) prescribing the content of an outline of coverage, in accordance with the
3328 requirements described in Subsection 31A-22-2004(5)(b);
3329 (e) specifying the type of nonforfeiture benefits offered as part of a limited long-term
3330 care insurance policy or certificate;
3331 (f) establishing the standards of nonforfeiture benefits; and
3332 (g) establishing the rules regarding contingent benefits upon lapse, including:
3333 (i) a determination of the specified period of time during which a contingent benefit
3334 upon lapse will be available; and
3335 (ii) the substantial premium rate increase that triggers a contingent benefit upon lapse
3336 as described in Subsection 31A-22-2005(1); and
3337 (2) may make rules establishing loss-ratio standards for limited long-term care
3338 insurance policies.
3339 Section 33. Section 31A-23a-111 is amended to read:
3340 31A-23a-111. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
3341 terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
3342 (1) A license type issued under this chapter remains in force until:
3343 (a) revoked or suspended under Subsection (5);
3344 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
3345 administrative action;
3346 (c) the licensee dies or is adjudicated incompetent as defined under:
3347 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
3348 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
3349 Minors;
3350 (d) lapsed under Section 31A-23a-113; or
3351 (e) voluntarily surrendered.
3352 (2) The following may be reinstated within one year after the day on which the license
3353 is no longer in force:
3354 (a) a lapsed license; or
3355 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
3356 not be reinstated after the license period in which the license is voluntarily surrendered.
3357 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
3358 license, submission and acceptance of a voluntary surrender of a license does not prevent the
3359 department from pursuing additional disciplinary or other action authorized under:
3360 (a) this title; or
3361 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
3362 Administrative Rulemaking Act.
3363 (4) A line of authority issued under this chapter remains in force until:
3364 (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
3365 or
3366 (b) the supporting license type:
3367 (i) is revoked or suspended under Subsection (5);
3368 (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
3369 administrative action;
3370 (iii) lapses under Section 31A-23a-113; or
3371 (iv) is voluntarily surrendered; or
3372 (c) the licensee dies or is adjudicated incompetent as defined under:
3373 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
3374 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
3375 Minors.
3376 (5) (a) If the commissioner makes a finding under Subsection (5)(b), as part of an
3377 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
3378 commissioner may:
3379 (i) revoke:
3380 (A) a license; or
3381 (B) a line of authority;
3382 (ii) suspend for a specified period of 12 months or less:
3383 (A) a license; or
3384 (B) a line of authority;
3385 (iii) limit in whole or in part:
3386 (A) a license; or
3387 (B) a line of authority;
3388 (iv) deny a license application;
3389 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
3390 (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
3391 Subsection (5)(a)(v).
3392 (b) The commissioner may take an action described in Subsection (5)(a) if the
3393 commissioner finds that the licensee or license applicant:
3394 (i) is unqualified for a license or line of authority under Section 31A-23a-104,
3395 31A-23a-105, or 31A-23a-107;
3396 (ii) violates:
3397 (A) an insurance statute;
3398 (B) a rule that is valid under Subsection 31A-2-201(3); or
3399 (C) an order that is valid under Subsection 31A-2-201(4);
3400 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
3401 delinquency proceedings in any state;
3402 (iv) fails to pay a final judgment rendered against the person in this state within 60
3403 days after the day on which the judgment became final;
3404 (v) fails to meet the same good faith obligations in claims settlement that is required of
3405 admitted insurers;
3406 (vi) is affiliated with and under the same general management or interlocking
3407 directorate or ownership as another insurance producer that transacts business in this state
3408 without a license;
3409 (vii) refuses:
3410 (A) to be examined; or
3411 (B) to produce its accounts, records, and files for examination;
3412 (viii) has an officer who refuses to:
3413 (A) give information with respect to the insurance producer's affairs; or
3414 (B) perform any other legal obligation as to an examination;
3415 (ix) provides information in the license application that is:
3416 (A) incorrect;
3417 (B) misleading;
3418 (C) incomplete; or
3419 (D) materially untrue;
3420 (x) violates an insurance law, valid rule, or valid order of another regulatory agency in
3421 any jurisdiction;
3422 (xi) obtains or attempts to obtain a license through misrepresentation or fraud;
3423 (xii) improperly withholds, misappropriates, or converts money or properties received
3424 in the course of doing insurance business;
3425 (xiii) intentionally misrepresents the terms of an actual or proposed:
3426 (A) insurance contract;
3427 (B) application for insurance; or
3428 (C) life settlement;
3429 (xiv) has been convicted of:
3430 (A) a felony; or
3431 (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
3432 (xv) admits or is found to have committed an insurance unfair trade practice or fraud;
3433 (xvi) in the conduct of business in this state or elsewhere:
3434 (A) uses fraudulent, coercive, or dishonest practices; or
3435 (B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
3436 (xvii) has had an insurance license or other professional or occupational license, or an
3437 equivalent to an insurance license or registration, or other professional or occupational license
3438 or registration:
3439 (A) denied;
3440 (B) suspended;
3441 (C) revoked; or
3442 (D) surrendered to resolve an administrative action;
3443 (xviii) forges another's name to:
3444 (A) an application for insurance; or
3445 (B) a document related to an insurance transaction;
3446 (xix) improperly uses notes or another reference material to complete an examination
3447 for an insurance license;
3448 (xx) knowingly accepts insurance business from an individual who is not licensed;
3449 (xxi) fails to comply with an administrative or court order imposing a child support
3450 obligation;
3451 (xxii) fails to:
3452 (A) pay state income tax; or
3453 (B) comply with an administrative or court order directing payment of state income
3454 tax;
3455 (xxiii) has been convicted of violating the federal Violent Crime Control and Law
3456 Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
3457 in the business of insurance or participate in such business as required by 18 U.S.C. Sec. 1033;
3458 (xxiv) engages in a method or practice in the conduct of business that endangers the
3459 legitimate interests of customers and the public; or
3460 (xxv) has been convicted of any criminal felony involving dishonesty or breach of trust
3461 and has not obtained written consent to engage in the business of insurance or participate in
3462 such business as required by 18 U.S.C. Sec. 1033.
3463 (c) For purposes of this section, if a license is held by an agency, both the agency itself
3464 and any individual designated under the license are considered to be the holders of the license.
3465 (d) If an individual designated under the agency license commits an act or fails to
3466 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
3467 the commissioner may suspend, revoke, or limit the license of:
3468 (i) the individual;
3469 (ii) the agency, if the agency:
3470 (A) is reckless or negligent in its supervision of the individual; or
3471 (B) knowingly participates in the act or failure to act that is the ground for suspending,
3472 revoking, or limiting the license; or
3473 (iii) (A) the individual; and
3474 (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
3475 (6) A licensee under this chapter is subject to the penalties for acting as a licensee
3476 without a license if:
3477 (a) the licensee's license is:
3478 (i) revoked;
3479 (ii) suspended;
3480 (iii) limited;
3481 (iv) surrendered in lieu of administrative action;
3482 (v) lapsed; or
3483 (vi) voluntarily surrendered; and
3484 (b) the licensee:
3485 (i) continues to act as a licensee; or
3486 (ii) violates the terms of the license limitation.
3487 (7) A licensee under this chapter shall immediately report to the commissioner:
3488 (a) a revocation, suspension, or limitation of the person's license in another state, the
3489 District of Columbia, or a territory of the United States;
3490 (b) the imposition of a disciplinary sanction imposed on that person by another state,
3491 the District of Columbia, or a territory of the United States; or
3492 (c) a judgment or injunction entered against that person on the basis of conduct
3493 involving:
3494 (i) fraud;
3495 (ii) deceit;
3496 (iii) misrepresentation; or
3497 (iv) a violation of an insurance law or rule.
3498 (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
3499 license in lieu of administrative action may specify a time, not to exceed five years, within
3500 which the former licensee may not apply for a new license.
3501 (b) If no time is specified in an order or agreement described in Subsection (8)(a), the
3502 former licensee may not apply for a new license for five years from the day on which the order
3503 or agreement is made without the express approval by the commissioner.
3504 (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
3505 a license issued under this part if so ordered by a court.
3506 (10) The commissioner shall by rule prescribe the license renewal and reinstatement
3507 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
3508 Section 34. Section 31A-23a-205 is amended to read:
3509 31A-23a-205. Special requirements for bail bond producers and bail bond
3510 enforcement agents.
3511 (1) As used in this section, "bail bond producer" and "bail enforcement agent" have the
3512 same definitions as in Section 31A-35-102.
3513 (2) A bail bond producer may not operate in this state without an appointment from
3514 one or more authorized bail bond surety insurers or licensed bail bond [
3515 (3) A bail bond enforcement agent may not operate in this state without an appointment
3516 from one or more licensed bail bond producers.
