Representative James A. Dunnigan proposes the following substitute bill:


1     
INSURANCE AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: James A. Dunnigan

5     
Senate Sponsor: Curtis S. Bramble

6     

7     LONG TITLE
8     General Description:
9          This bill amends the Insurance Code, the Public Employees' Benefit and Insurance
10     Program Act, and related provisions.
11     Highlighted Provisions:
12          This bill:
13          ▸     makes changes to provisions of the Insurance Code to:
14               •     amend what is considered protected work papers when the commissioner
15     conducts an examination;
16               •     amend requirements for service of process;
17               •     increase the amount of the annual appropriation for the Captive Insurance
18     Division;
19               •     amend the required process for insurers to file certain documents;
20               •     specify the filing requirements for insurers to submit annual statements with the
21     National Association of Insurance Commissioners;
22               •     prohibit insurance credit when a risk is ceded to an out-of-state captive;
23               •     eliminate certain requirements for a title insurance licensee to submit certain
24     filings;
25               •     enacts provisions requiring certain reporting for insurers that offer large

26     employer health benefit plans;
27               •     add a limited line insurance producer license for pet insurance;
28               •     permit the Department of Insurance (department) to take action against licensees
29     if the licensee enters a plea in abeyance to certain crimes;
30               •     clarify provisions related to title insurance companies' deposit of trust money in
31     federally-insured depository institutions in Utah;
32               •     eliminate the requirement that the Title and Escrow Commission (commission)
33     establish in rule an amount of costs and expenses that are covered by the annual
34     assessment on agency title insurance producers and title insurers (annual
35     assessment);
36               •     allow the commission to approve costs and expenses covered by the annual
37     assessment for the prior fiscal year;
38               •     eliminate the limitation on the amount of costs covered by the annual
39     assessment;
40               •     create the State Mandated Insurer Payments Restricted Account (account) and
41     provide that appropriations from the account are nonlapsing;
42               •     amend requirements for the method of reporting insurance fraud;
43               •     eliminate the requirement that an association of captives be in continuous
44     existence for at least one year;
45               •     change requirements for a captive insurer's paid-in capital;
46               •     prohibit insuring an award of punitive damages against a third party; and
47               •     amend the requirements for pure captive insurance companies to which the
48     commissioner issues a certificate of authority;
49          ▸     amends provisions related to certain recommendations for benefit and rate
50     adjustments for state employees that the Public Employees' Benefit and Insurance
51     Program is required to submit;
52          ▸     makes technical and conforming changes; and
53          ▸     defines terms.
54     Money Appropriated in this Bill:
55          None
56     Other Special Clauses:

57          None
58     Utah Code Sections Affected:
59     AMENDS:
60          31A-2-204, as last amended by Laws of Utah 2018, Chapter 319
61          31A-2-310, as last amended by Laws of Utah 1995, Chapter 20
62          31A-3-304, as last amended by Laws of Utah 2019, Chapter 193
63          31A-4-113.5, as last amended by Laws of Utah 2003, Chapter 252
64          31A-16-103, as last amended by Laws of Utah 2018, Chapter 319
65          31A-17-404, as last amended by Laws of Utah 2021, Chapter 252
66          31A-19a-209, as last amended by Laws of Utah 2015, Chapters 312, 330
67          31A-23a-106, as last amended by Laws of Utah 2015, Chapter 330
68          31A-23a-111, as last amended by Laws of Utah 2022, Chapter 198
69          31A-23a-406, as last amended by Laws of Utah 2021, Chapter 252
70          31A-23a-409, as last amended by Laws of Utah 2021, Chapter 252
71          31A-23a-415, as last amended by Laws of Utah 2020, Chapter 32
72          31A-23b-401, as last amended by Laws of Utah 2020, Chapter 32
73          31A-25-208, as last amended by Laws of Utah 2020, Chapter 32
74          31A-26-213, as last amended by Laws of Utah 2020, Chapter 32
75          31A-30-118, as last amended by Laws of Utah 2020, Chapter 32
76          31A-31-110, as last amended by Laws of Utah 2008, Chapter 150
77          31A-35-504, as last amended by Laws of Utah 2021, Second Special Session, Chapter 4
78          31A-37-102, as last amended by Laws of Utah 2021, Chapter 252
79          31A-37-202, as last amended by Laws of Utah 2021, Chapter 252
80          31A-37-204, as last amended by Laws of Utah 2021, Chapter 252
81          49-20-401, as last amended by Laws of Utah 2022, Chapter 302
82          63J-1-602.1, as last amended by Laws of Utah 2022, Chapters 48, 191, 255, 335, 415,
83     and 451
84     ENACTS:
85          31A-22-728, Utah Code Annotated 1953
86     

87     Be it enacted by the Legislature of the state of Utah:

88          Section 1. Section 31A-2-204 is amended to read:
89          31A-2-204. Conducting examinations.
90          (1) As used in this section, "work papers" means a record that is created or relied upon:
91          (a) during the course of an examination conducted under Section 31A-2-203; [or]
92          (b) in drafting an examination report[.]; or
93          (c) in requesting, responding to a request, or reviewing a response to a request under
94     Section 31A-2-202.
95          (2) (a) For each examination under Section 31A-2-203, the commissioner shall issue an
96     order:
97          (i) stating the scope of the examination; and
98          (ii) designating the examiner in charge.
99          (b) The commissioner need not give advance notice of an examination to an examinee.
100          (c) The examiner in charge shall give the examinee a copy of the order issued under
101     this Subsection (2).
102          (d) (i) The commissioner may alter the scope or nature of an examination at any time
103     without advance notice to the examinee.
104          (ii) If the commissioner amends an order described in this Subsection (2), the
105     commissioner shall provide a copy of any amended order to the examinee.
106          (e) Statements in the commissioner's examination order concerning examination scope
107     are for the examiner's guidance only.
108          (f) Examining relevant matters not mentioned in an order issued under this Subsection
109     (2) is not a violation of this title.
110          (3) The commissioner shall, whenever practicable, cooperate with the insurance
111     regulators of other states by conducting joint examinations of:
112          (a) multistate insurers doing business in this state; or
113          (b) other multistate licensees doing business in this state.
114          (4) An examiner authorized by the commissioner shall, when necessary to the purposes
115     of the examination, have access at all reasonable hours to the premises and to any books,
116     records, files, securities, documents, or property of:
117          (a) the examinee; and
118          (b) any of the following if the premises, books, records, files, securities, documents, or

119     property relate to the affairs of the examinee:
120          (i) an officer of the examinee;
121          (ii) any other person who:
122          (A) has executive authority over the examinee; or
123          (B) is in charge of any segment of the examinee's affairs; or
124          (iii) any affiliate of the examinee under Subsection 31A-2-203(1)(b).
125          (5) (a) The officers, employees, and agents of the examinee and of persons under
126     Subsection 31A-2-203(1)(b) shall comply with every reasonable request of the examiners for
127     assistance in any matter relating to the examination.
128          (b) A person may not obstruct or interfere with the examination except by legal
129     process.
130          (6) If the commissioner finds the accounts or records to be inadequate for proper
131     examination of the condition and affairs of the examinee or improperly kept or posted, the
132     commissioner may employ experts to rewrite, post, or balance the accounts or records at the
133     expense of the examinee.
134          (7) (a) The examiner in charge of an examination shall make a report of the
135     examination no later than 60 days after the completion of the examination that shall include:
136          (i) the information and analysis ordered under Subsection (2); and
137          (ii) the examiner's recommendations.
138          (b) At the option of the examiner in charge, preparation of the report may include
139     conferences with the examinee or representatives of the examinee.
140          (c) The report is confidential until the report becomes a public document under
141     Subsection (8), except the commissioner may use information from the report as a basis for
142     action under Chapter 27a, Insurer Receivership Act.
143          (8) (a) The commissioner shall serve a copy of the examination report described in
144     Subsection (7) upon the examinee.
145          (b) Within 20 days after service, the examinee shall:
146          (i) accept the examination report as written; or
147          (ii) request agency action to modify the examination report.
148          (c) The report is considered accepted under this Subsection (8) if the examinee does
149     not file a request for agency action to modify the report within 20 days after service of the

150     report.
151          (d) If the examination report is accepted:
152          (i) the examination report immediately becomes a public document; and
153          (ii) the commissioner shall distribute the examination report to all jurisdictions in
154     which the examinee is authorized to do business.
155          (e) (i) Any adjudicative proceeding held as a result of the examinee's request for
156     agency action shall, upon the examinee's demand, be closed to the public, except that the
157     commissioner need not exclude any participating examiner from this closed hearing.
158          (ii) Within 20 days after the hearing held under this Subsection (8)(e), the
159     commissioner shall:
160          (A) adopt the examination report with any necessary modifications; and
161          (B) serve a copy of the adopted report upon the examinee.
162          (iii) Unless the examinee seeks judicial relief, the adopted examination report:
163          (A) shall become a public document 10 days after service; and
164          (B) may be distributed as described in this section.
165          (f) Notwithstanding Title 63G, Chapter 4, Administrative Procedures Act, to the extent
166     that this section is in conflict with Title 63G, Chapter 4, Administrative Procedures Act, this
167     section governs:
168          (i) a request for agency action under this section; or
169          (ii) adjudicative proceeding under this section.
170          (9) The examinee shall promptly furnish copies of the adopted examination report
171     described in Subsection (8) to each member of the examinee's board.
172          (10) After an examination report becomes a public document under Subsection (8), the
173     commissioner may furnish, without cost or at a reasonable price set under Section 31A-3-103,
174     a copy of the examination report to interested persons, including:
175          (a) a member of the board of the examinee; or
176          (b) one or more newspapers in this state.
177          (11) (a) In a proceeding by or against the examinee, or any officer or agent of the
178     examinee, the examination report as adopted by the commissioner is admissible as evidence of
179     the facts stated in the report.
180          (b) In any proceeding commenced under Chapter 27a, Insurer Receivership Act, the

181     examination report, whether adopted by the commissioner or not, is admissible as evidence of
182     the facts stated in the examination report.
183          (12) Work papers are protected records under Title 63G, Chapter 2, Government
184     Records Access and Management Act.
185          Section 2. Section 31A-2-310 is amended to read:
186          31A-2-310. Procedure for service of process through state officer.
187          (1) Service upon the commissioner or lieutenant governor under Section 31A-2-309 is
188     service on the principal, if:
189          (a) [two copies of the process] the following are delivered personally or to the office of
190     the official designated in Section 31A-2-309[, and]:
191          (i) two copies of the process to be served; and
192          (ii) a certificate of proof of service that meets the requirements of Subsection (3), dated
193     and signed by the official designated in Section 31A-2-309; and
194          (b) that official mails a copy of the process to the person to be served according to
195     Subsection (2)(b).
196          (2) (a) The commissioner and the lieutenant governor shall give receipts for and keep
197     records of all process served through them.
198          (b) The commissioner or the lieutenant governor shall immediately send by certified
199     mail one copy of the process received to the person to be served at that person's last known
200     principal place of business, residence, or post-office address. The commissioner or the
201     lieutenant governor shall retain the other copy for his files.
202          (c) No plaintiff or complainant may take a judgment by default in any proceeding in
203     which process is served under this section and Section 31A-2-309 until the expiration of 40
204     days from the date of service of process under Subsection (2)(b).
205          (3) Proof of service shall be evidenced by a certificate by the official designated in
206     Section 31A-2-309, showing service made upon him and mailing by him, and attached to a
207     copy of the process presented to him for that purpose.
208          (4) When process is served under this section, the words "twenty days" in the first
209     sentence of Rule 12(a) of the Utah Rules of Civil Procedure shall be changed to read "forty
210     days."
211          Section 3. Section 31A-3-304 is amended to read:

212          31A-3-304. Annual fees -- Other taxes or fees prohibited -- Captive Insurance
213     Restricted Account.
214          (1) (a) A captive insurance company shall pay an annual fee imposed under this section
215     to obtain or renew a certificate of authority.
216          (b) The commissioner shall:
217          (i) determine the annual fee pursuant to Section 31A-3-103; and
218          (ii) consider whether the annual fee is competitive with fees imposed by other states on
219     captive insurance companies.
220          (2) A captive insurance company that fails to pay the fee required by this section is
221     subject to the relevant sanctions of this title.
222          (3) (a) A captive insurance company that pays one of the following fees is exempt from
223     Title 59, Chapter 7, Corporate Franchise and Income Taxes, and Title 59, Chapter 9, Taxation
224     of Admitted Insurers:
225          (i) a fee under this section;
226          (ii) a fee under Chapter 37, Captive Insurance Companies Act; or
227          (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
228     Act.
229          (b) The state or a county, city, or town within the state may not levy or collect an
230     occupation tax or other fee or charge not described in Subsections (3)(a)(i) through (iii) against
231     a captive insurance company.
232          (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
233     against a captive insurance company.
234          (4) A captive insurance company shall pay the fee imposed by this section to the
235     commissioner by June 1 of each year.
236          (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
237     deposited into the Captive Insurance Restricted Account.
238          (b) There is created in the General Fund a restricted account known as the "Captive
239     Insurance Restricted Account."
240          (c) The Captive Insurance Restricted Account shall consist of the fees described in
241     Subsection (3)(a).
242          (d) The commissioner shall administer the Captive Insurance Restricted Account.

243     Subject to appropriations by the Legislature, the commissioner shall use the money deposited
244     into the Captive Insurance Restricted Account to:
245          (i) administer and enforce:
246          (A) Chapter 37, Captive Insurance Companies Act; and
247          (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
248          (ii) promote the captive insurance industry in Utah.
249          (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
250     except that at the end of each fiscal year, money received by the commissioner in excess of the
251     following shall be treated as free revenue in the General Fund:
252          (i) for fiscal year 2018-2019 and subsequent fiscal years, in excess of $1,600,000;
253     [and]
254          (ii) for fiscal year 2019-2020 and subsequent fiscal years, in excess of $1,450,000[.];
255     and
256          (iii) for fiscal year 2023-2024 and subsequent fiscal years, in excess of $1,650,000.
257          Section 4. Section 31A-4-113.5 is amended to read:
258          31A-4-113.5. Filing requirements -- National Association of Insurance
259     Commissioners.
260          (1) (a) Each domestic, foreign, and alien insurer who is authorized to transact insurance
261     business in this state shall annually[, on or before March 1, file with the National Association
262     of Insurance Commissioners] file with the NAIC a copy of the insurer's:
263          (i) annual statement convention blank on or before March 1; [and]
264          (ii) market conduct annual statements:
265          (A) on or before April 30, for all lines of business except health; and
266          (B) on or before June 30, for the health line of business; and
267          [(ii)] (iii) any additional filings required by the commissioner for the preceding year.
268          (b) (i) The information filed with the [National Association of Insurance
269     Commissioners] NAIC under Subsection [(1)(a)] (1)(a)(i) shall:
270          [(i)] (A) [be in the format and scope required by the commissioner; and] be prepared in
271     accordance with the NAIC's:
272          (I) annual statement instructions; and
273          (II) Accounting Practices and Procedures Manual; and

274          [(ii)] (B) include:
275          [(A)] (I) the signed jurat page; and
276          [(B)] (II) the actuarial certification.
277          (ii) An insurer shall file with the NAIC amendments and addenda to information filed
278     with the commissioner under Subsection (1)(a)(i).
279          (c) [Any amendments and addendums to an annual statement that are filed with the
280     commissioner shall be filed by the insurer with the National Association of Insurance
281     Commissioners.] The information filed with the NAIC under Subsection (1)(a)(ii) shall be
282     prepared in accordance with the NAIC's Market Conduct Annual Statement Industry User
283     Guide.
284          (d) At the time an insurer makes a filing under this Subsection (1), the insurer shall pay
285     any filing fees assessed by the [National Association of Insurance Commissioners] NAIC.
286          (e) A foreign insurer that is domiciled in a state that has a law substantially similar to
287     this section shall be considered to be in compliance with this section.
288          (2) All financial analysis ratios and examination synopses concerning insurance
289     companies that are submitted to the department by the Insurance Regulatory Information
290     System are confidential and may not be disclosed by the department.
291          (3) The commissioner may suspend, revoke, or refuse to renew the certificate of
292     authority of any insurer failing to:
293          (a) [file the annual statement as required by] submit the filings under Subsection (1)(a)
294     when due or within any extension of time granted for good cause by:
295          (i) the commissioner; or
296          (ii) the [National Association of Insurance Commissioners] NAIC; or
297          (b) pay by the time specified in Subsection (3)(a) a fee the insurer is required to pay
298     under this section to:
299          (i) the commissioner; or
300          (ii) the [National Association of Insurance Commissioners] NAIC.
301          Section 5. Section 31A-16-103 is amended to read:
302          31A-16-103. Acquisition of control of, divestiture of control of, or merger with
303     domestic insurer.
304          (1) (a) A person may not take the actions described in Subsection (1)(b) or (c) unless,

305     at the time any offer, request, or invitation is made or any such agreement is entered into, or
306     prior to the acquisition of securities if no offer or agreement is involved:
307          (i) the person files with the commissioner a statement containing the information
308     required by this section;
309          (ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
310     insurer; and
311          (iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
312          (b) Unless the person complies with Subsection (1)(a), a person other than the issuer
313     may not make a tender offer for, a request or invitation for tenders of, or enter into any
314     agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
315     any voting security of a domestic insurer if after the acquisition, the person would directly,
316     indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
317          (c) Unless the person complies with Subsection (1)(a), a person may not enter into an
318     agreement to merge with or otherwise to acquire control of:
319          (i) a domestic insurer; or
320          (ii) any person controlling a domestic insurer.
321          (d) For purposes of this section, a controlling person of a domestic insurer seeking to
322     divest its controlling interest in the domestic insurer, in any manner, shall file with the
323     commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least
324     30 days before the cessation of control. The commissioner shall determine those instances in
325     which the one or more persons seeking to divest or to acquire a controlling interest in an
326     insurer, will be required to file for and obtain approval of the transaction. The information
327     shall remain confidential until the conclusion of the transaction unless the commissioner, in the
328     commissioner's discretion, determines that confidential treatment will interfere with
329     enforcement of this section. If the statement referred to in Subsection (1)(a) is otherwise filed,
330     this Subsection (1)(d) does not apply.
331          (e) With respect to a transaction subject to this section, the acquiring person shall also
332     file a pre-acquisition notification with the commissioner, which shall contain the information
333     set forth in Section 31A-16-104.5. A failure to file the notification may be subject to penalties
334     specified in Section 31A-16-104.5.
335          (f) (i) For purposes of this section, a domestic insurer includes any person controlling a

336     domestic insurer unless the person as determined by the commissioner is either directly or
337     through its affiliates primarily engaged in business other than the business of insurance.
338          (ii) The controlling person described in Subsection (1)(f)(i) shall file with the
339     commissioner a preacquisition notification containing the information required in Subsection
340     (2) 30 calendar days before the proposed effective date of the acquisition.
341          (iii) For the purposes of this section, "person" does not include any securities broker
342     that in the usual and customary brokers function holds less than 20% of:
343          (A) the voting securities of an insurance company; or
344          (B) any person that controls an insurance company.
345          (iv) This section applies to all domestic insurers and other entities licensed under:
346          (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
347          (B) Chapter 7, Nonprofit Health Service Insurance Corporations;
348          (C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
349          (D) Chapter 9, Insurance Fraternals; and
350          (E) Chapter 11, Motor Clubs.
351          (g) (i) An agreement for acquisition of control or merger as contemplated by this
352     Subsection (1) is not valid or enforceable unless the agreement:
353          (A) is in writing; and
354          (B) includes a provision that the agreement is subject to the approval of the
355     commissioner upon the filing of any applicable statement required under this chapter.
356          (ii) A written agreement for acquisition or control that includes the provision described
357     in Subsection (1)(g)(i) satisfies the requirements of this Subsection (1).
358          (2) The statement to be filed with the commissioner under Subsection (1) shall be
359     made under oath or affirmation and shall contain the following information:
360          (a) the name and address of the "acquiring party," which means each person by whom
361     or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
362     be effected; and
363          (i) if the person is an individual:
364          (A) the person's principal occupation;
365          (B) a listing of all offices and positions held by the person during the past five years;
366     and

367          (C) any conviction of crimes other than minor traffic violations during the past 10
368     years; and
369          (ii) if the person is not an individual:
370          (A) a report of the nature of its business operations during:
371          (I) the past five years; or
372          (II) for any lesser period as the person and any of its predecessors has been in
373     existence;
374          (B) an informative description of the business intended to be done by the person and
375     the person's subsidiaries;
376          (C) a list of all individuals who are or who have been selected to become directors or
377     executive officers of the person, or individuals who perform, or who will perform functions
378     appropriate to such positions; and
379          (D) for each individual described in Subsection (2)(a)(ii)(C), the information required
380     by Subsection (2)(a)(i) for each individual;
381          (b) (i) the source, nature, and amount of the consideration used or to be used in
382     effecting the merger or acquisition of control;
383          (ii) a description of any transaction in which funds were or are to be obtained for the
384     purpose of effecting the merger or acquisition of control, including any pledge of:
385          (A) the insurer's stock; or
386          (B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
387          (iii) the identity of persons furnishing the consideration;
388          (c) (i) fully audited financial information, or other financial information considered
389     acceptable by the commissioner, of the earnings and financial condition of each acquiring party
390     for:
391          (A) the preceding five fiscal years of each acquiring party; or
392          (B) any lesser period the acquiring party and any of its predecessors shall have been in
393     existence; and
394          (ii) unaudited information:
395          (A) similar to the information described in Subsection (2)(c)(i); and
396          (B) prepared within the 90 days prior to the filing of the statement;
397          (d) any plans or proposals which each acquiring party may have to:

398          (i) liquidate the insurer;
399          (ii) sell its assets;
400          (iii) merge or consolidate the insurer with any person; or
401          (iv) make any other material change in the insurer's:
402          (A) business;
403          (B) corporate structure; or
404          (C) management;
405          (e) (i) the number of shares of any security referred to in Subsection (1) that each
406     acquiring party proposes to acquire;
407          (ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
408     Subsection (1); and
409          (iii) a statement as to the method by which the fairness of the proposal was arrived at;
410          (f) the amount of each class of any security referred to in Subsection (1) that:
411          (i) is beneficially owned; or
412          (ii) concerning which there is a right to acquire beneficial ownership by each acquiring
413     party;
414          (g) a full description of any contract, arrangement, or understanding with respect to any
415     security referred to in Subsection (1) in which any acquiring party is involved, including:
416          (i) the transfer of any of the securities;
417          (ii) joint ventures;
418          (iii) loan or option arrangements;
419          (iv) puts or calls;
420          (v) guarantees of loans;
421          (vi) guarantees against loss or guarantees of profits;
422          (vii) division of losses or profits; or
423          (viii) the giving or withholding of proxies;
424          (h) a description of the purchase by any acquiring party of any security referred to in
425     Subsection (1) during the 12 calendar months preceding the filing of the statement including:
426          (i) the dates of purchase;
427          (ii) the names of the purchasers; and
428          (iii) the consideration paid or agreed to be paid for the purchase;

429          (i) a description of:
430          (i) any recommendations to purchase by any acquiring party any security referred to in
431     Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
432          (ii) any recommendations made by anyone based upon interviews or at the suggestion
433     of the acquiring party;
434          (j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
435     offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
436     and
437          (ii) if distributed, copies of additional soliciting material relating to the transactions
438     described in Subsection (2)(j)(i);
439          (k) (i) the term of any agreement, contract, or understanding made with, or proposed to
440     be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
441     tender; and
442          (ii) the amount of any fees, commissions, or other compensation to be paid to
443     broker-dealers with regard to any agreement, contract, or understanding described in
444     Subsection (2)(k)(i);
445          (l) an agreement by the person required to file the statement referred to in Subsection
446     (1) that it will provide the annual report, specified in Section 31A-16-105, for so long as
447     control exists;
448          (m) an acknowledgment by the person required to file the statement referred to in
449     Subsection (1) that the person and all subsidiaries within its control in the insurance holding
450     company system will provide information to the commissioner upon request as necessary to
451     evaluate enterprise risk to the insurer; and
452          (n) any additional information the commissioner requires by rule, which the
453     commissioner determines to be:
454          (i) necessary or appropriate for the protection of policyholders of the insurer; or
455          (ii) in the public interest.
456          (3) (a) The department may request:
457          [(a)] (i) criminal background information maintained pursuant to Title 53, Chapter 10,
458     Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
459          (ii) complete Federal Bureau of Investigation criminal background checks through the

460     national criminal history system.
461          (b) Information obtained by the department from the review of criminal history records
462     received under Subsection (3)(a) shall be used by the department for the purpose of:
463          (i) verifying the information in Subsection (2)(a)(i);
464          (ii) determining the integrity of persons who would control the operation of an insurer;
465     and
466          (iii) preventing persons who violate 18 U.S.C. Sec. 1033 from engaging in the business
467     of insurance in the state.
468          (c) If the department requests the criminal background information, the department
469     shall:
470          (i) pay to the Department of Public Safety the costs incurred by the Department of
471     Public Safety in providing the department criminal background information under Subsection
472     (3)(a)(i);
473          (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
474     of Investigation in providing the department criminal background information under
475     Subsection (3)(a)(ii); and
476          (iii) charge the person required to file the statement referred to in Subsection (1) a fee
477     equal to the aggregate of Subsections (3)(c)(i) and (ii).
478          (4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
479     the lender's ordinary course of business, the identity of the lender shall remain confidential, if
480     the person filing the statement so requests.
481          (b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
482     adjusted book value assigned by the acquiring party to each security in arriving at the terms of
483     the offer.
484          (ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
485     proportional interest in the capital and surplus of the insurer with adjustments that reflect:
486          (A) market conditions;
487          (B) business in force; and
488          (C) other intangible assets or liabilities of the insurer.
489          (c) The description required by Subsection (2)(g) shall identify the persons with whom
490     the contracts, arrangements, or understandings have been entered into.

491          (5) (a) If the person required to file the statement referred to in Subsection (1) is a
492     partnership, limited partnership, syndicate, or other group, the commissioner may require that
493     all the information called for by Subsection (2), (3), or (4) shall be given with respect to each:
494          (i) partner of the partnership or limited partnership;
495          (ii) member of the syndicate or group; and
496          (iii) person who controls the partner or member.
497          (b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
498     or if the person required to file the statement referred to in Subsection (1) is a corporation, the
499     commissioner may require that the information called for by Subsection (2) shall be given with
500     respect to:
501          (i) the corporation;
502          (ii) each officer and director of the corporation; and
503          (iii) each person who is directly or indirectly the beneficial owner of more than 10% of
504     the outstanding voting securities of the corporation.
505          (6) If any material change occurs in the facts set forth in the statement filed with the
506     commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
507     the change, together with copies of all documents and other material relevant to the change,
508     shall be filed with the commissioner and sent to the insurer within two business days after the
509     filing person learns of such change.
510          (7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
511     (1) is proposed to be made by means of a registration statement under the Securities Act of
512     1933, or under circumstances requiring the disclosure of similar information under the
513     Securities Exchange Act of 1934, or under a state law requiring similar registration or
514     disclosure, a person required to file the statement referred to in Subsection (1) may use copies
515     of any registration or disclosure documents in furnishing the information called for by the
516     statement.
517          (8) (a) The commissioner shall approve any merger or other acquisition of control
518     referred to in Subsection (1), unless the commissioner finds that:
519          (i) after the change of control, the domestic insurer referred to in Subsection (1) would
520     not be able to satisfy the requirements for the issuance of a license to write the line or lines of
521     insurance for which it is presently licensed;

522          (ii) the effect of the merger or other acquisition of control would:
523          (A) substantially lessen competition in insurance in this state; or
524          (B) tend to create a monopoly in insurance;
525          (iii) the financial condition of any acquiring party might:
526          (A) jeopardize the financial stability of the insurer; or
527          (B) prejudice the interest of:
528          (I) its policyholders; or
529          (II) any remaining securityholders who are unaffiliated with the acquiring party;
530          (iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
531     Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
532          (v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
533     assets, or consolidate or merge it with any person, or to make any other material change in its
534     business or corporate structure or management, are:
535          (A) unfair and unreasonable to policyholders of the insurer; and
536          (B) not in the public interest; or
537          (vi) the competence, experience, and integrity of those persons who would control the
538     operation of the insurer are such that it would not be in the interest of the policyholders of the
539     insurer and the public to permit the merger or other acquisition of control.
540          (b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
541     be considered unfair if the adjusted book values under Subsection (2)(e):
542          (i) are disclosed to the securityholders; and
543          (ii) determined by the commissioner to be reasonable.
544          (9) For a merger or other acquisition of control described in Subsection (1), the
545     commissioner:
546          (a) may hold a public hearing on the merger or other acquisition at the commissioner's
547     discretion; and
548          (b) shall hold a public hearing on the merger or other acquisition upon request by the
549     acquiring party, the insurer, or [any other] an interested party.
550          (10) (a) [The commissioner shall hold a public hearing under Subsection (9) no later
551     than 45 days after the day on which the statement required by Subsection (1) is filed.] If the
552     commissioner does not hold a hearing described in Subsection (9), the commissioner shall

553     approve or deny the merger or other acquisition within 30 days after the day on which the
554     department deems the statement required under Subsection (1) complete.
555          (b) (i) The commissioner shall give at least 20 [days notice of the hearing to the person
556     filing the statement] days' notice of a hearing described in Subsection (9) to the person filing
557     the statement described in Subsection (1).
558          (ii) [Affected parties may waive the notice required by this Subsection (9)(b).] The
559     commissioner shall hold a hearing described in Subsection (9) within 30 days after the day on
560     which the department deems the statement required under Subsection (1) complete.
561          (iii) Not less than seven [days] days' notice of the [public] hearing shall be given by the
562     person filing the statement under Subsection (1) to:
563          (A) the insurer; and
564          (B) any person designated by the commissioner.
565          (iv) Affected parties may waive the notice required under this Subsection (10)(b).
566          (v) At the hearing, the person filing the statement under Subsection (1), the insurer, any
567     person to whom notice of hearing was sent, and any person whose interest may be affected by
568     the hearing may:
569          (A) present evidence;
570          (B) examine and cross-examine witnesses; and
571          (C) offer oral and written arguments.
572          (vi) (A) A person or insurer described in Subsection (10)(b)(v) may conduct discovery
573     in the same manner as is allowed in the district courts of this state.
574          (B) All discovery shall be concluded not later than three days before the
575     commencement of the hearing.
576          [(c) The commissioner shall make a determination within 30 days after the conclusion
577     of the hearing.]
578          [(d) At the hearing, the person filing the statement, the insurer, any person to whom
579     notice of hearing was sent, and any other person whose interest may be affected by the hearing
580     may:]
581          [(i) present evidence;]
582          [(ii) examine and cross-examine witnesses; and]
583          [(iii) offer oral and written arguments.]

584          [(e) (i) A person or insurer described in Subsection (10)(d) may conduct discovery
585     proceedings in the same manner as is presently allowed in the district courts of this state.]
586          [(ii) All discovery proceedings shall be concluded not later than three days before the
587     commencement of the public hearing.]
588          (11) If the proposed acquisition of control will require the approval of more than one
589     commissioner, the public hearing described in Subsection (9) may be held on a consolidated
590     basis upon request of the person filing the statement referred to in Subsection (1). The person
591     shall file the statement referred to in Subsection (1) with the National Association of Insurance
592     Commissioners within five days of making the request for a public hearing. A commissioner
593     may opt out of a consolidated hearing and shall provide notice to the applicant of the opt-out
594     within 10 days of the receipt of the statement referred to in Subsection (1). A hearing
595     conducted on a consolidated basis shall be public and shall be held within the United States
596     before the commissioners of the states in which the insurers are domiciled. The commissioners
597     shall hear and receive evidence. A commissioner may attend a hearing under this Subsection
598     (11) in person or by telecommunication.
599          (12) In connection with a change of control of a domestic insurer, any determination by
600     the commissioner that the person acquiring control of the insurer shall be required to maintain
601     or restore the capital of the insurer to the level required by the laws and regulations of this state
602     shall be made not later than 60 days after the date of notification of the change in control
603     submitted pursuant to Subsection (1).
604          (13) (a) The commissioner may retain technical experts to assist in reviewing all, or a
605     portion of, information filed in connection with a proposed merger or other acquisition of
606     control referred to in Subsection (1).
607          (b) In determining whether any of the conditions in Subsection (8) exist, the
608     commissioner may consider the findings of technical experts employed to review applicable
609     filings.
610          (c) (i) A technical expert employed under Subsection (13)(a) shall present to the
611     commissioner a statement of all expenses incurred by the technical expert in conjunction with
612     the technical expert's review of a proposed merger or other acquisition of control.
613          (ii) At the commissioner's direction the acquiring person shall compensate the technical
614     expert at customary rates for time and expenses:

615          (A) necessarily incurred; and
616          (B) approved by the commissioner.
617          (iii) The acquiring person shall:
618          (A) certify the consolidated account of all charges and expenses incurred for the review
619     by technical experts;
620          (B) retain a copy of the consolidated account described in Subsection (13)(c)(iii)(A);
621     and
622          (C) file with the department as a public record a copy of the consolidated account
623     described in Subsection (13)(c)(iii)(A).
624          (14) (a) (i) If a domestic insurer proposes to merge into another insurer, any
625     securityholder electing to exercise a right of dissent may file with the insurer a written request
626     for payment of the adjusted book value given in the statement required by Subsection (1) and
627     approved under Subsection (8), in return for the surrender of the security holder's securities.
628          (ii) The request described in Subsection (14)(a)(i) shall be filed not later than 10 days
629     after the day of the securityholders' meeting where the corporate action is approved.
630          (b) The dissenting securityholder is entitled to and the insurer is required to pay to the
631     dissenting securityholder the specified value within 60 days of receipt of the dissenting security
632     holder's security.
633          (c) Persons electing under this Subsection (14) to receive cash for their securities waive
634     the dissenting shareholder and appraisal rights otherwise applicable under Title 16, Chapter
635     10a, Part 13, Dissenters' Rights.
636          (d) (i) This Subsection (14) provides an elective procedure for dissenting
637     securityholders to resolve their objections to the plan of merger.
638          (ii) This section does not restrict the rights of dissenting securityholders under Title 16,
639     Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
640     Subsection (14).
641          (15) (a) All statements, amendments, or other material filed under Subsection (1), and
642     all notices of public hearings held under Subsection [(8)] (10), shall be mailed by the insurer to
643     its securityholders within five business days after the insurer has received the statements,
644     amendments, other material, or notices.
645          (b) (i) Mailing expenses shall be paid by the person making the filing.

646          (ii) As security for the payment of mailing expenses, that person shall file with the
647     commissioner an acceptable bond or other deposit in an amount determined by the
648     commissioner.
649          (16) This section does not apply to any offer, request, invitation, agreement, or
650     acquisition that the commissioner by order exempts from the requirements of this section as:
651          (a) not having been made or entered into for the purpose of, and not having the effect
652     of, changing or influencing the control of a domestic insurer; or
653          (b) otherwise not comprehended within the purposes of this section.
654          (17) The following are violations of this section:
655          (a) the failure to file any statement, amendment, or other material required to be filed
656     pursuant to Subsections (1), (2), and (5); or
657          (b) the effectuation, or any attempt to effectuate, an acquisition of control of,
658     divestiture of, or merger with a domestic insurer unless the commissioner has given the
659     commissioner's approval to the acquisition or merger.
660          (18) (a) The courts of this state are vested with jurisdiction over:
661          (i) a person who:
662          (A) files a statement with the commissioner under this section; and
663          (B) is not resident, domiciled, or authorized to do business in this state; and
664          (ii) overall actions involving persons described in Subsection (18)(a)(i) arising out of a
665     violation of this section.
666          (b) A person described in Subsection (18)(a) is considered to have performed acts
667     equivalent to and constituting an appointment of the commissioner by that person, to be that
668     person's lawful agent upon whom may be served all lawful process in any action, suit, or
669     proceeding arising out of a violation of this section.
670          (c) A copy of a lawful process described in Subsection (18)(b) shall be:
671          (i) served on the commissioner; and
672          (ii) transmitted by registered or certified mail by the commissioner to the person at that
673     person's last-known address.
674          Section 6. Section 31A-17-404 is amended to read:
675          31A-17-404. Credit allowed a domestic ceding insurer against reserves for
676     reinsurance.

677          (1) (a) Subject to Subsections (1)(b) and (c), a domestic ceding insurer is allowed
678     credit for reinsurance as either an asset or a reduction from liability for reinsurance ceded only
679     if the reinsurer meets the requirements of Subsection (3), (4), (5), (6), (7), (8), or (9).
680          (b) Credit is allowed under Subsection (3), (4), or (5) only with respect to a cession of
681     a kind or class of business that the assuming insurer is licensed or otherwise permitted to write
682     or assume:
683          (i) in the assuming insurer's state of domicile; or
684          (ii) in the case of a United States branch of an alien assuming insurer, in the state
685     through which the assuming insurer is entered and licensed to transact insurance or
686     reinsurance.
687          (c) Credit is allowed under Subsection (5) or (6) only if the applicable requirements of
688     Subsection (11) are met.
689          (2) A domestic ceding insurer is allowed credit for reinsurance ceded:
690          (a) only if the reinsurance is payable in a manner consistent with Section 31A-22-1201;
691          (b) only to the extent that the accounting:
692          (i) is consistent with the terms of the reinsurance contract; and
693          (ii) clearly reflects:
694          (A) the amount and nature of risk transferred; and
695          (B) liability, including contingent liability, of the ceding insurer;
696          (c) only to the extent the reinsurance contract shifts insurance policy risk from the
697     ceding insurer to the assuming reinsurer in fact and not merely in form; and
698          (d) only if the reinsurance contract contains a provision placing on the reinsurer the
699     credit risk of all dealings with intermediaries regarding the reinsurance contract.
700          (3) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
701     assuming insurer that is licensed to transact insurance or reinsurance in this state.
702          (4) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
703     assuming insurer that is accredited by the commissioner as a reinsurer in this state.
704          (b) An insurer is accredited as a reinsurer if the insurer:
705          (i) files with the commissioner evidence of the insurer's submission to this state's
706     jurisdiction;
707          (ii) submits to the commissioner's authority to examine the insurer's books and records;

708          (iii) (A) is licensed to transact insurance or reinsurance in at least one state; or
709          (B) in the case of a United States branch of an alien assuming insurer, is entered
710     through and licensed to transact insurance or reinsurance in at least one state;
711          (iv) files annually with the commissioner a copy of the insurer's:
712          (A) annual statement filed with the insurance department of the insurer's state of
713     domicile; and
714          (B) most recent audited financial statement; and
715          (v) (A) (I) has not had the insurer's accreditation denied by the commissioner within 90
716     days after the day on which the insurer submits the information required by this Subsection (4);
717     and
718          (II) maintains a surplus with regard to policyholders in an amount not less than
719     $20,000,000; or
720          (B) (I) has the insurer's accreditation approved by the commissioner; and
721          (II) maintains a surplus with regard to policyholders in an amount less than
722     $20,000,000.
723          (c) Credit may not be allowed a domestic ceding insurer if the assuming insurer's
724     accreditation is revoked by the commissioner after a notice and hearing.
725          (5) (a) A domestic ceding insurer is allowed a credit if:
726          (i) the reinsurance is ceded to an assuming insurer that is:
727          (A) domiciled in a state meeting the requirements of Subsection (5)(a)(ii); or
728          (B) in the case of a United States branch of an alien assuming insurer, is entered
729     through a state meeting the requirements of Subsection (5)(a)(ii);
730          (ii) the state described in Subsection (5)(a)(i) employs standards regarding credit for
731     reinsurance substantially similar to those applicable under this section; and
732          (iii) the assuming insurer or United States branch of an alien assuming insurer:
733          (A) maintains a surplus with regard to policyholders in an amount not less than
734     $20,000,000; and
735          (B) submits to the authority of the commissioner to examine the insurer's books and
736     records.
737          (b) The requirements of Subsections (5)(a)(i) and (ii) do not apply to reinsurance ceded
738     and assumed pursuant to a pooling arrangement among insurers in the same holding company