3517 Section 35. Section 31A-23a-415 is amended to read:
3518 31A-23a-415. Assessment on agency title insurance producers or title insurers --
3519 Account created.
3520 (1) For purposes of this section:
3521 (a) "Premium" is as [
3522 (b) "Title insurer" means a person:
3523 (i) making any contract or policy of title insurance as:
3524 (A) insurer;
3525 (B) guarantor; or
3526 (C) surety;
3527 (ii) proposing to make any contract or policy of title insurance as:
3528 (A) insurer;
3529 (B) guarantor; or
3530 (C) surety; or
3531 (iii) transacting or proposing to transact any phase of title insurance, including:
3532 (A) soliciting;
3533 (B) negotiating preliminary to execution;
3534 (C) executing of a contract of title insurance;
3535 (D) insuring; and
3536 (E) transacting matters subsequent to the execution of the contract and arising out of
3537 the contract.
3538 (c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
3539 personal property located in Utah, an owner of real or personal property, the holders of liens or
3540 encumbrances on that property, or others interested in the property against loss or damage
3541 suffered by reason of:
3542 (i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
3543 property; or
3544 (ii) invalidity or unenforceability of any liens or encumbrances on the property.
3545 (2) (a) The commissioner may assess each title insurer, each individual title insurance
3546 producer who is not an employee of a title insurer or who is not designated by an agency title
3547 insurance producer, and each agency title insurance producer an annual assessment:
3548 (i) determined by the Title and Escrow Commission:
3549 (A) after consultation with the commissioner; and
3550 (B) in accordance with this Subsection (2); and
3551 (ii) to be used for the purposes described in Subsection (3).
3552 (b) An agency title insurance producer and individual title insurance producer who is
3553 not an employee of a title insurer or who is not designated by an agency title insurance
3554 producer shall be assessed up to:
3555 (i) $250 for the first office in each county in which the agency title insurance producer
3556 or individual title insurance producer maintains an office; and
3557 (ii) $150 for each additional office the agency title insurance producer or individual
3558 title insurance producer maintains in the county described in Subsection (2)(b)(i).
3559 (c) A title insurer shall be assessed up to:
3560 (i) $250 for the first office in each county in which the title insurer maintains an office;
3561 (ii) $150 for each additional office the title insurer maintains in the county described in
3562 Subsection (2)(c)(i); and
3563 (iii) an amount calculated by:
3564 (A) aggregating the assessments imposed on:
3565 (I) agency title insurance producers and individual title insurance producers under
3566 Subsection (2)(b); and
3567 (II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
3568 (B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
3569 costs and expenses determined under Subsection (2)(d); and
3570 (C) multiplying:
3571 (I) the amount calculated under Subsection (2)(c)(iii)(B); and
3572 (II) the percentage of total premiums for title insurance on Utah risk that are premiums
3573 of the title insurer.
3574 (d) Notwithstanding Section 31A-3-103 and subject to Section 31A-2-404, the Title
3575 and Escrow Commission by rule shall establish the amount of costs and expenses described
3576 under Subsection (3) that will be covered by the assessment[
3577
3578 (e) (i) An individual licensed to practice law in Utah is exempt from the requirements
3579 of this Subsection (2) if that person issues 12 or less policies during a 12-month period.
3580 (ii) In determining the number of policies issued by an individual licensed to practice
3581 law in Utah for purposes of Subsection (2)(e)(i), if the individual issues a policy to more than
3582 one party to the same closing, the individual is considered to have issued only one policy.
3583 (3) (a) Money received by the state under this section shall be deposited into the Title
3584 Licensee Enforcement Restricted Account.
3585 (b) There is created in the General Fund a restricted account known as the "Title
3586 Licensee Enforcement Restricted Account."
3587 (c) The Title Licensee Enforcement Restricted Account shall consist of the money
3588 received by the state under this section.
3589 (d) The commissioner shall administer the Title Licensee Enforcement Restricted
3590 Account. Subject to appropriations by the Legislature, the commissioner shall use the money
3591 deposited into the Title Licensee Enforcement Restricted Account only to pay for a cost or
3592 expense incurred by the department in the administration, investigation, and enforcement of
3593 laws governing individual title insurance producers, agency title insurance producers, or title
3594 insurers.
3595 (e) An appropriation from the Title Licensee Enforcement Restricted Account is
3596 nonlapsing.
3597 (4) The assessment imposed by this section shall be in addition to any premium
3598 assessment imposed under Subsection 59-9-101(3).
3599 Section 36. Section 31A-23b-401 is amended to read:
3600 31A-23b-401. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
3601 terminating a license -- Rulemaking for renewal or reinstatement.
3602 (1) A license as a navigator under this chapter remains in force until:
3603 (a) revoked or suspended under Subsection (4);
3604 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
3605 administrative action;
3606 (c) the licensee dies or is adjudicated incompetent as defined under:
3607 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
3608 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
3609 Minors;
3610 (d) lapsed under this section; or
3611 (e) voluntarily surrendered.
3612 (2) The following may be reinstated within one year after the day on which the license
3613 is no longer in force:
3614 (a) a lapsed license; or
3615 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
3616 not be reinstated after the license period in which the license is voluntarily surrendered.
3617 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
3618 license, submission and acceptance of a voluntary surrender of a license does not prevent the
3619 department from pursuing additional disciplinary or other action authorized under:
3620 (a) this title; or
3621 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
3622 Administrative Rulemaking Act.
3623 (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
3624 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
3625 commissioner may:
3626 (i) revoke a license;
3627 (ii) suspend a license for a specified period of 12 months or less;
3628 (iii) limit a license in whole or in part;
3629 (iv) deny a license application;
3630 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
3631 (vi) take a combination of actions under Subsections (4)(a)(i) through (iv) and
3632 Subsection (4)(a)(v).
3633 (b) The commissioner may take an action described in Subsection (4)(a) if the
3634 commissioner finds that the licensee or license applicant:
3635 (i) is unqualified for a license under Section 31A-23b-204, 31A-23b-205, or
3636 31A-23b-206;
3637 (ii) violated:
3638 (A) an insurance statute;
3639 (B) a rule that is valid under Subsection 31A-2-201(3); or
3640 (C) an order that is valid under Subsection 31A-2-201(4);
3641 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
3642 delinquency proceedings in any state;
3643 (iv) failed to pay a final judgment rendered against the person in this state within 60
3644 days after the day on which the judgment became final;
3645 (v) refused:
3646 (A) to be examined; or
3647 (B) to produce its accounts, records, and files for examination;
3648 (vi) had an officer who refused to:
3649 (A) give information with respect to the navigator's affairs; or
3650 (B) perform any other legal obligation as to an examination;
3651 (vii) provided information in the license application that is:
3652 (A) incorrect;
3653 (B) misleading;
3654 (C) incomplete; or
3655 (D) materially untrue;
3656 (viii) violated an insurance law, valid rule, or valid order of another regulatory agency
3657 in any jurisdiction;
3658 (ix) obtained or attempted to obtain a license through misrepresentation or fraud;
3659 (x) improperly withheld, misappropriated, or converted money or properties received
3660 in the course of doing insurance business;
3661 (xi) intentionally misrepresented the terms of an actual or proposed:
3662 (A) insurance contract;
3663 (B) application for insurance; or
3664 (C) application for public program;
3665 (xii) has been convicted of:
3666 (A) a felony; or
3667 (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
3668 (xiii) admitted or is found to have committed an insurance unfair trade practice or
3669 fraud;
3670 (xiv) in the conduct of business in this state or elsewhere:
3671 (A) used fraudulent, coercive, or dishonest practices; or
3672 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
3673 (xv) has had an insurance license, navigator license, or other professional or
3674 occupational license or registration, or an equivalent of the same denied, suspended, revoked,
3675 or surrendered to resolve an administrative action;
3676 (xvi) forged another's name to:
3677 (A) an application for insurance;
3678 (B) a document related to an insurance transaction;
3679 (C) a document related to an application for a public program; or
3680 (D) a document related to an application for premium subsidies;
3681 (xvii) improperly used notes or another reference material to complete an examination
3682 for a license;
3683 (xviii) knowingly accepted insurance business from an individual who is not licensed;
3684 (xix) failed to comply with an administrative or court order imposing a child support
3685 obligation;
3686 (xx) failed to:
3687 (A) pay state income tax; or
3688 (B) comply with an administrative or court order directing payment of state income
3689 tax;
3690 (xxi) has been convicted of violating the federal Violent Crime Control and Law
3691 Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
3692 in the business of insurance or participate in such business as required by 18 U.S.C. Sec. 1033;
3693 (xxii) engaged in a method or practice in the conduct of business that endangered the
3694 legitimate interests of customers and the public; or
3695 (xxiii) has been convicted of any criminal felony involving dishonesty or breach of
3696 trust and has not obtained written consent to engage in the business of insurance or participate
3697 in such business as required by 18 U.S.C. Sec. 1033.