739     system.
740          (6) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
741     assuming insurer that maintains a trust fund:
742          (i) created in accordance with rules made by the commissioner pursuant to Title 63G,
743     Chapter 3, Utah Administrative Rulemaking Act; and
744          (ii) in a qualified United States financial institution for the payment of a valid claim of:
745          (A) a United States ceding insurer of the assuming insurer;
746          (B) an assign of the United States ceding insurer; and
747          (C) a successor in interest to the United States ceding insurer.
748          (b) To enable the commissioner to determine the sufficiency of the trust fund described
749     in Subsection (6)(a), the assuming insurer shall:
750          (i) report annually to the commissioner information substantially the same as that
751     required to be reported on the National Association of Insurance Commissioners Annual
752     Statement form by a licensed insurer; and
753          (ii) (A) submit to examination of its books and records by the commissioner; and
754          (B) pay the cost of an examination.
755          (c) (i) Credit for reinsurance may not be granted under this Subsection (6) unless the
756     form of the trust and any amendment to the trust is approved by:
757          (A) the commissioner of the state where the trust is domiciled; or
758          (B) the commissioner of another state who, pursuant to the terms of the trust
759     instrument, accepts principal regulatory oversight of the trust.
760          (ii) The form of the trust and an amendment to the trust shall be filed with the
761     commissioner of every state in which a ceding insurer beneficiary of the trust is domiciled.
762          (iii) The trust instrument shall provide that a contested claim is valid and enforceable
763     upon the final order of a court of competent jurisdiction in the United States.
764          (iv) The trust shall vest legal title to the trust's assets in one or more of the trust's
765     trustees for the benefit of:
766          (A) a United States ceding insurer of the assuming insurer;
767          (B) an assign of the United States ceding insurer; or
768          (C) a successor in interest to the United States ceding insurer.
769          (v) The trust and the assuming insurer are subject to examination as determined by the

770     commissioner.
771          (vi) The trust shall remain in effect for as long as the assuming insurer has an
772     outstanding obligation due under a reinsurance agreement subject to the trust.
773          (vii) No later than February 28 of each year, the trustee of the trust shall:
774          (A) report to the commissioner in writing the balance of the trust;
775          (B) list the trust's investments at the end of the preceding calendar year; and
776          (C) (I) certify the date of termination of the trust, if so planned; or
777          (II) certify that the trust will not expire before the following December 31.
778          (d) The following requirements apply to the following categories of assuming insurer:
779          (i) For a single assuming insurer:
780          (A) the trust fund shall consist of funds in trust in an amount not less than the assuming
781     insurer's liabilities attributable to reinsurance ceded by United States ceding insurers; and
782          (B) the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000,
783     except as provided in Subsection (6)(d)(ii).
784          (ii) (A) At any time after the assuming insurer has permanently discontinued
785     underwriting new business secured by the trust for at least three full years, the commissioner
786     with principal regulatory oversight of the trust may authorize a reduction in the required
787     trusteed surplus, but only after a finding, based on an assessment of the risk, that the new
788     required surplus level is adequate for the protection of United States ceding insurers,
789     policyholders, and claimants in light of reasonably foreseeable adverse loss development.
790          (B) The risk assessment may involve an actuarial review, including an independent
791     analysis of reserves and cash flows, and shall consider all material risk factors, including, when
792     applicable, the lines of business involved, the stability of the incurred loss estimates, and the
793     effect of the surplus requirements on the assuming insurer's liquidity or solvency.
794          (C) The minimum required trusteed surplus may not be reduced to an amount less than
795     30% of the assuming insurer's liabilities attributable to reinsurance ceded by United States
796     ceding insurers covered by the trust.
797          (iii) For a group acting as assuming insurer, including incorporated and individual
798     unincorporated underwriters:
799          (A) for reinsurance ceded under a reinsurance agreement with an inception,
800     amendment, or renewal date on or after August 1, 1995, the trust shall consist of a trusteed

801     account in an amount not less than the respective underwriters' several liabilities attributable to
802     business ceded by the one or more United States domiciled ceding insurers to an underwriter of
803     the group;
804          (B) for reinsurance ceded under a reinsurance agreement with an inception date on or
805     before July 31, 1995, and not amended or renewed after July 31, 1995, notwithstanding the
806     other provisions of this chapter, the trust shall consist of a trusteed account in an amount not
807     less than the respective underwriters' several insurance and reinsurance liabilities attributable to
808     business written in the United States;
809          (C) in addition to a trust described in Subsection (6)(d)(iii)(A) or (B), the group shall
810     maintain in trust a trusteed surplus of which $100,000,000 is held jointly for the benefit of the
811     one or more United States domiciled ceding insurers of a member of the group for all years of
812     account;
813          (D) the incorporated members of the group:
814          (I) may not be engaged in a business other than underwriting as a member of the group;
815     and
816          (II) are subject to the same level of regulation and solvency control by the group's
817     domiciliary regulator as are the unincorporated members; and
818          (E) within 90 days after the day on which the group's financial statements are due to be
819     filed with the group's domiciliary regulator, the group shall provide to the commissioner:
820          (I) an annual certification by the group's domiciliary regulator of the solvency of each
821     underwriter member; or
822          (II) if a certification is unavailable, a financial statement, prepared by an independent
823     public accountant, of each underwriter member of the group.
824          (iv) For a group of incorporated underwriters under common administration, the group
825     shall:
826          (A) have continuously transacted an insurance business outside the United States for at
827     least three years immediately preceding the day on which the group makes application for
828     accreditation;
829          (B) maintain aggregate policyholders' surplus of at least $10,000,000,000;
830          (C) maintain a trust fund in an amount not less than the group's several liabilities
831     attributable to business ceded by the one or more United States domiciled ceding insurers to a

832     member of the group pursuant to a reinsurance contract issued in the name of the group;
833          (D) in addition to complying with the other provisions of this Subsection (6)(d)(iv),
834     maintain a joint trusteed surplus of which $100,000,000 is held jointly for the benefit of the one
835     or more United States domiciled ceding insurers of a member of the group as additional
836     security for these liabilities; and
837          (E) within 90 days after the day on which the group's financial statements are due to be
838     filed with the group's domiciliary regulator, make available to the commissioner:
839          (I) an annual certification of each underwriter member's solvency by the member's
840     domiciliary regulator; and
841          (II) a financial statement of each underwriter member of the group prepared by an
842     independent public accountant.
843          (7) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
844     assuming insurer that secures the assuming insurer's obligations in accordance with this
845     Subsection (7):
846          (a) The insurer shall be certified by the commissioner as a reinsurer in this state.
847          (b) To be eligible for certification, the assuming insurer shall:
848          (i) be domiciled and licensed to transact insurance or reinsurance in a qualified
849     jurisdiction, as determined by the commissioner pursuant to Subsection (7)(d);
850          (ii) maintain minimum capital and surplus, or its equivalent, in an amount to be
851     determined by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
852     3, Utah Administrative Rulemaking Act;
853          (iii) maintain financial strength ratings from two or more rating agencies considered
854     acceptable by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
855     3, Utah Administrative Rulemaking Act; and
856          (iv) agree to:
857          (A) submit to the jurisdiction of this state;
858          (B) appoint the commissioner as the assuming insurer's agent for service of process in
859     this state;
860          (C) provide security for 100% of the assuming insurer's liabilities attributable to
861     reinsurance ceded by United States ceding insurers if the assuming insurer resists enforcement
862     of a final United States judgment;

863          (D) agree to meet applicable information filing requirements as determined by the
864     commissioner including an application for certification, a renewal and on an ongoing basis; and
865          (E) any other requirements for certification considered relevant by the commissioner.
866          (c) An association, including incorporated and individual unincorporated underwriters,
867     may be a certified reinsurer, if the association:
868          (i) satisfies the requirements of Subsections (7)(a) and (b);
869          (ii) satisfies the association's minimum capital and surplus requirements through the
870     capital and surplus equivalents, net of liabilities, of the association and the association's
871     members, which shall include a joint central fund that may be applied to any unsatisfied
872     obligation of the association or any of the association's members in an amount determined by
873     the commissioner to provide adequate protection;
874          (iii) does not have incorporated members of the association engaged in any business
875     other than underwriting as a member of the association;
876          (iv) is subject to the same level of regulation and solvency control of the incorporated
877     members of the association by the association's domiciliary regulator as are the unincorporated
878     members; and
879          (v) within 90 days after the day on which the association's financial statements are due
880     to be filed with the association's domiciliary regulator, provides to the commissioner:
881          (A) an annual certification by the association's domiciliary regulator of the solvency of
882     each underwriter member; or
883          (B) if a certification described in Subsection (7)(c)(v)(A) is unavailable, financial
884     statements prepared by independent public accountants, of each underwriter member of the
885     association.
886          (d) (i) The commissioner shall create and publish a list of qualified jurisdictions under
887     which an assuming insurer licensed and domiciled in the jurisdiction is eligible to be
888     considered for certification by the commissioner as a certified reinsurer.
889          (ii) To determine whether the domiciliary jurisdiction of a non-United States assuming
890     insurer is eligible to be recognized as a qualified jurisdiction, the commissioner:
891          (A) shall evaluate the appropriateness and effectiveness of the reinsurance supervisory
892     system of the jurisdiction, both initially and on an ongoing basis;
893          (B) shall consider the rights, the benefits, and the extent of reciprocal recognition

894     afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the
895     United States;
896          (C) shall require the qualified jurisdiction to share information and cooperate with the
897     commissioner with respect to all certified reinsurers domiciled within that jurisdiction; and
898          (D) may not recognize a jurisdiction as a qualified jurisdiction if the commissioner has
899     determined that the jurisdiction does not adequately and promptly enforce final United States
900     judgments and arbitration awards.
901          (iii) The commissioner may consider additional factors in determining a qualified
902     jurisdiction.
903          (iv) A list of qualified jurisdictions shall be published through the National Association
904     of Insurance Commissioners' Committee Process.
905          (v) The commissioner shall:
906          (A) consider the National Association of Insurance Commissioners' list of qualified
907     jurisdictions in determining qualified jurisdictions; and
908          (B) if the commissioner approves a jurisdiction as qualified that does not appear on the
909     National Association of Insurance Commissioners' list of qualified jurisdictions, provide
910     thoroughly documented justification in accordance with criteria to be developed by rule made
911     in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
912          (vi) United States jurisdictions that meet the requirement for accreditation under the
913     National Association of Insurance Commissioners' financial standards and accreditation
914     program shall be recognized as qualified jurisdictions.
915          (vii) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified
916     jurisdiction, the commissioner may suspend the reinsurer's certification indefinitely, in lieu of
917     revocation.
918          (e) The commissioner shall:
919          (i) assign a rating to each certified reinsurer, giving due consideration to the financial
920     strength ratings that have been assigned by rating agencies considered acceptable to the
921     commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
922     Rulemaking Act; and
923          (ii) publish a list of all certified reinsurers and their ratings.
924          (f) A certified reinsurer shall secure obligations assumed from United States ceding

925     insurers under this Subsection (7) at a level consistent with the certified reinsurer's rating, as
926     specified in rules made by the commissioner in accordance with Title 63G, Chapter 3, Utah
927     Administrative Rulemaking Act.
928          (i) For a domestic ceding insurer to qualify for full financial statement credit for
929     reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a
930     form acceptable to the commissioner and consistent with Section 31A-17-404.1, or in a
931     multibeneficiary trust in accordance with Subsections (5), (6), and (9), except as otherwise
932     provided in this Subsection (7).
933          (ii) If a certified reinsurer maintains a trust to fully secure the certified reinsurer's
934     obligations subject to Subsections (5), (6), and (9), and chooses to secure the certified
935     reinsurer's obligations incurred as a certified reinsurer in the form of a multibeneficiary trust,
936     the certified reinsurer shall maintain separate trust accounts for the certified reinsurer's
937     obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer
938     with reduced security as permitted by this Subsection (7) or comparable laws of other United
939     States jurisdictions and for the certified reinsurer's obligations subject to Subsections (5), (6),
940     and (9).
941          (iii) It shall be a condition to the grant of certification under this Subsection (7) that the
942     certified reinsurer shall have bound itself:
943          (A) by the language of the trust and agreement with the commissioner with principal
944     regulatory oversight of the trust account; and
945          (B) upon termination of the trust account, to fund, out of the remaining surplus of the
946     trust, any deficiency of any other trust account.
947          (iv) The minimum trusteed surplus requirements provided in Subsections (5), (6), and
948     (9) are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer
949     for the purpose of securing obligations incurred under this Subsection (7), except that the trust
950     shall maintain a minimum trusteed surplus of $10,000,000.
951          (v) With respect to obligations incurred by a certified reinsurer under this Subsection
952     (7), if the security is insufficient, the commissioner:
953          (A) shall reduce the allowable credit by an amount proportionate to the deficiency; and
954          (B) may impose further reductions in allowable credit upon finding that there is a
955     material risk that the certified reinsurer's obligations will not be paid in full when due.

956          (vi) (A) For purposes of this Subsection (7), a certified reinsurer whose certification
957     has been terminated for any reason shall be treated as a certified reinsurer required to secure
958     100% of the certified reinsurer's obligations.
959          (B) As used in this Subsection (7), the term "terminated" refers to revocation,
960     suspension, voluntary surrender, and inactive status.
961          (C) If the commissioner continues to assign a higher rating as permitted by other
962     provisions of this section, the requirement under this Subsection (7)(f)(vi) does not apply to a
963     certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.
964          (g) If an applicant for certification has been certified as a reinsurer in a National
965     Association of Insurance Commissioners' accredited jurisdiction, the commissioner may:
966          (i) defer to that jurisdiction's certification;
967          (ii) defer to the rating assigned by that jurisdiction; and
968          (iii) consider such reinsurer to be a certified reinsurer in this state.
969          (h) (i) A certified reinsurer that ceases to assume new business in this state may request
970     to maintain the certified reinsurer's certification in inactive status in order to continue to qualify
971     for a reduction in security for its in-force business.
972          (ii) An inactive certified reinsurer shall continue to comply with all applicable
973     requirements of this Subsection (7).
974          (iii) The commissioner shall assign a rating to a reinsurer that qualifies under this
975     Subsection (7)(h), that takes into account, if relevant, the reasons why the reinsurer is not
976     assuming new business.
977          (8) (a) As used in this Subsection (8):
978          (i) "Covered agreement" means an agreement entered into pursuant to Dodd-Frank
979     Wall Street Reform and Consumer Protection Act, 31 U.S.C. Sections 313 and 314, that:
980          (A) is currently in effect or in a period of provisional application; and
981          (B) addresses the elimination, under specified conditions, of collateral requirements as
982     a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this
983     state or for allowing the ceding insurer to recognize credit for reinsurance.
984          (ii) "Reciprocal jurisdiction" means a jurisdiction that is:
985          (A) a non-United States jurisdiction that is subject to an in-force covered agreement
986     with the United States, each within its legal authority, or, in the case of a covered agreement

987     between the United States and European Union, is a member state of the European Union;
988          (B) a United States jurisdiction that meets the requirements for accreditation under the
989     National Association of Insurance Commissioners' financial standards and accreditation
990     program; or
991          (C) a qualified jurisdiction, as determined by the commissioner in accordance with
992     Subsection (7)(d), that is not otherwise described in this Subsection (8)(a)(ii) and meets certain
993     additional requirements, consistent with the terms and conditions of in-force covered
994     agreements, as specified by the commissioner in rule made in accordance with Title 63G,
995     Chapter 3, Utah Administrative Rulemaking Act.
996          (b) (i) Credit is allowed when the reinsurance is ceded to an assuming insurer meeting
997     each of the conditions set forth in this Subsection (8)(b).
998          (ii) The assuming insurer must have the assuming insurer's head office in or be
999     domiciled in, as applicable, and be licensed in a reciprocal jurisdiction.
1000          (iii) (A) The assuming insurer shall have and maintain, on an ongoing basis, minimum
1001     capital and surplus, or its equivalent, calculated according to the methodology of the assuming
1002     insurer's domiciliary jurisdiction, in an amount to be set forth in regulation.
1003          (B) If the assuming insurer is an association, including incorporated and individual
1004     unincorporated underwriters, the assuming insurer shall have and maintain, on an ongoing
1005     basis, minimum capital and surplus equivalents (net of liabilities), calculated according to the
1006     methodology applicable in the assuming insurer's domiciliary jurisdiction, and a central fund
1007     containing a balance in amounts set forth in regulation.
1008          (iv) (A) The assuming insurer must have and maintain, on an ongoing basis, a
1009     minimum solvency or capital ration, as applicable, which will be set forth in regulation.
1010          (B) If the assuming insurer is an association, including incorporated and individual
1011     unincorporated underwriters, the assuming insurer must have and maintain, on an ongoing
1012     basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming
1013     insurer has the assuming insurer's head office or is domiciled, as applicable, and is also
1014     licensed.
1015          (v) The assuming insurer must agree and provide adequate assurance to the
1016     commissioner, in a form specified by the commissioner by rule made in accordance with Title
1017     63G, Chapter 3, Utah Administrative Rulemaking Act, as follows:

1018          (A) the assuming insurer must provide prompt written notice and explanation to the
1019     commissioner if the assuming insurer falls below the minimum requirements set forth in
1020     Subsection (8)(c) or (d), or if any regulatory action is taken against the assuming insurer for
1021     serious noncompliance with applicable law;
1022          (B) the assuming insurer must consent in writing to the jurisdiction of the courts of this
1023     state and to the appointment of the commissioner as agent for service of process, however the
1024     commissioner may require that consent for service of process be provided to the commissioner
1025     and included in each reinsurance agreement and nothing in this provision shall limit, or in any
1026     way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute
1027     resolution mechanisms, except to the extent such agreements are unenforceable under
1028     applicable insolvency or delinquency laws;
1029          (C) the assuming insurer must consent in writing to pay all final judgments, wherever
1030     enforcement is sought, obtained by a ceding insurer or the ceding insurer's legal successor, that
1031     have been declared enforceable in the jurisdiction where the judgment was obtained;
1032          (D) each reinsurance agreement must include a provision requiring the assuming
1033     insurer to provide security in an amount equal to 100% of the assuming insurer's liabilities
1034     attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists
1035     enforcement of a final judgment that is enforceable under the law of the jurisdiction in which
1036     the final judgement was obtained or a properly enforceable arbitration award, whether obtained
1037     by the ceding insurer or by the ceding insurer's legal successor on behalf of the ceding insurer's
1038     resolution estate; and
1039          (E) the assuming insurer must confirm that the assuming insurer is not presently
1040     participating in any solvent scheme of arrangement which involved this state's ceding insurers,
1041     and agree to notify the ceding insurer and the commissioner and to provide security:
1042          (I) in an amount equal to 100% of the assuming insurer's liabilities to the ceding
1043     insurer, should the assuming insurer enter into such a solvent scheme of arrangement; and
1044          (II) in a form consistent with the provisions of Subsections (7) and (10) and as
1045     specified by the commissioner in regulation.
1046          (vi) The assuming insurer or the assuming insurer's legal successor must provide, if
1047     requested by the commissioner, on behalf of the assuming insurer and any legal predecessors,
1048     certain documentation to the commissioner, as specified by the commissioner by rule made in

1049     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1050          (vii) The assuming insurer must maintain a practice of prompt payment of claims under
1051     reinsurance agreements, pursuant to criteria set forth in rule made in accordance with Title
1052     63G, Chapter 3, Utah Administrative Rulemaking Act.
1053          (viii) The assuming insurer's supervisory authority must confirm to the commissioner
1054     on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily
1055     reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements
1056     set forth in Subsections (8)(c) and (d).
1057          (ix) Nothing in this provision precludes an assuming insurer from providing the
1058     commissioner with information on a voluntary basis.
1059          (c) (i) The commissioner shall timely create and publish a list of reciprocal
1060     jurisdictions.
1061          (ii) (A) A list of reciprocal jurisdictions is published through the National Association
1062     of Insurance Commissioners' Committee Process.
1063          (B) The commissioner's list of reciprocal jurisdictions shall include any reciprocal
1064     jurisdiction as defined in this Subsection (8), and shall consider any other reciprocal
1065     jurisdictions in accordance with the criteria developed under rule made in accordance with
1066     Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1067          (iii) (A) The commissioner may remove a jurisdiction from the list of reciprocal
1068     jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a
1069     reciprocal jurisdiction, in accordance with a process set forth in rule made in accordance with
1070     Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except that the commissioner may
1071     not remove from the list a reciprocal jurisdiction.
1072          (B) Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance
1073     ceded to an assuming insurer whose home office or domicile is in that jurisdiction is allowed, if
1074     otherwise allowed under this chapter.
1075          (d) (i) The commissioner shall timely create and publish a list of assuming insurers that
1076     have satisfied the conditions set forth in this subsection and to which cessions shall be granted
1077     credit in accordance with this Subsection (8).
1078          (ii) The commissioner may add an assuming insurer to such list if a National
1079     Association of Insurance Commissioners accredited jurisdiction has added such assuming

1080     insurer to a list of such assuming insurers or if, upon initial eligibility, the assuming insurer
1081     submits the information to the commissioner as required under this Subsection (8) and
1082     complies with any additional requirements that the commissioner may impose by rule made in
1083     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except to the
1084     extent that they conflict with an applicable covered agreement.
1085          (e) (i) If the commissioner determines that an assuming insurer no longer meets one or
1086     more of the requirements under this Subsection (8), the commissioner may revoke or suspend
1087     the eligibility of the assuming insurer for recognition under this Subsection (8) in accordance
1088     with procedures established in rule made in accordance with Title 63G, Chapter 3, Utah
1089     Administrative Rulemaking Act.
1090          (ii) (A) While an assuming insurer's eligibility is suspended, no reinsurance agreement
1091     issued, amended, or renewed after the day on which the suspension is effective qualifies for
1092     credit except to the extent that the assuming insurer's obligations under the contract are secured
1093     in accordance with Subsection (10).
1094          (B) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be
1095     granted after the day on which the revocation is effective with respect to any reinsurance
1096     agreements entered into by the assuming insurer, including reinsurance agreements entered into
1097     before the day on which the revocation is effective, except to the extent that the assuming
1098     insurer's obligations under the contract are secured in a form acceptable to the commissioner
1099     and consistent with the provisions of Subsection (10).
1100          (f) If subject to a legal process of rehabilitation, liquidation, or conservation, as
1101     applicable, the ceding insurer, or the ceding insurer's representative, may seek and, if
1102     determined appropriate by the court in which the proceedings are pending, may obtain an order
1103     requiring that the assuming insurer post security for all outstanding ceded liabilities.
1104          (g) Nothing in this Subsection (8) limits or in any way alters the capacity of parties to a
1105     reinsurance agreement to agree on requirements for security or other terms in that reinsurance
1106     agreement, except as expressly prohibited by this chapter or other applicable law or regulation.
1107          (h) (i) Credit may be taken under this Subsection (8) only for reinsurance agreements
1108     entered into, amended, or renewed on or after the effective date of the statute adding this
1109     Subsection (8), and only with respect to losses incurred and reserves reported on or after the
1110     later of:

1111          (A) the day on which the assuming insurer has met all eligibility requirements pursuant
1112     to Subsection (8)(b); and
1113          (B) the day on which the new reinsurance agreement, amendment, or renewal is
1114     effective.
1115          (ii) This Subsection (8) does not alter or impair a ceding insurer's right to take credit
1116     for reinsurance, to the extent that credit is not available under this Subsection (8), as long as the
1117     reinsurance qualifies for credit under any other applicable provision of this chapter.
1118          (iii) Nothing in this Subsection (8) authorizes an assuming insurer to withdraw or
1119     reduce the security provided under any reinsurance agreement except as permitted by the terms
1120     of the agreement.
1121          (iv) Nothing in this Subsection (8) limits, or in any way alters, the capacity of parties to
1122     any reinsurance agreement to renegotiate the agreement.
1123          (9) If reinsurance is ceded to an assuming insurer not meeting the requirements of
1124     Subsection (3), (4), (5), (6), (7), or (8), a domestic ceding insurer is allowed credit only as to
1125     the insurance of a risk located in a jurisdiction where the reinsurance is required by applicable
1126     law or regulation of that jurisdiction.
1127          (10) (a) An asset or a reduction from liability for the reinsurance ceded by a domestic
1128     insurer to an assuming insurer not meeting the requirements of Subsection (3), (4), (5), (6), (7),
1129     or (8) shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer.
1130          (b) The commissioner may adopt by rule made in accordance with Title 63G, Chapter
1131     3, Utah Administrative Rulemaking Act, specific additional requirements relating to or setting
1132     forth:
1133          (i) the valuation of assets or reserve credits;
1134          (ii) the amount and forms of security supporting reinsurance arrangements; and
1135          (iii) the circumstances pursuant to which credit will be reduced or eliminated.
1136          (c) (i) The reduction shall be in the amount of funds held by or on behalf of the ceding
1137     insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with
1138     the assuming insurer as security for the payment of obligations thereunder, if the security is:
1139          (A) held in the United States subject to withdrawal solely by, and under the exclusive
1140     control of, the ceding insurer; or
1141          (B) in the case of a trust, held in a qualified United States financial institution.

1142          (ii) The security described in this Subsection (10)(c) may be in the form of:
1143          (A) cash;
1144          (B) securities listed by the Securities Valuation Office of the National Association of
1145     Insurance Commissioners, including those deemed exempt from filing as defined by the
1146     Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted
1147     assets;
1148          (C) clean, irrevocable, unconditional letters of credit, issued or confirmed by a
1149     qualified United States financial institution effective no later than December 31 of the year for
1150     which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or
1151     before the filing date of its annual statement;
1152          (D) letters of credit meeting applicable standards of issuer acceptability as of the dates
1153     of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's
1154     subsequent failure to meet applicable standards of issuer acceptability, continue to be
1155     acceptable as security until their expiration, extension, renewal, modification or amendment,
1156     whichever first occurs; or
1157          (E) any other form of security acceptable to the commissioner.
1158          (11) Reinsurance credit is not allowed a domestic ceding insurer unless the assuming
1159     insurer under the reinsurance contract submits to the jurisdiction of Utah courts by:
1160          (a) (i) being an admitted insurer; and
1161          (ii) submitting to jurisdiction under Section 31A-2-309;
1162          (b) having irrevocably appointed the commissioner as the domestic ceding insurer's
1163     agent for service of process in an action arising out of or in connection with the reinsurance,
1164     which appointment is made under Section 31A-2-309; or
1165          (c) agreeing in the reinsurance contract:
1166          (i) that if the assuming insurer fails to perform the assuming insurer's obligations under
1167     the terms of the reinsurance contract, the assuming insurer, at the request of the ceding insurer,
1168     shall:
1169          (A) submit to the jurisdiction of a court of competent jurisdiction in a state of the
1170     United States;
1171          (B) comply with all requirements necessary to give the court jurisdiction; and
1172          (C) abide by the final decision of the court or of an appellate court in the event of an

1173     appeal; and
1174          (ii) to designate the commissioner or a specific attorney licensed to practice law in this
1175     state as its attorney upon whom may be served lawful process in an action, suit, or proceeding
1176     instituted by or on behalf of the ceding company.
1177          (12) Submitting to the jurisdiction of Utah courts under Subsection (11) does not
1178     override a duty or right of a party under the reinsurance contract, including a requirement that
1179     the parties arbitrate their disputes.
1180          (13) (a) If an assuming insurer does not meet the requirements of Subsection (3), (4),
1181     (5), or (8), the credit permitted by Subsection (6) or (7) may not be allowed unless the
1182     assuming insurer agrees in the trust instrument to the conditions described in Subsections
1183     (13)(b) through (e).
1184          (b) (i) Notwithstanding any other provision in the trust instrument, if an event
1185     described in Subsection (13)(b)(ii) occurs the trustee shall comply with:
1186          (A) an order of the commissioner with regulatory oversight over the trust; or
1187          (B) an order of a court of competent jurisdiction directing the trustee to transfer to the
1188     commissioner with regulatory oversight all of the assets of the trust fund.
1189          (ii) This Subsection (13)(b) applies if:
1190          (A) the trust fund is inadequate because the trust contains an amount less than the
1191     amount required by Subsection (6)(d); or
1192          (B) the grantor of the trust is:
1193          (I) declared insolvent; or
1194          (II) placed into receivership, rehabilitation, liquidation, or similar proceeding under the
1195     laws of its state or country of domicile.
1196          (c) The assets of a trust fund described in Subsection (13)(b) shall be distributed by and
1197     a claim shall be filed with and valued by the commissioner with regulatory oversight in
1198     accordance with the laws of the state in which the trust is domiciled that are applicable to the
1199     liquidation of a domestic insurance company.
1200          (d) If the commissioner with regulatory oversight determines that the assets of the trust
1201     fund, or any part of the assets, are not necessary to satisfy the claims of the one or more United
1202     States ceding insurers of the grantor of the trust, the assets, or a part of the assets, shall be
1203     returned by the commissioner with regulatory oversight to the trustee for distribution in

1204     accordance with the trust instrument.
1205          (e) A grantor shall waive any right otherwise available to the grantor under United
1206     States law that is inconsistent with this Subsection (13).
1207          (14) (a) If an accredited or certified reinsurer ceases to meet the requirements for
1208     accreditation or certification, the commissioner may suspend or revoke the reinsurer's
1209     accreditation or certification.
1210          (b) The commissioner shall give the reinsurer notice and opportunity for hearing.
1211          (c) The suspension or revocation may not take effect until after the day on which the
1212     commissioner issues an order after a hearing, unless:
1213          (i) the reinsurer waives the reinsurer's right to hearing;
1214          (ii) the commissioner's order is based on:
1215          (A) regulatory action by the reinsurer's domiciliary jurisdiction; or
1216          (B) the voluntary surrender or termination of the reinsurer's eligibility to transact
1217     insurance or reinsurance business in its domiciliary jurisdiction or primary certifying state
1218     under Subsection (7)(g); or
1219          (iii) the commissioner's finding that an emergency requires immediate action and a
1220     court of competent jurisdiction has not stayed the commissioner's action.
1221          (d) While a reinsurer's accreditation or certification is suspended, no reinsurance
1222     contract issued or renewed after the effective date of the suspension qualifies for credit except
1223     to the extent that the reinsurer's obligations under the contract are secured in accordance with
1224     Section 31A-17-404.1.
1225          (e) If a reinsurer's accreditation or certification is revoked, no credit for reinsurance
1226     may be granted after the effective date of the revocation except to the extent that the reinsurer's
1227     obligations under the contract are secured in accordance with Subsection (7)(f) or Section
1228     31A-17-404.1.
1229          (15) (a) A ceding insurer shall take steps to manage the ceding insurer's reinsurance
1230     recoverables proportionate to the ceding insurer's own book of business.
1231          (b) (i) A domestic ceding insurer shall notify the commissioner within 30 days after the
1232     day on which reinsurance recoverables from any single assuming insurer, or group of affiliated
1233     assuming insurers:
1234          (A) exceeds 50% of the domestic ceding insurer's last reported surplus to

1235     policyholders; or
1236          (B) after it is determined that reinsurance recoverables from any single assuming
1237     insurer, or group of affiliated assuming insurers, is likely to exceed 50% of the domestic ceding
1238     insurer's last reported surplus to policyholders.
1239          (ii) The notification required by Subsection (15)(b)(i) shall demonstrate that the
1240     exposure is safely managed by the domestic ceding insurer.
1241          (c) A ceding insurer shall take steps to diversify the ceding insurer's reinsurance
1242     program.
1243          (d) (i) A domestic ceding insurer shall notify the commissioner within 30 days after the
1244     day on which the ceding insurer cedes or is likely to cede more than 20% of the ceding insurer's
1245     gross written premium in the prior calendar year to any:
1246          (A) single assuming insurer; or
1247          (B) group of affiliated assuming insurers.
1248          (ii) The notification shall demonstrate that the exposure is safely managed by the
1249     domestic ceding insurer.
1250          (16) A ceding insurer licensed under Chapter 5, Domestic Stock and Mutual Insurance
1251     Corporations, Chapter 7, Nonprofit Health Service Insurance Corporations, Chapter 8, Health
1252     Maintenance Organizations and Limited Health Plans, or Chapter 9, Insurance Fraternals, [or
1253     Chapter 14, Foreign Insurers is not] may be allowed credit if:
1254          (a) the reinsurance is ceded to an assuming domestic [or foreign] captive insurer[,
1255     unless]; and
1256          (b) the assuming domestic [or foreign] captive insurer complies with:
1257          (i) Sections 31A-2-202 through 31A-2-205;
1258          [(a)] (ii) Chapter 4, Insurers in General;
1259          [(b)] (iii) Chapter 16, Insurance Holding Companies;
1260          [(c)] (iv) Chapter 16a, Risk Management and Own Risk and Solvency Assessment Act;
1261          [(d)] (v) Chapter 17, Determination of Financial Condition; [and]
1262          [(e)] (vi) Chapter 18, Investments[.]; and
1263          (vii) any other requirement that, in the commissioner's discretion, is necessary to
1264     promote the captive insurer's solvency.
1265          Section 7. Section 31A-19a-209 is amended to read:

1266          31A-19a-209. Special provisions for title insurance.
1267          (1) (a) (i) The Title and Escrow Commission [shall adopt rules] may make rules, in
1268     accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and subject to
1269     Section 31A-2-404, establishing rate standards and rating methods [for individual title
1270     insurance producers and agency title insurance producers].
1271          (ii) The commissioner shall determine compliance with rate standards and rating
1272     methods for title insurers, individual title insurance producers, and agency title insurance
1273     producers.
1274          (b) In addition to the considerations in determining compliance with rate standards and
1275     rating methods as set forth in Sections 31A-19a-201 and 31A-19a-202, including for title
1276     insurers, the commissioner and the Title and Escrow Commission shall consider the costs and
1277     expenses incurred by title insurers, individual title insurance producers, and agency title
1278     insurance producers [peculiar] pertaining to the business of title insurance including:
1279          (i) the maintenance of title plants; and
1280          (ii) the examining of public records to determine insurability of title to real
1281     [redevelopment] property.
1282          [(2) (a) A title insurer, an agency title insurance producer, or an individual title
1283     insurance producer who is not an employee of a title insurer or who is not designated by an
1284     agency title insurance producer shall file with the commissioner:]
1285          [(i) a schedule of the escrow charges that the title insurer, individual title insurance
1286     producer, or agency title insurance producer proposes to use in this state for services performed
1287     in connection with the issuance of policies of title insurance; and]
1288          [(ii) any changes to the schedule of the escrow charges described in Subsection
1289     (2)(a)(i).]
1290          [(b) Except for a schedule filed by a title insurer under this Subsection (2), a schedule
1291     filed under this Subsection (2) is subject to review by the Title and Escrow Commission.]
1292          [(c) (i) The schedule of escrow charges required to be filed by Subsection (2)(a)(i)
1293     takes effect on the day on which the schedule of escrow charges is filed.]
1294          [(ii) Any changes to the schedule of the escrow charges required to be filed by
1295     Subsection (2)(a)(ii) take effect on the day specified in the change to the schedule of escrow
1296     charges except that the effective date may not be less than 30 calendar days after the day on

1297     which the change to the schedule of escrow charges is filed.]
1298          [(3)] (2) A title insurer, individual title insurance producer, or agency title insurance
1299     producer may not [file or] use any rate or other charge relating to the business of title
1300     insurance, including rates or charges [filed] for escrow that would cause the title insurance
1301     company, individual title insurance producer, or agency title insurance producer to:
1302          (a) operate at less than the cost of doing[:]
1303          [(i)] the insurance business; or
1304          [(ii) the escrow business; or]
1305          (b) fail to adequately underwrite a title insurance policy.
1306          [(4) (a) All or any of the schedule of rates or schedule of charges, including the
1307     schedule of escrow charges, may be changed or amended at any time, subject to the limitations
1308     in this Subsection (4).]
1309          [(b) Each change or amendment shall:]
1310          [(i) be filed with the commissioner, subject to review by the Title and Escrow
1311     Commission; and]
1312          [(ii) state the effective date of the change or amendment, which may not be less than 30
1313     calendar days after the day on which the change or amendment is filed.]
1314          [(c) Any change or amendment remains in force for a period of at least 90 calendar
1315     days from the change or amendment's effective date.]
1316          [(5) While the schedule of rates and schedule of charges are effective, a copy of each
1317     shall be:]
1318          [(a) retained in each of the offices of:]
1319          [(i) the title insurer in this state;]
1320          [(ii) the title insurer's individual title insurance producers or agency title insurance
1321     producers in this state; and]
1322          [(b) upon request, furnished to the public.]
1323          [(6) Except in accordance with the schedules of rates and charges filed with the
1324     commissioner, a title insurer, individual title insurance producer, or agency title insurance
1325     producer may not make or impose any premium or other charge:]
1326          [(a) in connection with the issuance of a policy of title insurance; or]
1327          [(b) for escrow services performed in connection with the issuance of a policy of title

1328     insurance.]
1329          Section 8. Section 31A-22-728 is enacted to read:
1330          31A-22-728. Large employer health benefit plan required report.
1331          (1) As used in this section:
1332          (a) "Claims run-out period" means the period beginning on the first day following the
1333     last day of a plan year and ending on the 90th day following the last day of a plan year.
1334          (b) "Large employer" means an employer who:
1335          (i) with respect to a calendar year and to a plan year:
1336          (A) employed an average of at least 51 employees on a business day during the
1337     preceding calendar year; and
1338          (B) employs at least one employee on the first day of the plan year; and
1339          (ii) has at least 51 but fewer than 100 enrolled eligible employees enrolled in a group
1340     health benefit plan during each consecutive month during the plan year.
1341          (c) "Medical loss ratio" means a group health benefit plan's paid claims incurred during
1342     a plan year, including the claims run-out period, divided by the total premium revenue
1343     collected for the plan year.
1344          (2) Except as provided in Subsections (6), beginning on January 1, 2024, an insurer
1345     that offers a large employer health benefit plan to a large employer shall annually provide a
1346     report, upon request of:
1347          (a) the large employer;
1348          (b) the large employer's appointed producer; or
1349          (c) the large employer's consultant.
1350          (3) The report described in Subsection (2) shall include:
1351          (a) after the first renewal, the health benefit plan's aggregate performance from the
1352     immediately preceding plan year that describes whether the health benefit plan had a medical
1353     loss ratio of:
1354          (i) less than 85%;
1355          (ii) between 85% and 125%; or
1356          (iii) greater than 125%; and
1357          (b) after the second renewal and each subsequent renewal thereafter, a summary of the
1358     health benefit plan's aggregate 24-month medical loss ratio from the immediately preceding

1359     two plan years combined.
1360          (4) An insurer that offers a large employer health benefit plan shall provide the
1361     requested report described in Subsection (2) not less than 30 days after the claims run-out
1362     period.
1363          (5) (a) The report described in Subsection (2) is proprietary to the large employer, the
1364     large employer's appointed producer, or the large employer's consultant.
1365          (b) A person may not share the report described in Subsection (2) with a party other
1366     than a party described in Subsection (5)(a).
1367          (6) An insurer is not required to provide a report as described in this section if:
1368          (a) the health benefit plan is a qualified health plan as defined in 45 C.F.R. Sec.
1369     155.20;
1370          (b) the health benefit plan is issued to a group other than an employee group described
1371     in Section 31A-22-502;
1372          (c) the large employer has not had continuous large employer health benefit plan
1373     coverage with the insurer for at least 18 months before the date on which the large employer
1374     requests the report;
1375          (d) the large employer does not renew coverage with the insurer; or
1376          (e) the insurer reasonably believes that providing the report would disclose information
1377     described in Subsection 13-61-102(2)(g).
1378          (7) An insurer that provides a report in compliance with this section is immune from
1379     civil liability for the insurer's acts or omissions in providing information required under
1380     Subsection (3).
1381          Section 9. Section 31A-23a-106 is amended to read:
1382          31A-23a-106. License types.
1383          (1) (a) A resident or nonresident license issued under this chapter shall be issued under
1384     the license types described under Subsection (2).
1385          (b) A license type and a line of authority pertaining to a license type describe the type
1386     of licensee and the lines of business that a licensee may sell, solicit, or negotiate. A license
1387     type is intended to describe the matters to be considered under any education, examination, and
1388     training required of a license applicant under Sections 31A-23a-108, 31A-23a-202, and
1389     31A-23a-203.