3698 (c) For purposes of this section, if a license is held by an agency, both the agency itself
3699 and any individual designated under the license are considered to be the holders of the license.
3700 (d) If an individual designated under the agency license commits an act or fails to
3701 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
3702 the commissioner may suspend, revoke, or limit the license of:
3703 (i) the individual;
3704 (ii) the agency, if the agency:
3705 (A) is reckless or negligent in its supervision of the individual; or
3706 (B) knowingly participates in the act or failure to act that is the ground for suspending,
3707 revoking, or limiting the license; or
3708 (iii) (A) the individual; and
3709 (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
3710 (5) A licensee under this chapter is subject to the penalties for acting as a licensee
3711 without a license if:
3712 (a) the licensee's license is:
3713 (i) revoked;
3714 (ii) suspended;
3715 (iii) surrendered in lieu of administrative action;
3716 (iv) lapsed; or
3717 (v) voluntarily surrendered; and
3718 (b) the licensee:
3719 (i) continues to act as a licensee; or
3720 (ii) violates the terms of the license limitation.
3721 (6) A licensee under this chapter shall immediately report to the commissioner:
3722 (a) a revocation, suspension, or limitation of the person's license in another state, the
3723 District of Columbia, or a territory of the United States;
3724 (b) the imposition of a disciplinary sanction imposed on that person by another state,
3725 the District of Columbia, or a territory of the United States; or
3726 (c) a judgment or injunction entered against that person on the basis of conduct
3727 involving:
3728 (i) fraud;
3729 (ii) deceit;
3730 (iii) misrepresentation; or
3731 (iv) a violation of an insurance law or rule.
3732 (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
3733 license in lieu of administrative action may specify a time, not to exceed five years, within
3734 which the former licensee may not apply for a new license.
3735 (b) If no time is specified in an order or agreement described in Subsection (7)(a), the
3736 former licensee may not apply for a new license for five years from the day on which the order
3737 or agreement is made without the express approval of the commissioner.
3738 (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
3739 a license issued under this chapter if so ordered by a court.
3740 (9) The commissioner shall by rule prescribe the license renewal and reinstatement
3741 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
3742 Section 37. Section 31A-25-208 is amended to read:
3743 31A-25-208. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
3744 terminating a license -- Rulemaking for renewal and reinstatement.
3745 (1) A license type issued under this chapter remains in force until:
3746 (a) revoked or suspended under Subsection (4);
3747 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
3748 administrative action;
3749 (c) the licensee dies or is adjudicated incompetent as defined under:
3750 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
3751 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
3752 Minors;
3753 (d) lapsed under Section 31A-25-210; or
3754 (e) voluntarily surrendered.
3755 (2) The following may be reinstated within one year after the day on which the license
3756 is no longer in force:
3757 (a) a lapsed license; or
3758 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
3759 not be reinstated after the license period in which the license is voluntarily surrendered.
3760 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
3761 license, submission and acceptance of a voluntary surrender of a license does not prevent the
3762 department from pursuing additional disciplinary or other action authorized under:
3763 (a) this title; or
3764 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
3765 Administrative Rulemaking Act.
3766 (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
3767 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
3768 commissioner may:
3769 (i) revoke a license;
3770 (ii) suspend a license for a specified period of 12 months or less;
3771 (iii) limit a license in whole or in part; or
3772 (iv) deny a license application.
3773 (b) The commissioner may take an action described in Subsection (4)(a) if the
3774 commissioner finds that the licensee or license applicant:
3775 (i) is unqualified for a license under Section 31A-25-202, 31A-25-203, or 31A-25-204;
3776 (ii) has violated:
3777 (A) an insurance statute;
3778 (B) a rule that is valid under Subsection 31A-2-201(3); or
3779 (C) an order that is valid under Subsection 31A-2-201(4);
3780 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
3781 delinquency proceedings in any state;
3782 (iv) fails to pay a final judgment rendered against the person in this state within 60
3783 days after the day on which the judgment became final;
3784 (v) fails to meet the same good faith obligations in claims settlement that is required of
3785 admitted insurers;
3786 (vi) is affiliated with and under the same general management or interlocking
3787 directorate or ownership as another third party administrator that transacts business in this state
3788 without a license;
3789 (vii) refuses:
3790 (A) to be examined; or
3791 (B) to produce its accounts, records, and files for examination;
3792 (viii) has an officer who refuses to:
3793 (A) give information with respect to the third party administrator's affairs; or
3794 (B) perform any other legal obligation as to an examination;
3795 (ix) provides information in the license application that is:
3796 (A) incorrect;
3797 (B) misleading;
3798 (C) incomplete; or
3799 (D) materially untrue;
3800 (x) has violated an insurance law, valid rule, or valid order of another regulatory
3801 agency in any jurisdiction;
3802 (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
3803 (xii) has improperly withheld, misappropriated, or converted money or properties
3804 received in the course of doing insurance business;
3805 (xiii) has intentionally misrepresented the terms of an actual or proposed:
3806 (A) insurance contract; or
3807 (B) application for insurance;
3808 (xiv) has been convicted of:
3809 (A) a felony; or
3810 (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
3811 (xv) has admitted or been found to have committed an insurance unfair trade practice
3812 or fraud;
3813 (xvi) in the conduct of business in this state or elsewhere has:
3814 (A) used fraudulent, coercive, or dishonest practices; or
3815 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
3816 (xvii) has had an insurance license or other professional or occupational license or
3817 registration, or an equivalent of the same, denied, suspended, revoked, or surrendered to
3818 resolve an administrative action;
3819 (xviii) has forged another's name to:
3820 (A) an application for insurance; or
3821 (B) a document related to an insurance transaction;
3822 (xix) has improperly used notes or any other reference material to complete an
3823 examination for an insurance license;
3824 (xx) has knowingly accepted insurance business from an individual who is not
3825 licensed;
3826 (xxi) has failed to comply with an administrative or court order imposing a child
3827 support obligation;
3828 (xxii) has failed to:
3829 (A) pay state income tax; or
3830 (B) comply with an administrative or court order directing payment of state income
3831 tax;
3832 (xxiii) [
3833 Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and [
3834 has not obtained written consent to engage in the business of insurance or participate in such
3835 business as required under 18 U.S.C. Sec. 1033 [
3836
3837 (xxiv) has engaged in methods and practices in the conduct of business that endanger
3838 the legitimate interests of customers and the public[
3839 (xxv) has been convicted of a criminal felony involving dishonesty or breach of trust
3840 and has not obtained written consent to engage in the business of insurance or participate in
3841 such business as required under 18 U.S.C. Sec. 1033.
3842 (c) For purposes of this section, if a license is held by an agency, both the agency itself
3843 and any individual designated under the license are considered to be the holders of the agency
3844 license.
3845 (d) If an individual designated under the agency license commits an act or fails to
3846 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
3847 the commissioner may suspend, revoke, or limit the license of:
3848 (i) the individual;
3849 (ii) the agency if the agency:
3850 (A) is reckless or negligent in its supervision of the individual; or
3851 (B) knowingly participated in the act or failure to act that is the ground for suspending,
3852 revoking, or limiting the license; or
3853 (iii) (A) the individual; and
3854 (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
3855 (5) A licensee under this chapter is subject to the penalties for acting as a licensee
3856 without a license if:
3857 (a) the licensee's license is:
3858 (i) revoked;
3859 (ii) suspended;
3860 (iii) limited;
3861 (iv) surrendered in lieu of administrative action;
3862 (v) lapsed; or
3863 (vi) voluntarily surrendered; and
3864 (b) the licensee:
3865 (i) continues to act as a licensee; or
3866 (ii) violates the terms of the license limitation.
3867 (6) A licensee under this chapter shall immediately report to the commissioner:
3868 (a) a revocation, suspension, or limitation of the person's license in any other state, the
3869 District of Columbia, or a territory of the United States;
3870 (b) the imposition of a disciplinary sanction imposed on that person by any other state,
3871 the District of Columbia, or a territory of the United States; or
3872 (c) a judgment or injunction entered against the person on the basis of conduct
3873 involving:
3874 (i) fraud;
3875 (ii) deceit;
3876 (iii) misrepresentation; or
3877 (iv) a violation of an insurance law or rule.
3878 (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
3879 license in lieu of administrative action may specify a time, not to exceed five years, within
3880 which the former licensee may not apply for a new license.
3881 (b) If no time is specified in the order or agreement described in Subsection (7)(a), the
3882 former licensee may not apply for a new license for five years from the day on which the order
3883 or agreement is made without the express approval of the commissioner.