1390          (2) (a) A producer license type includes the following lines of authority:
1391          (i) life insurance, including a nonvariable contract;
1392          (ii) variable contracts, including variable life and annuity, if the producer has the life
1393     insurance line of authority;
1394          (iii) accident and health insurance, including a contract issued to a policyholder under
1395     Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
1396     Organizations and Limited Health Plans;
1397          (iv) property insurance;
1398          (v) casualty insurance, including a surety or other bond;
1399          (vi) title insurance under one or more of the following categories:
1400          (A) title examination, including authority to act as a title marketing representative;
1401          (B) escrow, including authority to act as a title marketing representative; and
1402          (C) title marketing representative only; and
1403          (vii) personal lines insurance.
1404          (b) A surplus lines producer license type includes the following lines of authority:
1405          (i) property insurance, if the person holds an underlying producer license with the
1406     property line of insurance; and
1407          (ii) casualty insurance, if the person holds an underlying producer license with the
1408     casualty line of authority.
1409          (c) A limited line producer license type includes the following limited lines of
1410     authority:
1411          (i) limited line credit insurance;
1412          (ii) travel insurance, as set forth in Part 9, Travel Insurance Act;
1413          (iii) motor club insurance;
1414          (iv) car rental related insurance;
1415          (v) legal expense insurance;
1416          (vi) crop insurance;
1417          (vii) self-service storage insurance;
1418          (viii) bail bond producer;
1419          (ix) guaranteed asset protection waiver; [and]
1420          (x) portable electronics insurance[.]; and

1421          (xi) pet insurance.
1422          (d) A consultant license type includes the following lines of authority:
1423          (i) life insurance, including a nonvariable contract;
1424          (ii) variable contracts, including variable life and annuity, if the consultant has the life
1425     insurance line of authority;
1426          (iii) accident and health insurance, including a contract issued to a policyholder under
1427     Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
1428     Organizations and Limited Health Plans;
1429          (iv) property insurance;
1430          (v) casualty insurance, including a surety or other bond; and
1431          (vi) personal lines insurance.
1432          (e) A managing general agent license type includes the following lines of authority:
1433          (i) life insurance, including a nonvariable contract;
1434          (ii) variable contracts, including variable life and annuity, if the managing general
1435     agent has the life insurance line of authority;
1436          (iii) accident and health insurance, including a contract issued to a policyholder under
1437     Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
1438     Organizations and Limited Health Plans;
1439          (iv) property insurance;
1440          (v) casualty insurance, including a surety or other bond; and
1441          (vi) personal lines insurance.
1442          (f) A reinsurance intermediary license type includes the following lines of authority:
1443          (i) life insurance, including a nonvariable contract;
1444          (ii) variable contracts, including variable life and annuity, if the reinsurance
1445     intermediary has the life insurance line of authority;
1446          (iii) accident and health insurance, including a contract issued to a policyholder under
1447     Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
1448     Organizations and Limited Health Plans;
1449          (iv) property insurance;
1450          (v) casualty insurance, including a surety or other bond; and
1451          (vi) personal lines insurance.

1452          (g) A person who holds a license under Subsection (2)(a) has the qualifications
1453     necessary to act as a holder of a license under Subsection (2)(c), except that the person may not
1454     act under Subsection (2)(c)(viii) or (ix).
1455          (3) (a) The commissioner may by rule recognize other producer, surplus lines producer,
1456     limited line producer, consultant, managing general agent, or reinsurance intermediary lines of
1457     authority as to kinds of insurance not listed under Subsections (2)(a) through (f).
1458          (b) Notwithstanding Subsection (3)(a), for purposes of title insurance the Title and
1459     Escrow Commission may by rule, with the concurrence of the commissioner and subject to
1460     Section 31A-2-404, recognize other categories for an individual title insurance producer or
1461     agency title insurance producer line of authority not listed under Subsection (2)(a)(vi).
1462          (4) The variable contracts line of authority requires:
1463          (a) for a producer, licensure by the Financial Industry Regulatory Authority as a:
1464          (i) registered broker-dealer; or
1465          (ii) broker-dealer agent, with a current registration with a broker-dealer; and
1466          (b) for a consultant, registration with the Securities and Exchange Commission or
1467     licensure by the Utah Division of Securities as an:
1468          (i) investment adviser; or
1469          (ii) investment adviser representative, with a current association with an investment
1470     adviser.
1471          (5) A surplus lines producer is a producer who has a surplus lines license.
1472          Section 10. Section 31A-23a-111 is amended to read:
1473          31A-23a-111. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
1474     terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
1475          (1) A license type issued under this chapter remains in force until:
1476          (a) revoked or suspended under Subsection (5);
1477          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
1478     administrative action;
1479          (c) the licensee dies or is adjudicated incompetent as defined under:
1480          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
1481          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
1482     Minors;

1483          (d) lapsed under Section 31A-23a-113; or
1484          (e) voluntarily surrendered.
1485          (2) The following may be reinstated within one year after the day on which the license
1486     is no longer in force:
1487          (a) a lapsed license; or
1488          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
1489     not be reinstated after the license period in which the license is voluntarily surrendered.
1490          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
1491     license, submission and acceptance of a voluntary surrender of a license does not prevent the
1492     department from pursuing additional disciplinary or other action authorized under:
1493          (a) this title; or
1494          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
1495     Administrative Rulemaking Act.
1496          (4) A line of authority issued under this chapter remains in force until:
1497          (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
1498     [or]
1499          (b) the supporting license type:
1500          (i) is revoked or suspended under Subsection (5);
1501          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
1502     administrative action;
1503          (iii) lapses under Section 31A-23a-113; or
1504          (iv) is voluntarily surrendered; or
1505          (c) the licensee dies or is adjudicated incompetent as defined under:
1506          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
1507          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
1508     Minors.
1509          (5) (a) If the commissioner makes a finding under Subsection (5)(b), as part of an
1510     adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
1511     commissioner may:
1512          (i) revoke:
1513          (A) a license; or

1514          (B) a line of authority;
1515          (ii) suspend for a specified period of 12 months or less:
1516          (A) a license; or
1517          (B) a line of authority;
1518          (iii) limit in whole or in part:
1519          (A) a license; or
1520          (B) a line of authority;
1521          (iv) deny a license application;
1522          (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
1523          (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
1524     Subsection (5)(a)(v).
1525          (b) The commissioner may take an action described in Subsection (5)(a) if the
1526     commissioner finds that the licensee or license applicant:
1527          (i) is unqualified for a license or line of authority under Section 31A-23a-104,
1528     31A-23a-105, or 31A-23a-107;
1529          (ii) violates:
1530          (A) an insurance statute;
1531          (B) a rule that is valid under Subsection 31A-2-201(3); or
1532          (C) an order that is valid under Subsection 31A-2-201(4);
1533          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
1534     delinquency proceedings in any state;
1535          (iv) fails to pay a final judgment rendered against the person within 60 days after the
1536     day on which the judgment became final;
1537          (v) fails to meet the same good faith obligations in claims settlement that is required of
1538     admitted insurers;
1539          (vi) is affiliated with and under the same general management or interlocking
1540     directorate or ownership as another insurance producer that transacts business in this state
1541     without a license;
1542          (vii) refuses:
1543          (A) to be examined; or
1544          (B) to produce its accounts, records, and files for examination;

1545          (viii) has an officer who refuses to:
1546          (A) give information with respect to the insurance producer's affairs; or
1547          (B) perform any other legal obligation as to an examination;
1548          (ix) provides information in the license application that is:
1549          (A) incorrect;
1550          (B) misleading;
1551          (C) incomplete; or
1552          (D) materially untrue;
1553          (x) violates an insurance law, valid rule, or valid order of another regulatory agency in
1554     any jurisdiction;
1555          (xi) obtains or attempts to obtain a license through misrepresentation or fraud;
1556          (xii) improperly withholds, misappropriates, or converts money or properties received
1557     in the course of doing insurance business;
1558          (xiii) intentionally misrepresents the terms of an actual or proposed:
1559          (A) insurance contract;
1560          (B) application for insurance; or
1561          (C) life settlement;
1562          (xiv) has been convicted of, or has entered a plea in abeyance as defined in Section
1563     77-2a-1 to:
1564          (A) a felony; or
1565          (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
1566          (xv) admits or is found to have committed an insurance unfair trade practice or fraud;
1567          (xvi) in the conduct of business in this state or elsewhere:
1568          (A) uses fraudulent, coercive, or dishonest practices; or
1569          (B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
1570          (xvii) has had an insurance license or other professional or occupational license, or an
1571     equivalent to an insurance license or registration, or other professional or occupational license
1572     or registration:
1573          (A) denied;
1574          (B) suspended;
1575          (C) revoked; or

1576          (D) surrendered to resolve an administrative action;
1577          (xviii) forges another's name to:
1578          (A) an application for insurance; or
1579          (B) a document related to an insurance transaction;
1580          (xix) improperly uses notes or another reference material to complete an examination
1581     for an insurance license;
1582          (xx) knowingly accepts insurance business from an individual who is not licensed;
1583          (xxi) fails to comply with an administrative or court order imposing a child support
1584     obligation;
1585          (xxii) fails to:
1586          (A) pay state income tax; or
1587          (B) comply with an administrative or court order directing payment of state income
1588     tax;
1589          (xxiii) has been convicted of violating the federal Violent Crime Control and Law
1590     Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
1591     in the business of insurance or participate in such business as required by 18 U.S.C. Sec. 1033;
1592          (xxiv) engages in a method or practice in the conduct of business that endangers the
1593     legitimate interests of customers and the public; or
1594          (xxv) has been convicted of any criminal felony involving dishonesty or breach of trust
1595     and has not obtained written consent to engage in the business of insurance or participate in
1596     such business as required by 18 U.S.C. Sec. 1033.
1597          (c) For purposes of this section, if a license is held by an agency, both the agency itself
1598     and any individual designated under the license are considered to be the holders of the license.
1599          (d) If an individual designated under the agency license commits an act or fails to
1600     perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
1601     the commissioner may suspend, revoke, or limit the license of:
1602          (i) the individual;
1603          (ii) the agency, if the agency:
1604          (A) is reckless or negligent in its supervision of the individual; or
1605          (B) knowingly participates in the act or failure to act that is the ground for suspending,
1606     revoking, or limiting the license; or

1607          (iii) (A) the individual; and
1608          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
1609          (6) A licensee under this chapter is subject to the penalties for acting as a licensee
1610     without a license if:
1611          (a) the licensee's license is:
1612          (i) revoked;
1613          (ii) suspended;
1614          (iii) limited;
1615          (iv) surrendered in lieu of administrative action;
1616          (v) lapsed; or
1617          (vi) voluntarily surrendered; and
1618          (b) the licensee:
1619          (i) continues to act as a licensee; or
1620          (ii) violates the terms of the license limitation.
1621          (7) A licensee under this chapter shall immediately report to the commissioner:
1622          (a) a revocation, suspension, or limitation of the person's license in another state, the
1623     District of Columbia, or a territory of the United States;
1624          (b) the imposition of a disciplinary sanction imposed on that person by another state,
1625     the District of Columbia, or a territory of the United States; or
1626          (c) a judgment or injunction entered against that person on the basis of conduct
1627     involving:
1628          (i) fraud;
1629          (ii) deceit;
1630          (iii) misrepresentation; or
1631          (iv) a violation of an insurance law or rule.
1632          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
1633     license in lieu of administrative action may specify a time, not to exceed five years, within
1634     which the former licensee may not apply for a new license.
1635          (b) If no time is specified in an order or agreement described in Subsection (8)(a), the
1636     former licensee may not apply for a new license for five years from the day on which the order
1637     or agreement is made without the express approval by the commissioner.

1638          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
1639     a license issued under this part if so ordered by a court.
1640          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
1641     procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1642          Section 11. Section 31A-23a-406 is amended to read:
1643          31A-23a-406. Title insurance producer's business.
1644          (1) As used in this section:
1645          (a) "Automated clearing house network" or "ACH network" means a national
1646     electronic funds transfer system regulated by the Federal Reserve and the Office of the
1647     Comptroller of the Currency.
1648          (b) "Depository institution" means the same as that term is defined in Section 7-1-103.
1649          (c) "Funds transfer system" means the same as that term is defined in Section 7-1-103.
1650          [(1)] (2) An individual title insurance producer or agency title insurance producer may
1651     do escrow involving real property transactions if all of the following exist:
1652          (a) the individual title insurance producer or agency title insurance producer is licensed
1653     with:
1654          (i) the title line of authority; and
1655          (ii) the escrow subline of authority;
1656          (b) the individual title insurance producer or agency title insurance producer is
1657     appointed by a title insurer authorized to do business in the state;
1658          (c) except as provided in Subsection [(3)] (4), the individual title insurance producer or
1659     agency title insurance producer issues one or more of the following as part of the transaction:
1660          (i) an owner's policy offering title insurance;
1661          (ii) a lender's policy offering title insurance; or
1662          (iii) if the transaction does not involve a transfer of ownership, an endorsement to an
1663     owner's or a lender's policy offering title insurance;
1664          (d) money deposited with the individual title insurance producer or agency title
1665     insurance producer in connection with any escrow is deposited:
1666          (i) in a federally insured depository institution, as defined in Section 7-1-103, that:
1667          (A) has [an office] a branch in this state, if the individual title insurance producer or
1668     agency title insurance producer depositing the money is a resident licensee; and

1669          (B) is authorized by the depository institution's primary regulator to engage in trust
1670     business, as defined in Section 7-5-1, in this state; and
1671          (ii) in a trust account that is separate from all other trust account money that is not
1672     related to real estate transactions;
1673          (e) money deposited with the individual title insurance producer or agency title
1674     insurance producer in connection with any escrow is the property of the one or more persons
1675     entitled to the money under the provisions of the escrow; [and]
1676          (f) money deposited with the individual title insurance producer or agency title
1677     insurance producer in connection with an escrow is segregated escrow by escrow in the records
1678     of the individual title insurance producer or agency title insurance producer;
1679          (g) earnings on money held in escrow may be paid out of the escrow account to any
1680     person in accordance with the conditions of the escrow;
1681          (h) the escrow does not require the individual title insurance producer or agency title
1682     insurance producer to hold:
1683          (i) construction money; or
1684          (ii) money held for exchange under Section 1031, Internal Revenue Code; and
1685          (i) the individual title insurance producer or agency title insurance producer shall
1686     maintain a physical office in Utah staffed by a person with an escrow subline of authority who
1687     processes the escrow.
1688          [(2)] (3) Notwithstanding Subsection [(1)] (2), an individual title insurance producer or
1689     agency title insurance producer may engage in the escrow business if:
1690          (a) the escrow involves:
1691          (i) a mobile home;
1692          (ii) a grazing right;
1693          (iii) a water right; or
1694          (iv) other personal property authorized by the commissioner; and
1695          (b) the individual title insurance producer or agency title insurance producer complies
1696     with this section except for Subsection [(1)(c)] (2)(c).
1697          [(3)] (4) (a) Subsection [(1)(c)] (2)(c) does not apply if the transaction is for the
1698     transfer of real property from the School and Institutional Trust Lands Administration.
1699          (b) This subsection does not prohibit an individual title insurance producer or agency

1700     title insurance producer from issuing a policy described in Subsection [(1)(c)] (2)(c) as part of a
1701     transaction described in Subsection [(3)(a)] (4)(a).
1702          [(4)] (5) Money held in escrow:
1703          (a) is not subject to any debts of the individual title insurance producer or agency title
1704     insurance producer;
1705          (b) may only be used to fulfill the terms of the individual escrow under which the
1706     money is accepted; and
1707          (c) may not be used until the conditions of the escrow are met.
1708          [(5)] (6) Assets or property other than escrow money received by an individual title
1709     insurance producer or agency title insurance producer in accordance with an escrow shall be
1710     maintained in a manner that will:
1711          (a) reasonably preserve and protect the asset or property from loss, theft, or damages;
1712     and
1713          (b) otherwise comply with the general duties and responsibilities of a fiduciary or
1714     bailee.
1715          [(6)] (7) (a) A check from the trust account described in Subsection [(1)(d)] (2)(d) may
1716     not be drawn, executed, or dated, or money otherwise disbursed unless the segregated escrow
1717     account from which money is to be disbursed contains a sufficient credit balance consisting of
1718     collected and cleared money at the time the check is drawn, executed, or dated, or money is
1719     otherwise disbursed.
1720          (b) As used in this Subsection [(6)] (7), money is considered to be "collected and
1721     cleared," and may be disbursed as follows:
1722          (i) cash may be disbursed on the same day the cash is deposited;
1723          (ii) a wire transfer may be disbursed on the same day the wire transfer is deposited;
1724     [and]
1725          (iii) the proceeds of one or more of the following financial instruments may be
1726     disbursed on the same day the financial instruments are deposited if received from a single
1727     party to the real estate transaction and if the aggregate of the financial instruments for the real
1728     estate transaction is less than $10,000:
1729          (A) a cashier's check, certified check, or official check that is drawn on an existing
1730     account at a federally insured financial institution;

1731          (B) a check drawn on the trust account of a principal broker or associate broker
1732     licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act, if the individual
1733     title insurance producer or agency title insurance producer has reasonable and prudent grounds
1734     to believe sufficient money will be available from the trust account on which the check is
1735     drawn at the time of disbursement of proceeds from the individual title insurance producer or
1736     agency title insurance producer's escrow account;
1737          (C) a personal check not to exceed $500 per closing; or
1738          (D) a check drawn on the escrow account of another individual title insurance producer
1739     or agency title insurance producer, if the individual title insurance producer or agency title
1740     insurance producer in the escrow transaction has reasonable and prudent grounds to believe
1741     that sufficient money will be available for withdrawal from the account upon which the check
1742     is drawn at the time of disbursement of money from the escrow account of the individual title
1743     insurance producer or agency title insurance producer in the escrow transaction[.];
1744          (iv) deposits made through the ACH network may be disbursed on the same day the
1745     deposit is made if:
1746          (A) the transferred funds remain uniquely designated and traceable throughout the
1747     entire ACH network transfer process;
1748          (B) except as a function of the ACH network process, the transferred funds are not
1749     subject to comingling or third party access during the transfer process;
1750          (C) the transferred funds are deposited into the title insurance producer's escrow
1751     account and are available for disbursement; and
1752          (D) either the ACH network payment type or the title insurance producer's systems
1753     prevent the transaction from being unilaterally canceled or reversed by the consumer once the
1754     transferred funds are deposited to the individual title insurance producer or agency title
1755     producer;
1756          (v) deposits may be disbursed on the same day the deposit is made if the deposit is
1757     made via:
1758          (A) the Federal Reserve Bank through the Federal Reserve's funds transfer system; or
1759          (B) a funds transfer system provided by an association of banks.
1760          (c) A check or deposit not described in Subsection [(6)(b)] (7)(b) may be disbursed:
1761          (i) within the time limits provided under the Expedited Funds Availability Act, 12

1762     U.S.C. Sec. 4001 et seq., as amended, and related regulations of the Federal Reserve System; or
1763          (ii) upon notification from the financial institution to which the money has been
1764     deposited that final settlement has occurred on the deposited financial instrument.
1765          [(7)] (8) An individual title insurance producer or agency title insurance producer shall
1766     maintain a record of a receipt or disbursement of escrow money.
1767          [(8)] (9) An individual title insurance producer or agency title insurance producer shall
1768     comply with:
1769          (a) Section 31A-23a-409;
1770          (b) Title 46, Chapter 1, Notaries Public Reform Act; and
1771          (c) any rules adopted by the Title and Escrow Commission, subject to Section
1772     31A-2-404, that govern escrows.
1773          [(9)] (10) If an individual title insurance producer or agency title insurance producer
1774     conducts a search for real estate located in the state, the individual title insurance producer or
1775     agency title insurance producer shall conduct a reasonable search of the public records.
1776          Section 12. Section 31A-23a-409 is amended to read:
1777          31A-23a-409. Trust obligation for money collected.
1778          (1) (a) Subject to Subsection (7), a licensee is a trustee for money that is paid to,
1779     received by, or collected by a licensee for forwarding to insurers or to insureds.
1780          (b) (i) Except as provided in Subsection (1)(b)(ii), a licensee may not commingle trust
1781     funds with:
1782          (A) the licensee's own money; or
1783          (B) money held in any other capacity.
1784          (ii) This Subsection (1)(b) does not apply to:
1785          (A) amounts necessary to pay bank charges; and
1786          (B) money paid by insureds and belonging in part to the licensee as a fee or
1787     commission.
1788          (c) Except as provided under Subsection (4), a licensee owes to insureds and insurers
1789     the fiduciary duties of a trustee with respect to money to be forwarded to insurers or insureds
1790     through the licensee.
1791          (d) (i) Unless money is sent to the appropriate payee by the close of the next business
1792     day after their receipt, the licensee shall deposit them in an account authorized under