3884 (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
3885 a license issued under this part if so ordered by the court.
3886 (9) The commissioner shall by rule prescribe the license renewal and reinstatement
3887 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
3888 Section 38. Section 31A-26-206 is amended to read:
3889 31A-26-206. Continuing education requirements.
3890 (1) Pursuant to this section, the commissioner shall by rule prescribe continuing
3891 education requirements for each class of license under Section 31A-26-204.
3892 (2) (a) The commissioner shall impose continuing education requirements in
3893 accordance with a two-year licensing period in which the licensee meets the requirements of
3894 this Subsection (2).
3895 (b) (i) Except as otherwise provided in this section, the continuing education
3896 requirements shall require:
3897 (A) that a licensee complete 24 credit hours of continuing education for every two-year
3898 licensing period;
3899 (B) that 3 of the 24 credit hours described in Subsection (2)(b)(i)(A) be ethics courses;
3900 and
3901 (C) that the licensee complete at least half of the required hours through classroom
3902 hours of insurance-related instruction.
3903 (ii) A continuing education hour completed in accordance with Subsection (2)(b)(i)
3904 may be obtained through:
3905 (A) classroom attendance;
3906 (B) home study;
3907 (C) watching a video recording;
3908 (D) experience credit; or
3909 (E) other methods provided by rule.
3910 (iii) Notwithstanding Subsections (2)(b)(i)(A) and (B), a title insurance adjuster is
3911 required to complete 12 credit hours of continuing education for every two-year licensing
3912 period, with 3 of the credit hours being ethics courses.
3913 (c) A licensee may obtain continuing education hours at any time during the two-year
3914 licensing period.
3915 (d) (i) A licensee is exempt from the continuing education requirements of this section
3916 if:
3917 (A) the licensee was first licensed before December 31, 1982;
3918 (B) the license does not have a continuous lapse for a period of more than one year,
3919 except for a license for which the licensee has had an exemption approved before May 11,
3920 2011;
3921 (C) the licensee requests an exemption from the department; and
3922 (D) the department approves the exemption.
3923 (ii) If the department approves the exemption under Subsection (2)(d)(i), the licensee is
3924 not required to apply again for the exemption.
3925 (e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
3926 commissioner shall by rule:
3927 (i) publish a list of insurance professional designations whose continuing education
3928 requirements can be used to meet the requirements for continuing education under Subsection
3929 (2)(b); and
3930 (ii) authorize a professional adjuster association to:
3931 (A) offer a qualified program for a classification of license on a geographically
3932 accessible basis; and
3933 (B) collect a reasonable fee for funding and administration of a qualified program,
3934 subject to the review and approval of the commissioner.
3935 (f) (i) A fee permitted under Subsection (2)(e)(ii)(B) that is charged to fund and
3936 administer a qualified program shall reasonably relate to the cost of administering the qualified
3937 program.
3938 (ii) Nothing in this section shall prohibit a provider of a continuing education program
3939 or course from charging a fee for attendance at a course offered for continuing education credit.
3940 (iii) A fee permitted under Subsection (2)(e)(ii)(B) that is charged for attendance at an
3941 association program may be less for an association member, on the basis of the member's
3942 affiliation expense, but shall preserve the right of a nonmember to attend without affiliation.
3943 (3) The continuing education requirements of this section apply only to a licensee who
3944 is an individual.
3945 (4) The continuing education requirements of this section do not apply to a member of
3946 the Utah State Bar.
3947 (5) The commissioner shall designate a course that satisfies the requirements of this
3948 section, including a course presented by an insurer.
3949 (6) A nonresident adjuster is considered to have satisfied this state's continuing
3950 education requirements if:
3951 (a) the nonresident adjuster satisfies the nonresident [
3952 continuing education requirements for a licensed insurance adjuster; and
3953 (b) on the same basis the nonresident adjuster's home state considers satisfaction of
3954 Utah's continuing education requirements for [
3955 continuing education requirements of the home state.
3956 (7) A licensee subject to this section shall keep documentation of completing the
3957 continuing education requirements of this section for two years after the end of the two-year
3958 licensing period to which the continuing education requirement applies.
3959 Section 39. Section 31A-26-213 is amended to read:
3960 31A-26-213. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
3961 terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
3962 (1) A license type issued under this chapter remains in force until:
3963 (a) revoked or suspended under Subsection (5);
3964 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
3965 administrative action;
3966 (c) the licensee dies or is adjudicated incompetent as defined under:
3967 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
3968 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
3969 Minors;
3970 (d) lapsed under Section 31A-26-214.5; or
3971 (e) voluntarily surrendered.
3972 (2) The following may be reinstated within one year after the day on which the license
3973 is no longer in force:
3974 (a) a lapsed license; or
3975 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
3976 not be reinstated after the license period in which it is voluntarily surrendered.
3977 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
3978 license, submission and acceptance of a voluntary surrender of a license does not prevent the
3979 department from pursuing additional disciplinary or other action authorized under:
3980 (a) this title; or
3981 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
3982 Administrative Rulemaking Act.
3983 (4) A license classification issued under this chapter remains in force until:
3984 (a) the qualifications pertaining to a license classification are no longer met by the
3985 licensee; or
3986 (b) the supporting license type:
3987 (i) is revoked or suspended under Subsection (5); or
3988 (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
3989 administrative action.
3990 (5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
3991 adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
3992 commissioner may:
3993 (i) revoke:
3994 (A) a license; or
3995 (B) a license classification;
3996 (ii) suspend for a specified period of 12 months or less:
3997 (A) a license; or
3998 (B) a license classification;
3999 (iii) limit in whole or in part:
4000 (A) a license; or
4001 (B) a license classification;
4002 (iv) deny a license application;
4003 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
4004 (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
4005 Subsection (5)(a)(v).
4006 (b) The commissioner may take an action described in Subsection (5)(a) if the
4007 commissioner finds that the licensee or license applicant:
4008 (i) is unqualified for a license or license classification under Section 31A-26-202,
4009 31A-26-203, 31A-26-204, or 31A-26-205;
4010 (ii) has violated:
4011 (A) an insurance statute;
4012 (B) a rule that is valid under Subsection 31A-2-201(3); or
4013 (C) an order that is valid under Subsection 31A-2-201(4);
4014 (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
4015 delinquency proceedings in any state;
4016 (iv) fails to pay a final judgment rendered against the person in this state within 60
4017 days after the judgment became final;
4018 (v) fails to meet the same good faith obligations in claims settlement that is required of
4019 admitted insurers;
4020 (vi) is affiliated with and under the same general management or interlocking
4021 directorate or ownership as another insurance adjuster that transacts business in this state
4022 without a license;
4023 (vii) refuses:
4024 (A) to be examined; or
4025 (B) to produce its accounts, records, and files for examination;
4026 (viii) has an officer who refuses to:
4027 (A) give information with respect to the insurance adjuster's affairs; or
4028 (B) perform any other legal obligation as to an examination;
4029 (ix) provides information in the license application that is:
4030 (A) incorrect;
4031 (B) misleading;
4032 (C) incomplete; or
4033 (D) materially untrue;
4034 (x) has violated an insurance law, valid rule, or valid order of another regulatory
4035 agency in any jurisdiction;
4036 (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
4037 (xii) has improperly withheld, misappropriated, or converted money or properties
4038 received in the course of doing insurance business;
4039 (xiii) has intentionally misrepresented the terms of an actual or proposed:
4040 (A) insurance contract; or
4041 (B) application for insurance;
4042 (xiv) has been convicted of:
4043 (A) a felony; or
4044 (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
4045 (xv) has admitted or been found to have committed an insurance unfair trade practice
4046 or fraud;
4047 (xvi) in the conduct of business in this state or elsewhere has:
4048 (A) used fraudulent, coercive, or dishonest practices; or
4049 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
4050 (xvii) has had an insurance license or other professional or occupational license or
4051 registration, or equivalent, denied, suspended, revoked, or surrendered to resolve an
4052 administrative action;
4053 (xviii) has forged another's name to:
4054 (A) an application for insurance; or
4055 (B) a document related to an insurance transaction;
4056 (xix) has improperly used notes or any other reference material to complete an
4057 examination for an insurance license;
4058 (xx) has knowingly accepted insurance business from an individual who is not
4059 licensed;
4060 (xxi) has failed to comply with an administrative or court order imposing a child
4061 support obligation;
4062 (xxii) has failed to:
4063 (A) pay state income tax; or
4064 (B) comply with an administrative or court order directing payment of state income
4065 tax;
4066 (xxiii) has been convicted of a violation of the federal Violent Crime Control and Law
4067 Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent in
4068 accordance with 18 U.S.C. Sec. 1033 to engage in the business of insurance or participate in
4069 such business;
4070 (xxiv) has engaged in methods and practices in the conduct of business that endanger
4071 the legitimate interests of customers and the public; or
4072 (xxv) has been convicted of any criminal felony involving dishonesty or breach of trust
4073 and has not obtained written consent in accordance with 18 U.S.C. Sec. 1033 to engage in the
4074 business of insurance or participate in such business.