1793     Subsection (2).
1794          (ii) Money deposited under this Subsection (1)(d) shall remain in an account
1795     authorized under Subsection (2) until sent to the appropriate payee.
1796          (2) Money required to be deposited under Subsection (1) shall be deposited:
1797          (a) in a federally insured trust account in a depository institution, as defined in Section
1798     7-1-103, which:
1799          (i) has [an office] a branch in this state, if the [licensee] individual title insurance
1800     producer or agency title insurance producer depositing the money is a resident licensee;
1801          (ii) has federal deposit insurance; and
1802          (iii) is authorized by its primary regulator to engage in the trust business, as defined by
1803     Section 7-5-1, in this state; or
1804          (b) in some other account, that:
1805          (i) the commissioner approves by rule or order; and
1806          (ii) provides safety comparable to an account described in Subsection (2)(a).
1807          (3) It is not a violation of Subsection (2)(a) if the amounts in the accounts exceed the
1808     amount of the federal insurance on the accounts.
1809          (4) A trust account into which money is deposited may be interest bearing. The
1810     interest accrued on the account may be paid to the licensee, so long as the licensee otherwise
1811     complies with this section and with the contract with the insurer.
1812          (5) A depository institution or other organization holding trust funds under this section
1813     may not offset or impound trust account funds against debts and obligations incurred by the
1814     licensee.
1815          (6) A licensee who, not being lawfully entitled to do so, diverts or appropriates any
1816     portion of the money held under Subsection (1) to the licensee's own use, is guilty of theft
1817     under Title 76, Chapter 6, Part 4, Theft. Section 76-6-412 applies in determining the
1818     classification of the offense. Sanctions under Section 31A-2-308 also apply.
1819          (7) A nonresident licensee:
1820          (a) shall comply with Subsection (1)(a) by complying with the trust account
1821     requirements of the nonresident licensee's home state; and
1822          (b) is not required to comply with the other provisions of this section.
1823          Section 13. Section 31A-23a-415 is amended to read:

1824          31A-23a-415. Assessment on agency title insurance producers or title insurers --
1825     Account created.
1826          (1) For purposes of this section:
1827          (a) "Premium" is as described in Subsection 59-9-101(3).
1828          (b) "Title insurer" means a person:
1829          (i) making any contract or policy of title insurance as:
1830          (A) insurer;
1831          (B) guarantor; or
1832          (C) surety;
1833          (ii) proposing to make any contract or policy of title insurance as:
1834          (A) insurer;
1835          (B) guarantor; or
1836          (C) surety; or
1837          (iii) transacting or proposing to transact any phase of title insurance, including:
1838          (A) soliciting;
1839          (B) negotiating preliminary to execution;
1840          (C) executing of a contract of title insurance;
1841          (D) insuring; and
1842          (E) transacting matters subsequent to the execution of the contract and arising out of
1843     the contract.
1844          (c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
1845     personal property located in Utah, an owner of real or personal property, the holders of liens or
1846     encumbrances on that property, or others interested in the property against loss or damage
1847     suffered by reason of:
1848          (i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
1849     property; or
1850          (ii) invalidity or unenforceability of any liens or encumbrances on the property.
1851          (2) (a) The commissioner may assess each title insurer, each individual title insurance
1852     producer who is not an employee of a title insurer or who is not designated by an agency title
1853     insurance producer, and each agency title insurance producer an annual assessment:
1854          (i) determined by the Title and Escrow Commission:

1855          (A) after consultation with the commissioner; and
1856          (B) in accordance with this Subsection (2); and
1857          (ii) to be used for the purposes described in Subsection (3).
1858          (b) An agency title insurance producer and individual title insurance producer who is
1859     not an employee of a title insurer or who is not designated by an agency title insurance
1860     producer shall be assessed up to:
1861          (i) $250 for the first office in each county in which the agency title insurance producer
1862     or individual title insurance producer maintains an office; and
1863          (ii) $150 for each additional office the agency title insurance producer or individual
1864     title insurance producer maintains in the county described in Subsection (2)(b)(i).
1865          (c) A title insurer shall be assessed up to:
1866          (i) $250 for the first office in each county in which the title insurer maintains an office;
1867          (ii) $150 for each additional office the title insurer maintains in the county described in
1868     Subsection (2)(c)(i); and
1869          (iii) an amount calculated by:
1870          (A) aggregating the assessments imposed on:
1871          (I) agency title insurance producers and individual title insurance producers under
1872     Subsection (2)(b); and
1873          (II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
1874          (B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
1875     costs and expenses determined under Subsection (2)(d); and
1876          (C) multiplying:
1877          (I) the amount calculated under Subsection (2)(c)(iii)(B); and
1878          (II) the percentage of total premiums for title insurance on Utah risk that are premiums
1879     of the title insurer.
1880          (d) Notwithstanding Section 31A-3-103 and subject to Section 31A-2-404, during the
1881     first quarter of each fiscal year the Title and Escrow Commission [by rule shall establish] shall
1882     approve the amount of costs and expenses described under Subsection (3) for the prior fiscal
1883     year that will be covered by the assessment[, except the costs or expenses to be covered by the
1884     assessment may not exceed the cost of one full-time equivalent position].
1885          (e) (i) An individual licensed to practice law in Utah is exempt from the requirements

1886     of this Subsection (2) if that person issues 12 or less policies during a 12-month period.
1887          (ii) In determining the number of policies issued by an individual licensed to practice
1888     law in Utah for purposes of Subsection (2)(e)(i), if the individual issues a policy to more than
1889     one party to the same closing, the individual is considered to have issued only one policy.
1890          (3) (a) Money received by the state under this section shall be deposited into the Title
1891     Licensee Enforcement Restricted Account.
1892          (b) There is created in the General Fund a restricted account known as the "Title
1893     Licensee Enforcement Restricted Account."
1894          (c) The Title Licensee Enforcement Restricted Account shall consist of the money
1895     received by the state under this section.
1896          (d) The commissioner shall administer the Title Licensee Enforcement Restricted
1897     Account. Subject to appropriations by the Legislature, the commissioner shall use the money
1898     deposited into the Title Licensee Enforcement Restricted Account only to pay for a cost or
1899     expense incurred by the department in the administration, investigation, and enforcement of
1900     laws governing individual title insurance producers, agency title insurance producers, or title
1901     insurers.
1902          (e) An appropriation from the Title Licensee Enforcement Restricted Account is
1903     nonlapsing.
1904          (4) The assessment imposed by this section shall be in addition to any premium
1905     assessment imposed under Subsection 59-9-101(3).
1906          Section 14. Section 31A-23b-401 is amended to read:
1907          31A-23b-401. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
1908     terminating a license -- Rulemaking for renewal or reinstatement.
1909          (1) A license as a navigator under this chapter remains in force until:
1910          (a) revoked or suspended under Subsection (4);
1911          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
1912     administrative action;
1913          (c) the licensee dies or is adjudicated incompetent as defined under:
1914          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
1915          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
1916     Minors;

1917          (d) lapsed under this section; or
1918          (e) voluntarily surrendered.
1919          (2) The following may be reinstated within one year after the day on which the license
1920     is no longer in force:
1921          (a) a lapsed license; or
1922          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
1923     not be reinstated after the license period in which the license is voluntarily surrendered.
1924          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
1925     license, submission and acceptance of a voluntary surrender of a license does not prevent the
1926     department from pursuing additional disciplinary or other action authorized under:
1927          (a) this title; or
1928          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
1929     Administrative Rulemaking Act.
1930          (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
1931     adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
1932     commissioner may:
1933          (i) revoke a license;
1934          (ii) suspend a license for a specified period of 12 months or less;
1935          (iii) limit a license in whole or in part;
1936          (iv) deny a license application;
1937          (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
1938          (vi) take a combination of actions under Subsections (4)(a)(i) through (iv) and
1939     Subsection (4)(a)(v).
1940          (b) The commissioner may take an action described in Subsection (4)(a) if the
1941     commissioner finds that the licensee or license applicant:
1942          (i) is unqualified for a license under Section 31A-23b-204, 31A-23b-205, or
1943     31A-23b-206;
1944          (ii) violated:
1945          (A) an insurance statute;
1946          (B) a rule that is valid under Subsection 31A-2-201(3); or
1947          (C) an order that is valid under Subsection 31A-2-201(4);

1948          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
1949     delinquency proceedings in any state;
1950          (iv) failed to pay a final judgment rendered against the person in this state within 60
1951     days after the day on which the judgment became final;
1952          (v) refused:
1953          (A) to be examined; or
1954          (B) to produce its accounts, records, and files for examination;
1955          (vi) had an officer who refused to:
1956          (A) give information with respect to the navigator's affairs; or
1957          (B) perform any other legal obligation as to an examination;
1958          (vii) provided information in the license application that is:
1959          (A) incorrect;
1960          (B) misleading;
1961          (C) incomplete; or
1962          (D) materially untrue;
1963          (viii) violated an insurance law, valid rule, or valid order of another regulatory agency
1964     in any jurisdiction;
1965          (ix) obtained or attempted to obtain a license through misrepresentation or fraud;
1966          (x) improperly withheld, misappropriated, or converted money or properties received
1967     in the course of doing insurance business;
1968          (xi) intentionally misrepresented the terms of an actual or proposed:
1969          (A) insurance contract;
1970          (B) application for insurance; or
1971          (C) application for public program;
1972          (xii) has been convicted of, or has entered a plea in abeyance as defined in Section
1973     77-2a-1 to:
1974          (A) a felony; or
1975          (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
1976          (xiii) admitted or is found to have committed an insurance unfair trade practice or
1977     fraud;
1978          (xiv) in the conduct of business in this state or elsewhere:

1979          (A) used fraudulent, coercive, or dishonest practices; or
1980          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
1981          (xv) has had an insurance license, navigator license, or other professional or
1982     occupational license or registration, or an equivalent of the same denied, suspended, revoked,
1983     or surrendered to resolve an administrative action;
1984          (xvi) forged another's name to:
1985          (A) an application for insurance;
1986          (B) a document related to an insurance transaction;
1987          (C) a document related to an application for a public program; or
1988          (D) a document related to an application for premium subsidies;
1989          (xvii) improperly used notes or another reference material to complete an examination
1990     for a license;
1991          (xviii) knowingly accepted insurance business from an individual who is not licensed;
1992          (xix) failed to comply with an administrative or court order imposing a child support
1993     obligation;
1994          (xx) failed to:
1995          (A) pay state income tax; or
1996          (B) comply with an administrative or court order directing payment of state income
1997     tax;
1998          (xxi) has been convicted of violating the federal Violent Crime Control and Law
1999     Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
2000     in the business of insurance or participate in such business as required by 18 U.S.C. Sec. 1033;
2001          (xxii) engaged in a method or practice in the conduct of business that endangered the
2002     legitimate interests of customers and the public; or
2003          (xxiii) has been convicted of any criminal felony involving dishonesty or breach of
2004     trust and has not obtained written consent to engage in the business of insurance or participate
2005     in such business as required by 18 U.S.C. Sec. 1033.
2006          (c) For purposes of this section, if a license is held by an agency, both the agency itself
2007     and any individual designated under the license are considered to be the holders of the license.
2008          (d) If an individual designated under the agency license commits an act or fails to
2009     perform a duty that is a ground for suspending, revoking, or limiting the individual's license,

2010     the commissioner may suspend, revoke, or limit the license of:
2011          (i) the individual;
2012          (ii) the agency, if the agency:
2013          (A) is reckless or negligent in its supervision of the individual; or
2014          (B) knowingly participates in the act or failure to act that is the ground for suspending,
2015     revoking, or limiting the license; or
2016          (iii) (A) the individual; and
2017          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
2018          (5) A licensee under this chapter is subject to the penalties for acting as a licensee
2019     without a license if:
2020          (a) the licensee's license is:
2021          (i) revoked;
2022          (ii) suspended;
2023          (iii) surrendered in lieu of administrative action;
2024          (iv) lapsed; or
2025          (v) voluntarily surrendered; and
2026          (b) the licensee:
2027          (i) continues to act as a licensee; or
2028          (ii) violates the terms of the license limitation.
2029          (6) A licensee under this chapter shall immediately report to the commissioner:
2030          (a) a revocation, suspension, or limitation of the person's license in another state, the
2031     District of Columbia, or a territory of the United States;
2032          (b) the imposition of a disciplinary sanction imposed on that person by another state,
2033     the District of Columbia, or a territory of the United States; or
2034          (c) a judgment or injunction entered against that person on the basis of conduct
2035     involving:
2036          (i) fraud;
2037          (ii) deceit;
2038          (iii) misrepresentation; or
2039          (iv) a violation of an insurance law or rule.
2040          (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a

2041     license in lieu of administrative action may specify a time, not to exceed five years, within
2042     which the former licensee may not apply for a new license.
2043          (b) If no time is specified in an order or agreement described in Subsection (7)(a), the
2044     former licensee may not apply for a new license for five years from the day on which the order
2045     or agreement is made without the express approval of the commissioner.
2046          (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2047     a license issued under this chapter if so ordered by a court.
2048          (9) The commissioner shall by rule prescribe the license renewal and reinstatement
2049     procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2050          Section 15. Section 31A-25-208 is amended to read:
2051          31A-25-208. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
2052     terminating a license -- Rulemaking for renewal and reinstatement.
2053          (1) A license type issued under this chapter remains in force until:
2054          (a) revoked or suspended under Subsection (4);
2055          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2056     administrative action;
2057          (c) the licensee dies or is adjudicated incompetent as defined under:
2058          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2059          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2060     Minors;
2061          (d) lapsed under Section 31A-25-210; or
2062          (e) voluntarily surrendered.
2063          (2) The following may be reinstated within one year after the day on which the license
2064     is no longer in force:
2065          (a) a lapsed license; or
2066          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
2067     not be reinstated after the license period in which the license is voluntarily surrendered.
2068          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
2069     license, submission and acceptance of a voluntary surrender of a license does not prevent the
2070     department from pursuing additional disciplinary or other action authorized under:
2071          (a) this title; or

2072          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
2073     Administrative Rulemaking Act.
2074          (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
2075     adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
2076     commissioner may:
2077          (i) revoke a license;
2078          (ii) suspend a license for a specified period of 12 months or less;
2079          (iii) limit a license in whole or in part; or
2080          (iv) deny a license application.
2081          (b) The commissioner may take an action described in Subsection (4)(a) if the
2082     commissioner finds that the licensee or license applicant:
2083          (i) is unqualified for a license under Section 31A-25-202, 31A-25-203, or 31A-25-204;
2084          (ii) has violated:
2085          (A) an insurance statute;
2086          (B) a rule that is valid under Subsection 31A-2-201(3); or
2087          (C) an order that is valid under Subsection 31A-2-201(4);
2088          (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
2089     delinquency proceedings in any state;
2090          (iv) fails to pay a final judgment rendered against the person in this state within 60
2091     days after the day on which the judgment became final;
2092          (v) fails to meet the same good faith obligations in claims settlement that is required of
2093     admitted insurers;
2094          (vi) is affiliated with and under the same general management or interlocking
2095     directorate or ownership as another third party administrator that transacts business in this state
2096     without a license;
2097          (vii) refuses:
2098          (A) to be examined; or
2099          (B) to produce its accounts, records, and files for examination;
2100          (viii) has an officer who refuses to:
2101          (A) give information with respect to the third party administrator's affairs; or
2102          (B) perform any other legal obligation as to an examination;

2103          (ix) provides information in the license application that is:
2104          (A) incorrect;
2105          (B) misleading;
2106          (C) incomplete; or
2107          (D) materially untrue;
2108          (x) has violated an insurance law, valid rule, or valid order of another regulatory
2109     agency in any jurisdiction;
2110          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
2111          (xii) has improperly withheld, misappropriated, or converted money or properties
2112     received in the course of doing insurance business;
2113          (xiii) has intentionally misrepresented the terms of an actual or proposed:
2114          (A) insurance contract; or
2115          (B) application for insurance;
2116          (xiv) has been convicted of, or has entered a plea in abeyance as defined in Section
2117     77-2a-1 to:
2118          (A) a felony; or
2119          (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
2120          (xv) has admitted or been found to have committed an insurance unfair trade practice
2121     or fraud;
2122          (xvi) in the conduct of business in this state or elsewhere has:
2123          (A) used fraudulent, coercive, or dishonest practices; or
2124          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
2125          (xvii) has had an insurance license or other professional or occupational license or
2126     registration, or an equivalent of the same, denied, suspended, revoked, or surrendered to
2127     resolve an administrative action;
2128          (xviii) has forged another's name to:
2129          (A) an application for insurance; or
2130          (B) a document related to an insurance transaction;
2131          (xix) has improperly used notes or any other reference material to complete an
2132     examination for an insurance license;
2133          (xx) has knowingly accepted insurance business from an individual who is not

2134     licensed;
2135          (xxi) has failed to comply with an administrative or court order imposing a child
2136     support obligation;
2137          (xxii) has failed to:
2138          (A) pay state income tax; or
2139          (B) comply with an administrative or court order directing payment of state income
2140     tax;
2141          (xxiii) is convicted of violating the federal Violent Crime Control and Law
2142     Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
2143     in the business of insurance or participate in such business as required under 18 U.S.C. Sec.
2144     1033;
2145          (xxiv) has engaged in methods and practices in the conduct of business that endanger
2146     the legitimate interests of customers and the public; or
2147          (xxv) has been convicted of a criminal felony involving dishonesty or breach of trust
2148     and has not obtained written consent to engage in the business of insurance or participate in
2149     such business as required under 18 U.S.C. Sec. 1033.
2150          (c) For purposes of this section, if a license is held by an agency, both the agency itself
2151     and any individual designated under the license are considered to be the holders of the agency
2152     license.
2153          (d) If an individual designated under the agency license commits an act or fails to
2154     perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
2155     the commissioner may suspend, revoke, or limit the license of:
2156          (i) the individual;
2157          (ii) the agency if the agency:
2158          (A) is reckless or negligent in its supervision of the individual; or
2159          (B) knowingly participated in the act or failure to act that is the ground for suspending,
2160     revoking, or limiting the license; or
2161          (iii) (A) the individual; and
2162          (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
2163          (5) A licensee under this chapter is subject to the penalties for acting as a licensee
2164     without a license if:

2165          (a) the licensee's license is:
2166          (i) revoked;
2167          (ii) suspended;
2168          (iii) limited;
2169          (iv) surrendered in lieu of administrative action;
2170          (v) lapsed; or
2171          (vi) voluntarily surrendered; and
2172          (b) the licensee:
2173          (i) continues to act as a licensee; or
2174          (ii) violates the terms of the license limitation.
2175          (6) A licensee under this chapter shall immediately report to the commissioner:
2176          (a) a revocation, suspension, or limitation of the person's license in any other state, the
2177     District of Columbia, or a territory of the United States;
2178          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
2179     the District of Columbia, or a territory of the United States; or
2180          (c) a judgment or injunction entered against the person on the basis of conduct
2181     involving:
2182          (i) fraud;
2183          (ii) deceit;
2184          (iii) misrepresentation; or
2185          (iv) a violation of an insurance law or rule.
2186          (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
2187     license in lieu of administrative action may specify a time, not to exceed five years, within
2188     which the former licensee may not apply for a new license.
2189          (b) If no time is specified in the order or agreement described in Subsection (7)(a), the
2190     former licensee may not apply for a new license for five years from the day on which the order
2191     or agreement is made without the express approval of the commissioner.
2192          (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2193     a license issued under this part if so ordered by the court.
2194          (9) The commissioner shall by rule prescribe the license renewal and reinstatement
2195     procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.

2196          Section 16. Section 31A-26-213 is amended to read:
2197          31A-26-213. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
2198     terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
2199          (1) A license type issued under this chapter remains in force until:
2200          (a) revoked or suspended under Subsection (5);
2201          (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2202     administrative action;
2203          (c) the licensee dies or is adjudicated incompetent as defined under:
2204          (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2205          (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2206     Minors;
2207          (d) lapsed under Section 31A-26-214.5; or
2208          (e) voluntarily surrendered.
2209          (2) The following may be reinstated within one year after the day on which the license
2210     is no longer in force:
2211          (a) a lapsed license; or
2212          (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
2213     not be reinstated after the license period in which it is voluntarily surrendered.
2214          (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
2215     license, submission and acceptance of a voluntary surrender of a license does not prevent the
2216     department from pursuing additional disciplinary or other action authorized under:
2217          (a) this title; or
2218          (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
2219     Administrative Rulemaking Act.
2220          (4) A license classification issued under this chapter remains in force until:
2221          (a) the qualifications pertaining to a license classification are no longer met by the
2222     licensee; or
2223          (b) the supporting license type:
2224          (i) is revoked or suspended under Subsection (5); or
2225          (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
2226     administrative action.

2227          (5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
2228     adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
2229     commissioner may:
2230          (i) revoke:
2231          (A) a license; or
2232          (B) a license classification;
2233          (ii) suspend for a specified period of 12 months or less:
2234          (A) a license; or
2235          (B) a license classification;
2236          (iii) limit in whole or in part:
2237          (A) a license; or
2238          (B) a license classification;
2239          (iv) deny a license application;
2240          (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
2241          (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
2242     Subsection (5)(a)(v).
2243          (b) The commissioner may take an action described in Subsection (5)(a) if the
2244     commissioner finds that the licensee or license applicant:
2245          (i) is unqualified for a license or license classification under Section 31A-26-202,
2246     31A-26-203, 31A-26-204, or 31A-26-205;
2247          (ii) has violated:
2248          (A) an insurance statute;
2249          (B) a rule that is valid under Subsection 31A-2-201(3); or
2250          (C) an order that is valid under Subsection 31A-2-201(4);
2251          (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
2252     delinquency proceedings in any state;
2253          (iv) fails to pay a final judgment rendered against the person in this state within 60
2254     days after the judgment became final;
2255          (v) fails to meet the same good faith obligations in claims settlement that is required of
2256     admitted insurers;
2257          (vi) is affiliated with and under the same general management or interlocking

2258     directorate or ownership as another insurance adjuster that transacts business in this state
2259     without a license;
2260          (vii) refuses:
2261          (A) to be examined; or
2262          (B) to produce its accounts, records, and files for examination;
2263          (viii) has an officer who refuses to:
2264          (A) give information with respect to the insurance adjuster's affairs; or
2265          (B) perform any other legal obligation as to an examination;
2266          (ix) provides information in the license application that is:
2267          (A) incorrect;
2268          (B) misleading;
2269          (C) incomplete; or
2270          (D) materially untrue;
2271          (x) has violated an insurance law, valid rule, or valid order of another regulatory
2272     agency in any jurisdiction;
2273          (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
2274          (xii) has improperly withheld, misappropriated, or converted money or properties
2275     received in the course of doing insurance business;
2276          (xiii) has intentionally misrepresented the terms of an actual or proposed:
2277          (A) insurance contract; or
2278          (B) application for insurance;
2279          (xiv) has been convicted of, or has entered a plea in abeyance as defined in Section
2280     77-2a-1 to:
2281          (A) a felony; or
2282          (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
2283          (xv) has admitted or been found to have committed an insurance unfair trade practice
2284     or fraud;
2285          (xvi) in the conduct of business in this state or elsewhere has:
2286          (A) used fraudulent, coercive, or dishonest practices; or
2287          (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
2288          (xvii) has had an insurance license or other professional or occupational license or

2289     registration, or equivalent, denied, suspended, revoked, or surrendered to resolve an
2290     administrative action;
2291          (xviii) has forged another's name to:
2292          (A) an application for insurance; or
2293          (B) a document related to an insurance transaction;
2294          (xix) has improperly used notes or any other reference material to complete an
2295     examination for an insurance license;
2296          (xx) has knowingly accepted insurance business from an individual who is not
2297     licensed;
2298          (xxi) has failed to comply with an administrative or court order imposing a child
2299     support obligation;
2300          (xxii) has failed to:
2301          (A) pay state income tax; or
2302          (B) comply with an administrative or court order directing payment of state income
2303     tax;
2304          (xxiii) has been convicted of a violation of the federal Violent Crime Control and Law
2305     Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent in
2306     accordance with 18 U.S.C. Sec. 1033 to engage in the business of insurance or participate in
2307     such business;
2308          (xxiv) has engaged in methods and practices in the conduct of business that endanger
2309     the legitimate interests of customers and the public; or
2310          (xxv) has been convicted of any criminal felony involving dishonesty or breach of trust
2311     and has not obtained written consent in accordance with 18 U.S.C. Sec. 1033 to engage in the
2312     business of insurance or participate in such business.
2313          (c) For purposes of this section, if a license is held by an agency, both the agency itself
2314     and any individual designated under the license are considered to be the holders of the license.
2315          (d) If an individual designated under the agency license commits an act or fails to
2316     perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
2317     the commissioner may suspend, revoke, or limit the license of:
2318          (i) the individual;
2319          (ii) the agency, if the agency:

2320          (A) is reckless or negligent in its supervision of the individual; or
2321          (B) knowingly participated in the act or failure to act that is the ground for suspending,
2322     revoking, or limiting the license; or
2323          (iii) (A) the individual; and
2324          (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
2325          (6) A licensee under this chapter is subject to the penalties for conducting an insurance
2326     business without a license if:
2327          (a) the licensee's license is:
2328          (i) revoked;
2329          (ii) suspended;
2330          (iii) limited;
2331          (iv) surrendered in lieu of administrative action;
2332          (v) lapsed; or
2333          (vi) voluntarily surrendered; and
2334          (b) the licensee:
2335          (i) continues to act as a licensee; or
2336          (ii) violates the terms of the license limitation.
2337          (7) A licensee under this chapter shall immediately report to the commissioner:
2338          (a) a revocation, suspension, or limitation of the person's license in any other state, the
2339     District of Columbia, or a territory of the United States;
2340          (b) the imposition of a disciplinary sanction imposed on that person by any other state,
2341     the District of Columbia, or a territory of the United States; or
2342          (c) a judgment or injunction entered against that person on the basis of conduct
2343     involving:
2344          (i) fraud;
2345          (ii) deceit;
2346          (iii) misrepresentation; or
2347          (iv) a violation of an insurance law or rule.
2348          (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
2349     license in lieu of administrative action may specify a time not to exceed five years within
2350     which the former licensee may not apply for a new license.

2351          (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
2352     former licensee may not apply for a new license for five years without the express approval of
2353     the commissioner.
2354          (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2355     a license issued under this part if so ordered by a court.
2356          (10) The commissioner shall by rule prescribe the license renewal and reinstatement
2357     procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2358          Section 17. Section 31A-30-118 is amended to read:
2359          31A-30-118. Patient Protection and Affordable Care Act -- State insurance
2360     mandates -- Cost of additional benefits.
2361          (1) (a) The commissioner shall identify a new mandated benefit that is in excess of the
2362     essential health benefits required by PPACA.
2363          (b) The state shall quantify the cost attributable to each additional mandated benefit
2364     specified in Subsection (1)(a) based on a qualified health plan issuer's calculation of the cost
2365     associated with the mandated benefit, which shall be:
2366          (i) calculated in accordance with generally accepted actuarial principles and
2367     methodologies;
2368          (ii) conducted by a member of the American Academy of Actuaries; and
2369          (iii) reported to the commissioner and to the individual exchange operating in the state.
2370          (c) The commissioner may require a proponent of a new mandated benefit under
2371     Subsection (1)(a) to provide the commissioner with a cost analysis conducted in accordance
2372     with Subsection (1)(b). The commissioner may use the cost information provided under this
2373     Subsection (1)(c) to establish estimates of the cost to the state under Subsection (2).
2374          (2) If the state is required to defray the cost of additional required benefits under the
2375     provisions of 45 C.F.R. 155.170:
2376          (a) the state shall make the required payments:
2377          (i) in accordance with Subsection (3); and
2378          (ii) directly to the qualified health plan issuer in accordance with 45 C.F.R. 155.170;
2379          (b) an issuer of a qualified health plan that receives a payment under the provisions of
2380     Subsection (1) and 45 C.F.R. 155.170 shall:
2381          (i) reduce the premium charged to the individual on whose behalf the issuer will be

2382     paid under Subsection (1), in an amount equal to the amount of the payment under Subsection
2383     (1); or
2384          (ii) notwithstanding Subsection 31A-23a-402.5(5), provide a premium rebate to an
2385     individual on whose behalf the issuer received a payment under Subsection (1), in an amount
2386     equal to the amount of the payment under Subsection (1); and
2387          (c) a premium rebate made under this section is not a prohibited inducement under
2388     Section 31A-23a-402.5.
2389          (3) A payment required under 45 C.F.R. 155.170(c) shall:
2390          (a) unless otherwise required by PPACA, be based on a statewide average of the cost
2391     of the additional benefit for all issuers who are entitled to payment under the provisions of 45
2392     C.F.R. 155.170; and
2393          (b) be submitted to an issuer through a process established by the commissioner.
2394          (4) (a) As used in this Subsection (4), "account" means the State Mandated Insurer
2395     Payments Restricted Account created in Subsection (4)(b).
2396          (b) There is created in the General Fund a restricted account known as the "State
2397     Mandated Insurer Payments Restricted Account."
2398          (c) The account shall consist of:
2399          (i) money appropriated to the account by the Legislature; and
2400          (ii) interest earned on money in the account.
2401          (d) Subject to appropriations from the Legislature, the commissioner shall administer
2402     the account for the sole benefit of a qualified health plan issuer who is eligible to receive
2403     payments under this section.
2404          (e) An appropriation from the account is nonlapsing.
2405          (5) The commissioner may adopt rules in accordance with Title 63G, Chapter 3, Utah
2406     Administrative Rulemaking Act, to:
2407          (a) administer the provisions of this section and 45 C.F.R. 155.170; and
2408          (b) establish or implement a process for submitting a payment to an issuer under
2409     Subsection (3)(b).
2410          Section 18. Section 31A-31-110 is amended to read:
2411          31A-31-110. Mandatory reporting of fraudulent insurance acts.
2412          (1) (a) A person shall report a fraudulent insurance act to the department if:

2413          (i) the person has a good faith belief on the basis of a preponderance of the evidence
2414     that a fraudulent insurance act is being, will be, or has been committed by a person other than
2415     the person making the report; and
2416          (ii) the person is:
2417          (A) an insurer; or
2418          (B) in relation to the business of title insurance, an auditor that is employed by a title
2419     insurer.
2420          (b) The report required by this Subsection (1) shall:
2421          (i) be in writing;
2422          (ii) be submitted through:
2423          (A) the National Insurance Crime Bureau fraud reporting system;
2424          (B) the NAIC's online fraud reporting system; or
2425          (C) email using an email address established by the department for the purpose of
2426     submitting the report required by this Subsection (1);
2427          [(ii)] (iii) provide information in detail relating to:
2428          (A) the fraudulent insurance act; and
2429          (B) the perpetrator of the fraudulent insurance act; and
2430          [(iii)] (iv) (A) state whether the person required to report under Subsection (1)(a) also
2431     reported the fraudulent insurance act in writing to:
2432          (I) the attorney general;
2433          (II) a state law enforcement agency;
2434          (III) a criminal investigative department or agency of the United States;
2435          (IV) a district attorney; or
2436          (V) the prosecuting attorney of a municipality or county; and
2437          (B) if the person reported the fraudulent insurance act as provided in Subsection
2438     (1)(b)(iii)(A), state the agency to which the person reported the fraudulent insurance act.
2439          (c) A person required to submit a written report under this Subsection (1) shall submit
2440     the written report to the department by no later than 90 days from the day on which the person
2441     required to report the fraudulent insurance act has a good faith belief on the basis of a
2442     preponderance of the evidence that the fraudulent insurance act is being, will be, or has been
2443     committed.

2444          (2) An action brought under Section 31A-2-201, 31A-2-308, or 31A-31-109, for failure
2445     to comply with Subsection (1) shall be commenced within four years from the date on which a
2446     person described in Subsection (1):
2447          (a) has a good faith belief on the basis of a preponderance of the evidence that a
2448     fraudulent insurance act is being, will be, or has been committed; and
2449          (b) willfully fails to report the fraudulent insurance act.
2450          (3) The department may by rule made in accordance with Title 63G, Chapter 3, Utah
2451     Administrative Rulemaking Act, provide a process by which a person described in Subsection
2452     (1)(a)(ii)(B) may comply with the requirements of Subsection (1) by reporting a fraudulent
2453     insurance act to the insurer with whom the person is employed, except that the rule shall
2454     provide that if the person reports the fraudulent insurance act to the insurer, the insurer is
2455     required to report the fraudulent insurance act to the department.
2456          (4) A person described in Subsection (1)(a)(ii) who in good faith makes a report under
2457     this section, in accordance with Section 31A-31-105, is immune from civil action, civil
2458     penalty, or damages for making that report.
2459          Section 19. Section 31A-35-504 is amended to read:
2460          31A-35-504. Failure to pay bail bond forfeiture -- Grounds for suspension and
2461     revocation of bail bond agency license.
2462          (1) As used in this section:
2463          (a) "Agency" means a bail bond agency.
2464          (b) "Judgment" means a judgment of bail bond forfeiture issued under Section
2465     77-20-505.
2466          (2) (a) (i) An agency shall pay a judgment not later than 15 days following service of
2467     notice upon the agency from a prosecutor of the entry of the judgment.
2468          (ii) An agency may pay a bail bond forfeiture to the court prior to judgment.
2469          (b) (i) A prosecutor who does not receive proof of or notice of payment of the
2470     judgment within 15 days after the service of notice to the agency of a judgment shall notify the
2471     commissioner of the failure to pay the judgment.
2472          (ii) The commissioner shall notify the agency, by the most expeditious means
2473     available, of the nonpayment of the judgment.
2474          (iii) The agency shall satisfy the judgment within five business days after receiving

2475     notice under Subsection (2)(b)(ii). [If the judgment is not satisfied at the end of the five days,
2476     the commissioner may suspend the agency's license under Subsection (3).]
2477          (c) If notice of entry of judgment is served upon the agency by mail, three additional
2478     days are added to the 15 days provided in Subsections (2)(a), (2)(b), and (2)(d).
2479          (d) A prosecutor may not proceed under Subsection (2)(b) if an agency, within 15 days
2480     after service of notice of the entry of judgment is served:
2481          (i) files a motion to set aside the judgment or files an application for an extraordinary
2482     writ; and
2483          (ii) provides proof that the agency has posted the judgment amount with the court in
2484     the form of cash, a cashier's check, or certified funds.
2485          (e) As used in this section, the filing of the following tolls the time within which an
2486     agency is required to pay a judgment if the motion or application is filed within 15 days after
2487     the day on which service of notice of the entry of a judgment is served:
2488          (i) a motion to set aside a judgment; or
2489          (ii) an application for extraordinary writ.
2490          (3) The commissioner shall suspend the license of the agency not later than five days
2491     following the agency's failure to satisfy the judgment as required under Subsection (2)(b).
2492          (4) If the prosecutor receives proof of or notice of payment of the judgment during the
2493     suspension period under Subsection (3), the prosecutor shall immediately notify the
2494     commissioner of the payment. The notice shall be in writing and by the most expeditious
2495     means possible, including facsimile or other electronic means.
2496          (5) The commissioner shall lift a suspension under Subsection (3) within five days of
2497     the day on which all of the following conditions are met:
2498          (a) the suspension has been in place for no fewer than 14 days;
2499          (b) the commissioner has received written notice of payment of the unpaid forfeiture
2500     from the prosecutor; and
2501          (c) the commissioner has received:
2502          (i) no other notice of any unpaid forfeiture from a prosecutor; or
2503          (ii) if a notice of unpaid forfeiture is received, written notice from the prosecutor that
2504     the unpaid forfeiture has been paid.
2505          (6) The commissioner shall commence an administrative proceeding and revoke the

2506     license of an agency that fails to meet the conditions under Subsection (5) within 60 days
2507     following the initial date of suspension.
2508          (7) This section does not restrict or otherwise affect the rights of a prosecutor to
2509     commence collection proceedings under Subsection 77-20-505(5).
2510          Section 20. Section 31A-37-102 is amended to read:
2511          31A-37-102. Definitions.
2512          As used in this chapter:
2513          (1) (a) "Affiliated company" means a business entity that because of common
2514     ownership, control, operation, or management is in the same corporate or limited liability
2515     company system as:
2516          (i) a parent;
2517          (ii) an industrial insured; or
2518          (iii) a member organization.
2519          (b) "Affiliated company" does not include a business entity for which the
2520     commissioner issues an order finding that the business entity is not an affiliated company.
2521          (2) "Alien captive insurance company" means an insurer:
2522          (a) formed to write insurance business for a parent or affiliate of the insurer; and
2523          (b) licensed pursuant to the laws of an alien or foreign jurisdiction that imposes
2524     statutory or regulatory standards:
2525          (i) on a business entity transacting the business of insurance in the alien or foreign
2526     jurisdiction; and
2527          (ii) in a form acceptable to the commissioner.
2528          (3) "Applicant captive insurance company" means an entity that has submitted an
2529     application for a certificate of authority for a captive insurance company, unless the application
2530     has been denied or withdrawn.
2531          (4) "Association" means a legal association of two or more persons that [has been in
2532     continuous existence for at least one year if] meets the following requirements:
2533          (a) the persons are exposed to similar or related liability because of related, similar, or
2534     common business trade, products, services, premises, or operations; and
2535          (b) [(a)] (i) the association or [its] the association's member organizations:
2536          [(i)] (A) own, control, or hold with power to vote all of the outstanding voting

2537     securities of an association captive insurance company incorporated as a stock insurer; [or]
2538          [(ii)] (B) have complete voting control over an association captive insurance company
2539     incorporated as a mutual insurer; or
2540          (C) have complete voting control over an association captive insurance company
2541     formed as a limited liability company; or
2542          [(b)] (ii) the association's member organizations collectively constitute all of the
2543     subscribers of an association captive insurance company formed as a reciprocal insurer[; or].
2544          [(c) the association or the association's member organizations have complete voting
2545     control over an association captive insurance company formed as a limited liability company.]
2546          (5) "Association captive insurance company" means a business entity that insures risks
2547     of:
2548          (a) a member organization of the association;
2549          (b) an affiliate of a member organization of the association; and
2550          (c) the association.
2551          (6) "Branch business" means an insurance business transacted by a branch captive
2552     insurance company in this state.
2553          (7) "Branch captive insurance company" means an alien captive insurance company
2554     that has a certificate of authority from the commissioner to transact the business of insurance in
2555     this state through a captive insurance company that is domiciled outside of this state.
2556          (8) "Branch operation" means a business operation of a branch captive insurance
2557     company in this state.
2558          (9) (a) "Captive insurance company" means the same as that term is defined in Section
2559     31A-1-301.
2560          (b) "Captive insurance company" includes any of the following formed or holding a
2561     certificate of authority under this chapter:
2562          (i) a branch captive insurance company;
2563          (ii) a pure captive insurance company;
2564          (iii) an association captive insurance company;
2565          (iv) a sponsored captive insurance company;
2566          (v) an industrial insured captive insurance company, including an industrial insured
2567     captive insurance company formed as a risk retention group captive in this state pursuant to the

2568     provisions of the Federal Liability Risk Retention Act of 1986;
2569          (vi) a special purpose captive insurance company; or
2570          (vii) a special purpose financial captive insurance company.
2571          (10) "Commissioner" means Utah's Insurance Commissioner or the commissioner's
2572     designee.
2573          (11) "Common ownership and control" means that two or more captive insurance
2574     companies are owned or controlled by the same person or group of persons as follows:
2575          (a) in the case of a captive insurance company that is a stock corporation, the direct or
2576     indirect ownership of 80% or more of the outstanding voting stock of the stock corporation;
2577          (b) in the case of a captive insurance company that is a mutual corporation, the direct
2578     or indirect ownership of 80% or more of the surplus and the voting power of the mutual
2579     corporation;
2580          (c) in the case of a captive insurance company that is a limited liability company, the
2581     direct or indirect ownership by the same member or members of 80% or more of the
2582     membership interests in the limited liability company; or
2583          (d) in the case of a sponsored captive insurance company, a protected cell is a separate
2584     captive insurance company owned and controlled by the protected cell's participant, only if:
2585          (i) the participant is the only participant with respect to the protected cell; and
2586          (ii) the participant is the sponsor or is affiliated with the sponsor of the sponsored
2587     captive insurance company through common ownership and control.
2588          (12) "Consolidated debt to total capital ratio" means the ratio of Subsection (12)(a) to
2589     (b).
2590          (a) This Subsection (12)(a) is an amount equal to the sum of all debts and hybrid
2591     capital instruments including:
2592          (i) all borrowings from depository institutions;
2593          (ii) all senior debt;
2594          (iii) all subordinated debts;
2595          (iv) all trust preferred shares; and
2596          (v) all other hybrid capital instruments that are not included in the determination of
2597     consolidated GAAP net worth issued and outstanding.
2598          (b) This Subsection (12)(b) is an amount equal to the sum of:

2599          (i) total capital consisting of all debts and hybrid capital instruments as described in
2600     Subsection (12)(a); and
2601          (ii) shareholders' equity determined in accordance with generally accepted accounting
2602     principles for reporting to the United States Securities and Exchange Commission.
2603          (13) "Consolidated GAAP net worth" means the consolidated shareholders' or
2604     members' equity determined in accordance with generally accepted accounting principles for
2605     reporting to the United States Securities and Exchange Commission.
2606          (14) "Controlled unaffiliated business" means a business entity:
2607          (a) (i) in the case of a pure captive insurance company, that is not in the corporate or
2608     limited liability company system of a parent or the parent's affiliate; or
2609          (ii) in the case of an industrial insured captive insurance company, that is not in the
2610     corporate or limited liability company system of an industrial insured or an affiliated company
2611     of the industrial insured;
2612          (b) (i) in the case of a pure captive insurance company, that has a contractual
2613     relationship with a parent or affiliate; or
2614          (ii) in the case of an industrial insured captive insurance company, that has a
2615     contractual relationship with an industrial insured or an affiliated company of the industrial
2616     insured; and
2617          (c) whose risks that are or will be insured by a pure captive insurance company, an
2618     industrial insured captive insurance company, or both, are managed in accordance with
2619     Subsection 31A-37-106(1)(j) by:
2620          (i) (A) a pure captive insurance company; or
2621          (B) an industrial insured captive insurance company; or
2622          (ii) a parent or affiliate of:
2623          (A) a pure captive insurance company; or
2624          (B) an industrial insured captive insurance company.
2625          (15) "Criminal act" means an act for which a person receives a verdict or finding of
2626     guilt after a criminal trial or a plea of guilty or nolo contendere to a criminal charge.
2627          (16) "Establisher" means a person who establishes a business entity or a trust.
2628          (17) "Governing body" means the persons who hold the ultimate authority to direct and
2629     manage the affairs of an entity.