4075 (c) For purposes of this section, if a license is held by an agency, both the agency itself
4076 and any individual designated under the license are considered to be the holders of the license.
4077 (d) If an individual designated under the agency license commits an act or fails to
4078 perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
4079 the commissioner may suspend, revoke, or limit the license of:
4080 (i) the individual;
4081 (ii) the agency, if the agency:
4082 (A) is reckless or negligent in its supervision of the individual; or
4083 (B) knowingly participated in the act or failure to act that is the ground for suspending,
4084 revoking, or limiting the license; or
4085 (iii) (A) the individual; and
4086 (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
4087 (6) A licensee under this chapter is subject to the penalties for conducting an insurance
4088 business without a license if:
4089 (a) the licensee's license is:
4090 (i) revoked;
4091 (ii) suspended;
4092 (iii) limited;
4093 (iv) surrendered in lieu of administrative action;
4094 (v) lapsed; or
4095 (vi) voluntarily surrendered; and
4096 (b) the licensee:
4097 (i) continues to act as a licensee; or
4098 (ii) violates the terms of the license limitation.
4099 (7) A licensee under this chapter shall immediately report to the commissioner:
4100 (a) a revocation, suspension, or limitation of the person's license in any other state, the
4101 District of Columbia, or a territory of the United States;
4102 (b) the imposition of a disciplinary sanction imposed on that person by any other state,
4103 the District of Columbia, or a territory of the United States; or
4104 (c) a judgment or injunction entered against that person on the basis of conduct
4105 involving:
4106 (i) fraud;
4107 (ii) deceit;
4108 (iii) misrepresentation; or
4109 (iv) a violation of an insurance law or rule.
4110 (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
4111 license in lieu of administrative action may specify a time not to exceed five years within
4112 which the former licensee may not apply for a new license.
4113 (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
4114 former licensee may not apply for a new license for five years without the express approval of
4115 the commissioner.
4116 (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
4117 a license issued under this part if so ordered by a court.
4118 (10) The commissioner shall by rule prescribe the license renewal and reinstatement
4119 procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
4120 Section 40. Section 31A-26-301.6 is amended to read:
4121 31A-26-301.6. Health care claims practices.
4122 (1) As used in this section:
4123 [
4124 [
4125 [
4126 [
4127 [
4128 [
4129 [
4130 (i) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
4131 (ii) Title 58, Occupations and Professions.
4132 [
4133 31A-1-301, and includes:
4134 (i) a health maintenance organization; and
4135 (ii) a third party administrator that is subject to this title, provided that nothing in this
4136 section may be construed as requiring a third party administrator to use its own funds to pay
4137 claims that have not been funded by the entity for which the third party administrator is paying
4138 claims.
4139 [
4140 directly in connection with a claim by virtue of:
4141 (i) an agreement between the insurer and the provider;
4142 (ii) a health insurance policy or contract of the insurer; or
4143 (iii) state or federal law.
4144 (2) An insurer shall timely pay every valid insurance claim submitted by a provider in
4145 accordance with this section.
4146 (3) (a) Except as provided in Subsection (4), within 30 days of the day on which the
4147 insurer receives a written claim, an insurer shall:
4148 (i) pay the claim; or
4149 (ii) deny the claim and provide a written explanation for the denial.
4150 (b) (i) Subject to Subsection (3)(b)(ii), the time period described in Subsection (3)(a)
4151 may be extended by 15 days if the insurer:
4152 (A) determines that the extension is necessary due to matters beyond the control of the
4153 insurer; and
4154 (B) before the end of the 30-day period described in Subsection (3)(a), notifies the
4155 provider and insured in writing of:
4156 (I) the circumstances requiring the extension of time; and
4157 (II) the date by which the insurer expects to pay the claim or deny the claim with a
4158 written explanation for the denial.
4159 (ii) If an extension is necessary due to a failure of the provider or insured to submit the
4160 information necessary to decide the claim:
4161 (A) the notice of extension required by this Subsection (3)(b) shall specifically describe
4162 the required information; and
4163 (B) the insurer shall give the provider or insured at least 45 days from the day on which
4164 the provider or insured receives the notice before the insurer denies the claim for failure to
4165 provide the information requested in Subsection (3)(b)(ii)(A).
4166 (4) (a) In the case of a claim for income replacement benefits, within 45 days of the day
4167 on which the insurer receives a written claim, an insurer shall:
4168 (i) pay the claim; or
4169 (ii) deny the claim and provide a written explanation of the denial.
4170 (b) Subject to Subsections (4)(d) and (e), the time period described in Subsection (4)(a)
4171 may be extended for 30 days if the insurer:
4172 (i) determines that the extension is necessary due to matters beyond the control of the
4173 insurer; and
4174 (ii) before the expiration of the 45-day period described in Subsection (4)(a), notifies
4175 the insured of:
4176 (A) the circumstances requiring the extension of time; and
4177 (B) the date by which the insurer expects to pay the claim or deny the claim with a
4178 written explanation for the denial.
4179 (c) Subject to Subsections (4)(d) and (e), the time period for complying with
4180 Subsection (4)(a) may be extended for up to an additional 30 days from the day on which the
4181 30-day extension period provided in Subsection (4)(b) ends if before the day on which the
4182 30-day extension period ends, the insurer:
4183 (i) determines that due to matters beyond the control of the insurer a decision cannot be
4184 rendered within the 30-day extension period; and
4185 (ii) notifies the insured of:
4186 (A) the circumstances requiring the extension; and
4187 (B) the date as of which the insurer expects to pay the claim or deny the claim with a
4188 written explanation for the denial.
4189 (d) A notice of extension under this Subsection (4) shall specifically explain:
4190 (i) the standards on which entitlement to a benefit is based; and
4191 (ii) the unresolved issues that prevent a decision on the claim.
4192 (e) If an extension allowed by Subsection (4)(b) or (c) is necessary due to a failure of
4193 the insured to submit the information necessary to decide the claim:
4194 (i) the notice of extension required by Subsection (4)(b) or (c) shall specifically
4195 describe the necessary information; and
4196 (ii) the insurer shall give the insured at least 45 days from the day on which the insured
4197 receives the notice before the insurer denies the claim for failure to provide the information
4198 requested in Subsection (4)(b) or (c).
4199 (5) If a period of time is extended as permitted under Subsection (3)(b), (4)(b), or
4200 (4)(c), due to an insured or provider failing to submit information necessary to decide a claim,
4201 the period for making the benefit determination shall be tolled from the date on which the
4202 notification of the extension is sent to the insured or provider until the date on which the
4203 insured or provider responds to the request for additional information.
4204 (6) An insurer shall pay all sums to the provider or insured that the insurer is obligated
4205 to pay on the claim, and provide a written explanation of the insurer's decision regarding any
4206 part of the claim that is denied within 20 days of receiving the information requested under
4207 Subsection (3)(b), (4)(b), or (4)(c).
4208 (7) (a) Whenever an insurer makes a payment to a provider on any part of a claim
4209 under this section, the insurer shall also send to the insured an explanation of benefits paid.
4210 (b) Whenever an insurer denies any part of a claim under this section, the insurer shall
4211 also send to the insured:
4212 (i) a written explanation of the part of the claim that was denied; and
4213 (ii) notice of the adverse benefit determination review process established under
4214 Section 31A-22-629.
4215 (c) This Subsection (7) does not apply to a person receiving benefits under the state
4216 Medicaid program as defined in Section 26-18-2, unless required by the Department of Health
4217 or federal law.
4218 (8) (a) [
4219 late fee shall be imposed on:
4220 (i) an insurer that fails to timely pay a claim in accordance with this section; and
4221 (ii) a provider that fails to timely provide information on a claim in accordance with
4222 this section.
4223 (b) For the first 90 days that a claim payment or a provider response to a request for
4224 information is late, the late fee shall be determined by multiplying together:
4225 (i) the total amount of the claim;
4226 (ii) the total number of days the response or the payment is late; and
4227 (iii) .1%.
4228 (c) For a claim payment or a provider response to a request for information that is 91 or
4229 more days late, the late fee shall be determined by adding together:
4230 (i) the late fee for a 90-day period under Subsection (8)(b); and
4231 (ii) the following multiplied together:
4232 (A) the total amount of the claim;
4233 (B) the total number of days the response or payment was late beyond the initial 90-day
4234 period; and
4235 (C) the rate of interest set in accordance with Section 15-1-1.
4236 (d) Any late fee paid or collected under this section shall be separately identified on the
4237 documentation used by the insurer to pay the claim.
4238 (e) For purposes of this Subsection (8), "late fee" does not include an amount that is
4239 less than $1.
4240 (9) Each insurer shall establish a review process to resolve claims-related disputes
4241 between the insurer and providers.
4242 (10) An insurer or person representing an insurer may not engage in any unfair claim
4243 settlement practice with respect to a provider. Unfair claim settlement practices include:
4244 (a) knowingly misrepresenting a material fact or the contents of an insurance policy in
4245 connection with a claim;
4246 (b) failing to acknowledge and substantively respond within 15 days to any written
4247 communication from a provider relating to a pending claim;
4248 (c) denying or threatening to deny the payment of a claim for any reason that is not
4249 clearly described in the insured's policy;
4250 (d) failing to maintain a payment process sufficient to comply with this section;
4251 (e) failing to maintain claims documentation sufficient to demonstrate compliance with
4252 this section;
4253 (f) failing, upon request, to give to the provider written information regarding the
4254 specific rate and terms under which the provider will be paid for health care services;
4255 (g) failing to timely pay a valid claim in accordance with this section as a means of
4256 influencing, intimidating, retaliating, or gaining an advantage over the provider with respect to
4257 an unrelated claim, an undisputed part of a pending claim, or some other aspect of the
4258 contractual relationship;
4259 (h) failing to pay the sum when required and as required under Subsection (8) when a
4260 violation has occurred;
4261 (i) threatening to retaliate or actual retaliation against a provider for the provider
4262 applying this section;
4263 (j) any material violation of this section; and
4264 (k) any other unfair claim settlement practice established in rule or law.
4265 (11) (a) The provisions of this section shall apply to each contract between an insurer
4266 and a provider for the duration of the contract.
4267 (b) Notwithstanding Subsection (11)(a), this section may not be the basis for a bad
4268 faith insurance claim.
4269 (c) Nothing in Subsection (11)(a) may be construed as limiting the ability of an insurer
4270 and a provider from including provisions in their contract that are more stringent than the
4271 provisions of this section.
4272 (12) (a) Pursuant to Chapter 2, Part 2, Duties and Powers of Commissioner, and
4273 beginning January 1, 2002, the commissioner may conduct examinations to determine an
4274 insurer's level of compliance with this section and impose sanctions for each violation.
4275 (b) The commissioner may adopt rules only as necessary to implement this section.
4276 (c) The commissioner may establish rules to facilitate the exchange of electronic
4277 confirmations when claims-related information has been received.
4278 (d) Notwithstanding Subsection (12)(b), the commissioner may not adopt rules
4279 regarding the review process required by Subsection (9).
4280 (13) Nothing in this section may be construed as limiting the collection rights of a
4281 provider under Section 31A-26-301.5.
4282 (14) Nothing in this section may be construed as limiting the ability of an insurer to:
4283 (a) recover any amount improperly paid to a provider or an insured:
4284 (i) in accordance with Section 31A-31-103 or any other provision of state or federal
4285 law;
4286 (ii) within 24 months of the amount improperly paid for a coordination of benefits
4287 error;
4288 (iii) within 12 months of the amount improperly paid for any other reason not
4289 identified in Subsection (14)(a)(i) or (ii); or
4290 (iv) within 36 months of the amount improperly paid when the improper payment was
4291 due to a recovery by Medicaid, Medicare, the Children's Health Insurance Program, or any
4292 other state or federal health care program;
4293 (b) take any action against a provider that is permitted under the terms of the provider
4294 contract and not prohibited by this section;
4295 (c) report the provider to a state or federal agency with regulatory authority over the
4296 provider for unprofessional, unlawful, or fraudulent conduct; or
4297 (d) enter into a mutual agreement with a provider to resolve alleged violations of this
4298 section through mediation or binding arbitration.
4299 (15) A health care provider may only seek recovery from the insurer for an amount
4300 improperly paid by the insurer within the same time frames as Subsections (14)(a) and (b).
4301 Section 41. Section 31A-27a-105 is amended to read:
4302 31A-27a-105. Jurisdiction -- Venue.
4303 (1) (a) A delinquency proceeding under this chapter may not be commenced by a
4304 person other than the commissioner of this state.
4305 (b) No court has jurisdiction to entertain, hear, or determine a delinquency proceeding
4306 commenced by any person other than the commissioner of this state.
4307 (2) Other than in accordance with this chapter, a court of this state has no jurisdiction
4308 to entertain, hear, or determine any complaint:
4309 (a) requesting the liquidation, rehabilitation, seizure, sequestration, or receivership of
4310 an insurer; or
4311 (b) requesting a stay, an injunction, a restraining order, or other relief preliminary to,
4312 incidental to, or relating to a delinquency proceeding.
4313 (3) (a) The receivership court, as of the commencement of a delinquency proceeding
4314 under this chapter, has exclusive jurisdiction of all property of the insurer, wherever located,
4315 including property located outside the territorial limits of the state.
4316 (b) The receivership court has original but not exclusive jurisdiction of all civil
4317 proceedings arising:
4318 (i) under this chapter; or
4319 (ii) in or related to a delinquency proceeding under this chapter.
4320 (4) In addition to other grounds for jurisdiction provided by the law of this state, a
4321 court of this state having jurisdiction of the subject matter has jurisdiction over a person served
4322 pursuant to the Utah Rules of Civil Procedure or other applicable provisions of law in an action
4323 brought by the receiver if the person served:
4324 (a) in an action resulting from or incident to a relationship with the insurer described in
4325 this Subsection (4)(a), is or has been an agent, broker, or other person who has at any time:
4326 (i) written a policy of insurance for an insurer against which a delinquency proceeding
4327 is instituted; or
4328 (ii) acted in any manner whatsoever on behalf of an insurer against which a
4329 delinquency proceeding is instituted;
4330 (b) in an action on or incident to a reinsurance contract described in this Subsection
4331 (4)(b):
4332 (i) is or has been an insurer or reinsurer who has at any time entered into the contract of
4333 reinsurance with an insurer against which a delinquency proceeding is instituted; or
4334 (ii) is an intermediary, agent, or broker of or for the reinsurer, or with respect to the
4335 contract;
4336 (c) in an action resulting from or incident to a relationship with the insurer described in
4337 this Subsection (4)(c), is or has been an officer, director, manager, trustee, organizer, promoter,
4338 or other person in a position of comparable authority or influence over an insurer against which
4339 a delinquency proceeding is instituted;
4340 (d) in an action concerning assets described in this Subsection (4)(d), is or was at the
4341 time of the institution of the delinquency proceeding against the insurer, holding assets in
4342 which the receiver claims an interest on behalf of the insurer; or
4343 (e) in any action on or incident to the obligation described in this Subsection (4)(e), is
4344 obligated to the insurer in any way whatsoever.
4345 (5) (a) Subject to Subsection (5)(b), service shall be made upon the person named in
4346 the petition in accordance with the Utah Rules of Civil Procedure.
4347 (b) In lieu of service under Subsection (5)(a), upon application to the receivership
4348 court, service may be made in such a manner as the receivership court directs whenever it is
4349 satisfactorily shown by the commissioner's affidavit:
4350 (i) in the case of a corporation, that the officers of the corporation cannot be served
4351 because they have departed from the state or have otherwise concealed themselves with intent
4352 to avoid service;
4353 (ii) in the case of an insurer whose business is conducted, at least in part, by an
4354 attorney-in-fact, managing general agent, or other similar entity including a reciprocal, Lloyd's
4355 association, or interinsurance exchange, that the individual attorney-in-fact, managing general
4356 agent, or other entity, or its officers of the corporate attorney-in-fact cannot be served because
4357 of the individual's departure or concealment; or
4358 (iii) in the case of a natural person, that the person cannot be served because of the
4359 person's departure or concealment.
4360 (6) If the receivership court on motion of any party finds that an action should as a
4361 matter of substantial justice be tried in a forum outside this state, the receivership court may
4362 enter an appropriate order to stay further proceedings on the action in this state.
4363 (7) (a) Nothing in this chapter deprives a reinsurer of any contractual right to pursue
4364 arbitration except:
4365 (i) as to a claim against the estate; and
4366 (ii) in regard to a contract rejected by the receiver under Section 31A-27a-113.
4367 (b) A party in arbitration may bring a claim or counterclaim against the estate, but the
4368 claim or counterclaim is subject to this chapter.
4369 (8) An action authorized by this chapter shall be brought in the Third District Court for
4370 Salt Lake County.
4371 (9) (a) At any time after an order is entered pursuant to Section 31A-27a-201,
4372 31A-27a-301, or 31A-27a-401, the commissioner or receiver may transfer the case to the
4373 county of the principal office of the person proceeded against.
4374 (b) In the event of a transfer under this Subsection (9), the court in which the
4375 proceeding is commenced shall, upon application of the commissioner or receiver, direct its
4376 clerk to transmit the court's file to the clerk of the court to which the case is to be transferred.
4377 (c) After a transfer under this Subsection (9), the proceeding shall be conducted in the
4378 same manner as if it had been commenced in the court to which the matter is transferred.
4379 (10) (a) Except as provided in Subsection (10)(c), a person may not intervene in a
4380 liquidation proceeding in this state for the purpose of seeking or obtaining payment of a
4381 judgment, lien, or other claim of any kind.
4382 (b) Except as provided in Subsection (10)(c), the claims procedure set for this chapter
4383 constitute the exclusive means for obtaining payment of claims from the liquidation estate.
4384 (c) (i) An affected guaranty association or the affected guaranty association's
4385 representative may intervene as a party as a matter of right and otherwise appear and participate
4386 in any court proceeding concerning a liquidation proceeding against an insurer.
4387 (ii) Intervention by an affected guaranty association or by an affected guaranty
4388 association's designated representative conferred by this Subsection (10)(c) may not constitute
4389 grounds to establish general personal jurisdiction by the courts of this state.
4390 (iii) An intervening affected guaranty association or the affected guaranty association's
4391 representative are subject to the receivership court's jurisdiction for the limited purpose for
4392 which the affected guaranty association intervenes.
4393 (11) (a) Notwithstanding the other provisions of this section, this chapter does not
4394 confer jurisdiction on the receivership court to resolve coverage disputes between an affected
4395 guaranty association and those asserting claims against the affected guaranty association
4396 resulting from the initiation of a receivership proceeding under this chapter, except to the
4397 extent that the affected guaranty association otherwise expressly consents to the jurisdiction of
4398 the receivership court pursuant to a plan of rehabilitation or liquidation that resolves its
4399 obligations to covered policyholders.
4400 (b) The determination of a dispute with respect to the statutory coverage obligations of
4401 an affected guaranty association by a court or administrative agency or body with jurisdiction
4402 in the affected guaranty association's state of domicile is binding and conclusive as to the
4403 affected guaranty association's claim in the liquidation proceeding.
4404 (12) Upon the request of the receiver, the receivership court or the presiding judge of
4405 the Third District Court for Salt Lake County may order that one judge hear all cases and
4406 controversies arising out of or related to the delinquency proceeding.
4407 (13) A delinquency proceeding is exempt from any program maintained for the early
4408 closure of civil actions.
4409 (14) In a proceeding, case, or controversy arising out of or related to a delinquency
4410 proceeding, to the extent there is a conflict between the Utah Rules of Civil Procedure and this
4411 chapter, the provisions of this chapter govern the proceeding, case, or controversy.
4412 Section 42. Section 31A-27a-501 is amended to read:
4413 31A-27a-501. Turnover of assets.
4414 (1) (a) If the receiver determines that funds or property in the possession of another
4415 person are rightfully the property of the estate, the receiver shall deliver to the person a written
4416 demand for immediate delivery of the funds or property:
4417 (i) referencing this section by number;
4418 (ii) referencing the court and docket number of the receivership action; and
4419 (iii) notifying the person that any claim of right to the funds or property by the person
4420 shall be presented to the receivership court within 20 days of the day on which the person
4421 receives the written demand.
4422 (b) (i) A person who holds funds or other property belonging to an entity subject to an
4423 order of receivership under this chapter shall deliver the funds or other property to the receiver
4424 on demand.
4425 (ii) If the person described in Subsection (1)(b)(i) alleges a right to retain the funds or
4426 other property, the person shall:
4427 (A) file [
4428 within 20 days of the day on which the person receives the demand that the funds or property
4429 be delivered to the receiver; and
4430 (B) serve a copy of the [
4431 (iii) The [
4432 receivership court as to:
4433 (A) the nature of the claim to the funds or property;
4434 (B) the alleged value of the property or amount of funds held; and
4435 (C) what action has been taken by the person to preserve any funds or to preserve and
4436 protect the property pending determination of the dispute.
4437 (c) The relinquishment of possession of funds or property by a person who receives a
4438 demand pursuant to this section is not a waiver of a right to make a claim in the receivership.
4439 (2) (a) If requested by the receiver, the receivership court shall hold a hearing to
4440 determine where and under what conditions the funds or property shall be held by a person
4441 described in Subsection (1) pending determination of a dispute concerning the funds or
4442 property.
4443 (b) The receivership court may impose the conditions the receivership court considers
4444 necessary or appropriate for the preservation of the funds or property until the receivership
4445 court can determine the validity of the person's claim to the funds or property.
4446 (c) If funds or property are allowed to remain in the possession of the person after
4447 demand made by the receiver, that person is strictly liable to the estate for any waste, loss, or
4448 damage to or diminution of value of the funds or property retained.
4449 (3) If a person files [
4450 as provided in Subsection (1), the receivership court shall hold a subsequent hearing to
4451 determine the entitlement of the person to the funds or property claimed by the receiver.
4452 (4) If a person fails to deliver the funds or property or to file the [
4453 described by Subsection (1) within the 20-day period, the receivership court may issue a
4454 summary order:
4455 (a) upon:
4456 (i) petition of the receiver; and
4457 (ii) a copy of the petition being served by the petitioner to that person;
4458 (b) directing the immediate delivery of the funds or property to the receiver; and
4459 (c) finding that the person waived all claims of right to the funds or property.
4460 (5) The liquidator shall reduce the assets to a degree of liquidity that is consistent with
4461 the effective execution of the liquidation.
4462 Section 43. Section 31A-30-117 is amended to read:
4463 31A-30-117. Patient Protection and Affordable Care Act -- Market transition.
4464 (1) (a) [
4465 The commissioner may adopt administrative rules in accordance with Title 63G, Chapter 3,
4466 Utah Administrative Rulemaking Act, that change the rating and underwriting requirements of
4467 this chapter as necessary to transition the insurance market to meet federal qualified health plan
4468 standards and rating practices under PPACA.
4469 (b) Administrative rules adopted by the commissioner under this section may include:
4470 (i) the regulation of health benefit plans as described in [
4471
4472 (ii) disclosure of records and information required by PPACA and state law.
4473 (c) (i) The commissioner shall establish by administrative rule one statewide open
4474 enrollment period that applies to the individual insurance market that is not on the PPACA
4475 certified individual exchange.
4476 (ii) The statewide open enrollment period:
4477 (A) may be shorter, but no longer than the open enrollment period established for the
4478 individual insurance market offered in the PPACA certified exchange; and
4479 (B) may not be extended beyond the dates of the open enrollment period established
4480 for the individual insurance market offered in the PPACA certified exchange.
4481 (2) A carrier that offers health benefit plans in the individual market that is not part of
4482 the individual PPACA certified exchange:
4483 (a) shall open enrollment:
4484 (i) during the statewide open enrollment period established in Subsection (1)(c); and
4485 (ii) at other times, for qualifying events, as determined by administrative rule adopted
4486 by the commissioner; and
4487 (b) may open enrollment at any time.
4488 (3) To the extent permitted by the Centers for Medicare and Medicaid Services policy,
4489 or federal regulation, the commissioner shall allow a health insurer to choose to continue
4490 coverage and individuals and small employers to choose to re-enroll in coverage in
4491 nongrandfathered health coverage that is not in compliance with market reforms required by
4492 PPACA.
4493 Section 44. Section 31A-30-118 is amended to read:
4494 31A-30-118. Patient Protection and Affordable Care Act -- State insurance
4495 mandates -- Cost of additional benefits.
4496 (1) (a) The commissioner shall identify a new mandated benefit that is in excess of the
4497 essential health benefits required by PPACA.
4498 (b) The state shall quantify the cost attributable to each additional mandated benefit
4499 specified in Subsection (1)(a) based on a qualified health plan issuer's calculation of the cost
4500 associated with the mandated benefit, which shall be:
4501 (i) calculated in accordance with generally accepted actuarial principles and
4502 methodologies;
4503 (ii) conducted by a member of the American Academy of Actuaries; and
4504 (iii) reported to the commissioner and to the individual exchange operating in the state.
4505 (c) The commissioner may require a proponent of a new mandated benefit under
4506 Subsection (1)(a) to provide the commissioner with a cost analysis conducted in accordance
4507 with Subsection (1)(b). The commissioner may use the cost information provided under this
4508 Subsection (1)(c) to establish estimates of the cost to the state under Subsection (2).
4509 (2) If the state is required to defray the cost of additional required benefits under the
4510 provisions of 45 C.F.R. 155.170:
4511 (a) the state shall make the required payments:
4512 (i) in accordance with Subsection (3); and
4513 (ii) directly to the qualified health plan issuer in accordance with 45 C.F.R. 155.170;
4514 (b) an issuer of a qualified health plan that receives a payment under the provisions of
4515 Subsection (1) and 45 C.F.R. 155.170 shall:
4516 (i) reduce the premium charged to the individual on whose behalf the issuer will be
4517 paid under Subsection (1), in an amount equal to the amount of the payment under Subsection
4518 (1); or
4519 (ii) notwithstanding Subsection 31A-23a-402.5(5), provide a premium rebate to an
4520 individual on whose behalf the issuer received a payment under Subsection (1), in an amount
4521 equal to the amount of the payment under Subsection (1); and
4522 (c) a premium rebate made under this section is not a prohibited inducement under
4523 Section 31A-23a-402.5.
4524 (3) A payment required under 45 C.F.R. 155.170(c) shall:
4525 (a) unless otherwise required by PPACA, be based on a statewide average of the cost
4526 of the additional benefit for all issuers who are entitled to payment under the provisions of 45
4527 C.F.R. [
4528 (b) be submitted to an issuer through a process established [
4529
4530 commissioner.
4531 (4) The commissioner may adopt rules in accordance with Title 63G, Chapter 3, Utah
4532 Administrative Rulemaking Act, to:
4533 (a) [
4534 155.170; and
4535 (b) establish or implement a process for submitting a payment to an issuer under
4536 Subsection (3)(b).
4537 Section 45. Section 31A-35-402 is amended to read:
4538 31A-35-402. Authority related to bail bonds.
4539 (1) A bail bond agency may only sell bail bonds.
4540 (2) In accordance with Section 31A-23a-205, a bail bond producer may not execute or
4541 issue a bail bond in this state without holding a current appointment from a surety insurer or a
4542 current designation from a bail bond agency.
4543 (3) A bail bond [
4544 bail bond producer to engage in the bail bond insurance business on the bail bond agency's or
4545 surety insurer's behalf, except for individuals:
4546 (a) employed solely for the performance of clerical, stenographic, investigative, or
4547 other administrative duties that do not require a license as:
4548 (i) a bail bond agency; or
4549 (ii) a bail bond producer; and
4550 (b) whose compensation is not related to or contingent upon the number of bail bonds
4551 written.
4552 Section 46. Section 31A-37-303 is amended to read:
4553 31A-37-303. Reinsurance.
4554 (1) (a) A captive insurance company may cede risks to any insurance company
4555 approved by the commissioner.
4556 (b) A captive insurance company may provide reinsurance, as authorized in this title,
4557 [
4558 other insurer with prior approval of the commissioner.
4559 (2) (a) A captive insurance company may take credit for reserves on risks or portions of
4560 risks ceded to reinsurers if the captive insurance company complies with Section 31A-17-404,
4561 31A-17-404.1, 31A-17-404.3, or 31A-17-404.4 or if the captive insurance company complies
4562 with other requirements as the commissioner may establish by rule made in accordance with
4563 Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
4564 (b) Unless the reinsurer is in compliance with Section 31A-17-404, 31A-17-404.1,
4565 31A-17-404.3, or 31A-17-404.4 or a rule adopted under Subsection (2)(a), a captive insurance
4566 company may not take credit for:
4567 (i) reserves on risks ceded to a reinsurer; or
4568 (ii) portions of risks ceded to a reinsurer.
4569 Section 47. Section 34A-2-202 is amended to read:
4570 34A-2-202. Assessment on self-insured employers including the state, counties,
4571 cities, towns, or school districts paying compensation direct.
4572 (1) (a) (i) A self-insured employer, including a county, city, town, or school district,
4573 shall pay annually, on or before March 31, an assessment in accordance with this section and
4574 rules made by the commission under this section.
4575 (ii) For purposes of this section, "self-insured employer" is as defined in Section
4576 34A-2-201.5, except it includes the state if the state self-insures under Section 34A-2-203.
4577 (b) The assessment required by Subsection (1)(a) is:
4578 (i) to be collected by the State Tax Commission;
4579 (ii) paid by the State Tax Commission into the state treasury as provided in Subsection
4580 59-9-101(2); and
4581 (iii) subject to the offset provided in Section 34A-2-202.5.
4582 (c) The assessment under Subsection (1)(a) shall be based on a total calculated
4583 premium multiplied by the premium assessment rate established pursuant to Subsection
4584 59-9-101(2).
4585 (d) The total calculated premium, for purposes of calculating the assessment under
4586 Subsection (1)(a), shall be calculated by:
4587 (i) multiplying the total of the standard premium for each class code calculated in
4588 Subsection (1)(e) by the self-insured employer's experience modification factor; and
4589 (ii) multiplying the total under Subsection (1)(d)(i) by a safety factor determined under
4590 Subsection (1)(g).
4591 (e) A standard premium shall be calculated by:
4592 (i) multiplying the [
4593 filed with the insurance department pursuant to Section 31A-19a-406, for each applicable class
4594 code by 1.10 to determine the manual rate for each class code; and
4595 (ii) multiplying the manual rate for each class code under Subsection (1)(e)(i) by each
4596 $100 of the self-insured employer's covered payroll for each class code.
4597 (f) (i) Each self-insured employer paying compensation direct shall annually obtain the
4598 experience modification factor required in Subsection (1)(d)(i) by using:
4599 (A) the rate service organization designated by the insurance commissioner in Section
4600 31A-19a-404; or
4601 (B) for a self-insured employer that is a public agency insurance mutual, an actuary
4602 approved by the commission.
4603 (ii) If a self-insured employer's experience modification factor under Subsection
4604 (1)(f)(i) is less than 0.50, the self-insured employer shall use an experience modification factor
4605 of 0.50 in determining the total calculated premium.
4606 (g) To provide incentive for improved safety, the safety factor required in Subsection
4607 (1)(d)(ii) shall be determined based on the self-insured employer's experience modification
4608 factor as follows:
| 4609 | EXPERIENCE MODIFICATION FACTOR | SAFETY FACTOR | |
| 4610 | Less than or equal to 0.90 | 0.56 | |
| 4611 | Greater than 0.90 but less than or equal to 1.00 | 0.78 | |
| 4612 | Greater than 1.00 but less than or equal to 1.10 | 1.00 | |
| 4613 | Greater than 1.10 but less than or equal to 1.20 | 1.22 | |
| 4614 | Greater than 1.20 | 1.44 | |
4616 premium assessment modification under this section may not be allowed.
4617 (ii) If a self-insured employer paying compensation direct fails to obtain an experience
4618 modification factor as required in Subsection (1)(f)(i) within the reasonable time period
4619 established by rule by the State Tax Commission, the State Tax Commission shall use an
4620 experience modification factor of 2.00 and a safety factor of 2.00 to calculate the total
4621 calculated premium for purposes of determining the assessment.
4622 (iii) [
4623 (1)(h)(ii), the State Tax Commission shall provide the self-insured employer with written
4624 notice that failure to obtain an experience modification factor within a reasonable time period,
4625 as established by rule by the State Tax Commission:
4626 (A) shall result in the State Tax Commission using an experience modification factor
4627 of 2.00 and a safety factor of 2.00 in calculating the total calculated premium for purposes of
4628 determining the assessment; and
4629 (B) may result in the division revoking the self-insured employer's right to pay
4630 compensation direct.
4631 (i) The division may immediately revoke a self-insured employer's certificate issued
4632 under Sections 34A-2-201 and 34A-2-201.5 that permits the self-insured employer to pay
4633 compensation direct if the State Tax Commission assigns an experience modification factor
4634 and a safety factor under Subsection (1)(h) because the self-insured employer failed to obtain
4635 an experience modification factor.
4636 (2) Notwithstanding the annual payment requirement in Subsection (1)(a), a
4637 self-insured employer whose total assessment obligation under Subsection (1)(a) for the
4638 preceding year was $10,000 or more shall pay the assessment in quarterly installments in the
4639 same manner provided in Section 59-9-104 and subject to the same penalty provided in Section
4640 59-9-104 for not paying or underpaying an installment.
4641 (3) (a) The State Tax Commission shall have access to all the records of the division
4642 for the purpose of auditing and collecting any amounts described in this section.
4643 (b) Time periods for the State Tax Commission to allow a refund or make an
4644 assessment shall be determined in accordance with Title 59, Chapter 1, Part 14, Assessment,
4645 Collections, and Refunds Act.
4646 (4) (a) A review of appropriate use of job class assignment and calculation
4647 methodology may be conducted as directed by the division at any reasonable time as a
4648 condition of the self-insured employer's certification of paying compensation direct.
4649 (b) The State Tax Commission shall make any records necessary for the review
4650 available to the commission.
4651 (c) The commission shall make the results of any review available to the State Tax
4652 Commission.