2630          (18) "Industrial insured" means an insured:
2631          (a) that produces insurance:
2632          (i) by the services of a full-time employee acting as a risk manager or insurance
2633     manager; or
2634          (ii) using the services of a regularly and continuously qualified insurance consultant;
2635          (b) whose aggregate annual premiums for insurance on all risks total at least $25,000;
2636     and
2637          (c) that has at least 25 full-time employees.
2638          (19) "Industrial insured captive insurance company" means a business entity that:
2639          (a) insures risks of the industrial insureds that comprise the industrial insured group;
2640     and
2641          (b) may insure the risks of:
2642          (i) an affiliated company of an industrial insured; or
2643          (ii) a controlled unaffiliated business of:
2644          (A) an industrial insured; or
2645          (B) an affiliated company of an industrial insured.
2646          (20) "Industrial insured group" means:
2647          (a) a group of industrial insureds that collectively:
2648          (i) own, control, or hold with power to vote all of the outstanding voting securities of
2649     an industrial insured captive insurance company incorporated or organized as a limited liability
2650     company as a stock insurer; or
2651          (ii) have complete voting control over an industrial insured captive insurance company
2652     incorporated or organized as a limited liability company as a mutual insurer;
2653          (b) a group that is:
2654          (i) created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. Sec. 3901
2655     et seq., as amended, as a corporation or other limited liability association; and
2656          (ii) taxable under this title as a:
2657          (A) stock corporation; or
2658          (B) mutual insurer; or
2659          (c) a group that has complete voting control over an industrial captive insurance
2660     company formed as a limited liability company.

2661          (21) "Member organization" means a person that belongs to an association.
2662          (22) "Parent" means a person that directly or indirectly owns, controls, or holds with
2663     power to vote more than 50% of the outstanding securities of an organization.
2664          (23) "Participant" means an entity that is insured by a sponsored captive insurance
2665     company:
2666          (a) if the losses of the participant are limited through a participant contract to the assets
2667     of a protected cell; and
2668          (b) (i) the entity is permitted to be a participant under Section 31A-37-403; or
2669          (ii) the entity is an affiliate of an entity permitted to be a participant under Section
2670     31A-37-403.
2671          (24) "Participant contract" means a contract by which a sponsored captive insurance
2672     company:
2673          (a) insures the risks of a participant; and
2674          (b) limits the losses of the participant to the assets of a protected cell.
2675          (25) "Protected cell" means a separate account established and maintained by a
2676     sponsored captive insurance company for one participant.
2677          (26) "Pure captive insurance company" means a business entity that insures risks of a
2678     parent or affiliate of the business entity.
2679          (27) "Special purpose financial captive insurance company" means the same as that
2680     term is defined in Section 31A-37a-102.
2681          (28) "Sponsor" means an entity that:
2682          (a) meets the requirements of Section 31A-37-402; and
2683          (b) is approved by the commissioner to:
2684          (i) provide all or part of the capital and surplus required by applicable law in an amount
2685     of not less than $350,000, which amount the commissioner may increase by order if the
2686     commissioner considers it necessary; and
2687          (ii) organize and operate a sponsored captive insurance company.
2688          (29) "Sponsored captive insurance company" means a captive insurance company:
2689          (a) in which the minimum capital and surplus required by applicable law is provided by
2690     one or more sponsors;
2691          (b) that is formed or holding a certificate of authority under this chapter;

2692          (c) that insures the risks of a separate participant through the contract; and
2693          (d) that segregates each participant's liability through one or more protected cells.
2694          (30) "Treasury rates" means the United States Treasury strip asked yield as published
2695     in the Wall Street Journal as of a balance sheet date.
2696          Section 21. Section 31A-37-202 is amended to read:
2697          31A-37-202. Permissive areas of insurance.
2698          (1) Except as provided in Subsections (2) and (3), a captive insurance company may
2699     not directly insure a risk other than the risk of the captive insurance company's parent or
2700     affiliated company.
2701          (2) In addition to the risks described in Subsection (1), an association captive insurance
2702     company may insure the risk of:
2703          (a) a member organization of the association captive insurance company's association;
2704     or
2705          (b) an affiliate of a member organization of the association captive insurance
2706     company's association.
2707          (3) The following may insure a risk of a controlled unaffiliated business:
2708          (a) an industrial insured captive insurance company;
2709          (b) a protected cell;
2710          (c) a pure captive insurance company; or
2711          (d) a sponsored captive insurance company.
2712          (4) To the extent allowed by a captive insurance company's organizational charter, a
2713     captive insurance company may provide any type of insurance described in this title, except:
2714          (a) workers' compensation insurance;
2715          (b) personal motor vehicle insurance;
2716          (c) homeowners' insurance; and
2717          (d) any component of the types of insurance described in Subsections (4)(a) through
2718     (c).
2719          (5) A captive insurance company may not provide coverage for:
2720          (a) a wager or gaming risk;
2721          (b) loss of an election; or
2722          (c) the penal consequences of a crime.

2723          (6) Unless the punitive damages award arises out of a criminal act of an insured, a
2724     captive insurance company may provide coverage for punitive damages awarded, including
2725     through adjudication or compromise, against the captive insurance company's:
2726          (a) parent; or
2727          (b) affiliated company[; or].
2728          [(c) controlled unaffiliated business.]
2729          (7) Notwithstanding Subsection (4), if approved by the commissioner, a captive
2730     insurance company may insure as a reimbursement a limited layer or deductible of workers'
2731     compensation coverage.
2732          Section 22. Section 31A-37-204 is amended to read:
2733          31A-37-204. Paid-in capital -- Other capital.
2734          (1) (a) The commissioner may not issue a certificate of authority to a company
2735     described in Subsection (1)(c) unless the company possesses and thereafter maintains
2736     unimpaired paid-in capital and unimpaired paid-in surplus of:
2737          (i) in the case of a pure captive insurance company[,]:
2738          (A) except as provided in Subsection (1)(a)(i)(B), not less than $250,000; or
2739          (B) if the pure captive insurance company is not acting as a pool that facilitates risk
2740     distribution for other captive insurers, an amount that is the greater of:
2741          (I) not less than 20% of the company's total aggregate risk; or
2742          (II) $50,000;
2743          (ii) in the case of an association captive insurance company, not less than $750,000;
2744          (iii) in the case of an industrial insured captive insurance company incorporated as a
2745     stock insurer, not less than $700,000;
2746          (iv) in the case of a sponsored captive insurance company, not less than $500,000, of
2747     which a minimum of $200,000 is provided by the sponsor; or
2748          (v) in the case of a special purpose captive insurance company, an amount determined
2749     by the commissioner after giving due consideration to the company's business plan, feasibility
2750     study, and pro-formas, including the nature of the risks to be insured.
2751          (b) The paid-in capital and surplus required under this Subsection (1) may be in the
2752     form of:
2753          (i) (A) cash; or

2754          (B) cash equivalent;
2755          (ii) an irrevocable letter of credit:
2756          (A) issued by:
2757          (I) a bank chartered by this state; [or]
2758          (II) a member bank of the Federal Reserve System; [and] or
2759          (III) a member bank of the Federal Deposit Insurance Corporation;
2760          (B) approved by the commissioner;
2761          (iii) marketable securities as determined by Subsection (5); or
2762          (iv) some other thing of value approved by the commissioner, for a period not to
2763     exceed 45 days, to facilitate the formation of a captive insurance company in this state pursuant
2764     to an approved plan of liquidation and reorganization of another captive insurance company or
2765     alien captive insurance company in another jurisdiction.
2766          (c) This Subsection (1) applies to:
2767          (i) a pure captive insurance company;
2768          (ii) a sponsored captive insurance company;
2769          (iii) a special purpose captive insurance company;
2770          (iv) an association captive insurance company; or
2771          (v) an industrial insured captive insurance company.
2772          (2) (a) The commissioner may, under Section 31A-37-106, prescribe additional capital
2773     based on the type, volume, and nature of insurance business transacted.
2774          (b) The capital prescribed by the commissioner under this Subsection (2) may be in the
2775     form of:
2776          (i) cash;
2777          (ii) an irrevocable letter of credit issued by:
2778          (A) a bank chartered by this state; or
2779          (B) a member bank of the Federal Reserve System; or
2780          (iii) marketable securities as determined by Subsection (5).
2781          (3) (a) Except as provided in Subsection (3)(c), a branch captive insurance company, as
2782     security for the payment of liabilities attributable to branch operations, shall, through its branch
2783     operations, establish and maintain a trust fund:
2784          (i) funded by an irrevocable letter of credit or other acceptable asset; and

2785          (ii) in the United States for the benefit of:
2786          (A) United States policyholders; and
2787          (B) United States ceding insurers under:
2788          (I) insurance policies issued; or
2789          (II) reinsurance contracts issued or assumed.
2790          (b) The amount of the security required under this Subsection (3) shall be no less than:
2791          (i) the capital and surplus required by this chapter; and
2792          (ii) the reserves on the insurance policies or reinsurance contracts, including:
2793          (A) reserves for losses;
2794          (B) allocated loss adjustment expenses;
2795          (C) incurred but not reported losses; and
2796          (D) unearned premiums with regard to business written through branch operations.
2797          (c) Notwithstanding the other provisions of this Subsection (3):
2798          (i) the commissioner may permit a branch captive insurance company that is required
2799     to post security for loss reserves on branch business by its reinsurer to reduce the funds in the
2800     trust account required by this section by the same amount as the security posted if the security
2801     remains posted with the reinsurer; and
2802          (ii) a branch captive insurance company that is the result of the licensure of an alien
2803     captive insurance company that is not formed in an alien jurisdiction is not subject to the
2804     requirements of this Subsection (3).
2805          (4) (a) A captive insurance company may not pay the following without the prior
2806     approval of the commissioner:
2807          (i) a dividend out of capital or surplus in excess of the limits under Section
2808     16-10a-640; or
2809          (ii) a distribution with respect to capital or surplus in excess of the limits under Section
2810     16-10a-640.
2811          (b) The commissioner shall condition approval of an ongoing plan for the payment of
2812     dividends or other distributions on the retention, at the time of each payment, of capital or
2813     surplus in excess of:
2814          (i) amounts specified by the commissioner under Section 31A-37-106; or
2815          (ii) determined in accordance with formulas approved by the commissioner under

2816     Section 31A-37-106.
2817          (5) For purposes of this section, marketable securities means:
2818          (a) a bond or other evidence of indebtedness of a governmental unit in the United
2819     States or Canada or any instrumentality of the United States or Canada; or
2820          (b) securities:
2821          (i) traded on one or more of the following exchanges in the United States:
2822          (A) New York;
2823          (B) American; or
2824          (C) NASDAQ;
2825          (ii) when no particular security, or a substantially related security, applied toward the
2826     required minimum capital and surplus requirement of Subsection (1) represents more than 50%
2827     of the minimum capital and surplus requirement; and
2828          (iii) when no group of up to four particular securities, consolidating substantially
2829     related securities, applied toward the required minimum capital and surplus requirement of
2830     Subsection (1) represents more than 90% of the minimum capital and surplus requirement.
2831          (6) Notwithstanding Subsection (5), to protect the solvency and liquidity of a captive
2832     insurance company, the commissioner may reject the application of specific assets or amounts
2833     of specific assets to satisfying the requirement of Subsection (1).
2834          Section 23. Section 49-20-401 is amended to read:
2835          49-20-401. Program -- Powers and duties.
2836          (1) The program shall:
2837          (a) act as a self-insurer of employee benefit plans and administer those plans;
2838          (b) enter into contracts with private insurers or carriers to underwrite employee benefit
2839     plans as considered appropriate by the program;
2840          (c) indemnify employee benefit plans or purchase commercial reinsurance as
2841     considered appropriate by the program;
2842          (d) provide descriptions of all employee benefit plans under this chapter in cooperation
2843     with covered employers;
2844          (e) process claims for all employee benefit plans under this chapter or enter into
2845     contracts, after competitive bids are taken, with other benefit administrators to provide for the
2846     administration of the claims process;

2847          (f) obtain an annual actuarial review of all health and dental benefit plans and a
2848     periodic review of all other employee benefit plans;
2849          (g) consult with the covered employers to evaluate employee benefit plans and develop
2850     recommendations for benefit changes;
2851          (h) annually submit a budget and audited financial statements to the governor and
2852     Legislature that includes total projected benefit costs and administrative costs;
2853          (i) maintain reserves sufficient to liquidate the unrevealed claims liability and other
2854     liabilities of the employee benefit plans as certified by the program's consulting actuary;
2855          (j) submit, in advance, the program's recommended benefit and rate adjustments for
2856     state employees, which may include actuarially substantiated member premium differentials
2857     between networks to:
2858          (i) the Legislature; and
2859          (ii) the director of the state Division of Human Resource Management;
2860          (k) determine benefits and rates, upon approval of the board, for multi-employer risk
2861     pools, retiree coverage, and conversion coverage;
2862          (l) determine benefits and rates based on the total estimated costs and the employee
2863     premium share established by the Legislature, upon approval of the board, for state employees;
2864          (m) administer benefits and rates, upon ratification of the board, for single-employer
2865     risk pools;
2866          (n) request proposals for one or more out-of-state provider networks and a dental
2867     health plan administered by a third-party carrier at least once every three years for the purposes
2868     of:
2869          (i) stimulating competition for the benefit of covered individuals;
2870          (ii) establishing better geographical coverage of medical care services; and
2871          (iii) providing coverage for both active and retired covered individuals;
2872          (o) for a proposal that meets the criteria specified in a request for proposals and is
2873     accepted by the program:
2874          (i) offer the proposal to active and retired state-covered individuals; and
2875          (ii) at the option of the covered employer, offer the proposal to active and retired
2876     covered individuals of other covered employers;
2877          (p) perform the same functions established in Subsections (1)(a), (b), (e), and (h) for

2878     the Department of Health and Human Services if the program provides program benefits to
2879     children enrolled in the Utah Children's Health Insurance Program created in Title 26, Chapter
2880     40, Utah Children's Health Insurance Act;
2881          (q) establish rules and procedures governing the admission of political subdivisions or
2882     educational institutions and their employees to the program;
2883          (r) (i) contract directly with medical providers to provide services for covered
2884     individuals at commercially competitive rates; and
2885          (ii) (A) discontinue the preferred network, which offers in-network access to all
2886     in-state hospitals, for the state risk pool created in Subsection 49-20-202(1)(a) for plan years
2887     starting on or after July 1, 2022; and
2888          (B) for an employee in the state risk pool who fails to elect one of the remaining
2889     networks before July 1, 2022, enroll the employee and the employee's dependents into the
2890     network that best reflects the utilization pattern of that employee and the employee's
2891     dependents;
2892          (s) (i) require state employees and the state employees' dependents to participate in the
2893     electronic exchange of clinical health records in accordance with Section 26-1-37 unless the
2894     enrollee opts out of participation; and
2895          (ii) prior to enrolling the state employee, each time the state employee logs onto the
2896     program's website, and each time the enrollee receives written enrollment information from the
2897     program, provide notice to the enrollee of the enrollee's participation in the electronic exchange
2898     of clinical health records and the option to opt out of participation at any time;
2899          (t) at the request of a procurement unit, as that term is defined in Section 63G-6a-103,
2900     that administers benefits to program recipients who are not covered by Title 26, Utah Health
2901     Code, provide services for:
2902          (i) drugs;
2903          (ii) medical devices; or
2904          (iii) other types of medical care; and
2905          (u) take additional actions necessary or appropriate to carry out the purposes of this
2906     chapter.
2907          (2) (a) Funds budgeted and expended shall accrue from rates paid by the covered
2908     employers and covered individuals.

2909          (b) The board shall approve administrative costs and report the administrative costs to
2910     the governor and the Legislature.
2911          (3) The Division of Human Resource Management shall include the benefit and rate
2912     adjustments described in Subsection (1)(j) in the total compensation plan recommended to the
2913     governor required under Subsection 63A-17-307(5)(a).
2914          (4) The program may establish a partnership with a public entity in a different state to
2915     purchase or share services related to the administration of medical benefits if:
2916          (a) the program receives approval for the partnership from the board; and
2917          (b) the partnership:
2918          (i) creates cost savings for Utah;
2919          (ii) does not commingle state funds with funds of the public entity in the other state;
2920     and
2921          (iii) does not pose a greater actuarial risk to Utah than the program has already
2922     assumed.
2923          Section 24. Section 63J-1-602.1 is amended to read:
2924          63J-1-602.1. List of nonlapsing appropriations from accounts and funds.
2925          Appropriations made from the following accounts or funds are nonlapsing:
2926          (1) The Utah Intracurricular Student Organization Support for Agricultural Education
2927     and Leadership Restricted Account created in Section 4-42-102.
2928          (2) The Native American Repatriation Restricted Account created in Section 9-9-407.
2929          (3) The Martin Luther King, Jr. Civil Rights Support Restricted Account created in
2930     Section 9-18-102.
2931          (4) The National Professional Men's Soccer Team Support of Building Communities
2932     Restricted Account created in Section 9-19-102.
2933          (5) Funds collected for directing and administering the C-PACE district created in
2934     Section 11-42a-106.
2935          (6) Money received by the Utah Inland Port Authority, as provided in Section
2936     11-58-105.
2937          (7) The "Latino Community Support Restricted Account" created in Section 13-1-16.
2938          (8) The Clean Air Support Restricted Account created in Section 19-1-109.
2939          (9) The Division of Air Quality Oil, Gas, and Mining Restricted Account created in

2940     Section 19-2a-106.
2941          (10) The Division of Water Quality Oil, Gas, and Mining Restricted Account created in
2942     Section 19-5-126.
2943          (11) The "Support for State-Owned Shooting Ranges Restricted Account" created in
2944     Section 23-14-13.5.
2945          (12) Award money under the State Asset Forfeiture Grant Program, as provided under
2946     Section 24-4-117.
2947          (13) Funds collected from the program fund for local health department expenses
2948     incurred in responding to a local health emergency under Section 26-1-38.
2949          (14) The Children with Cancer Support Restricted Account created in Section
2950     26-21a-304.
2951          (15) State funds for matching federal funds in the Children's Health Insurance Program
2952     as provided in Section 26-40-108.
2953          (16) The Children with Heart Disease Support Restricted Account created in Section
2954     26-58-102.
2955          (17) The Technology Development Restricted Account created in Section 31A-3-104.
2956          (18) The Criminal Background Check Restricted Account created in Section
2957     31A-3-105.
2958          (19) The Captive Insurance Restricted Account created in Section 31A-3-304, except
2959     to the extent that Section 31A-3-304 makes the money received under that section free revenue.
2960          (20) The Title Licensee Enforcement Restricted Account created in Section
2961     31A-23a-415.
2962          (21) The Health Insurance Actuarial Review Restricted Account created in Section
2963     31A-30-115.
2964          (22) The State Mandated Insurer Payments Restricted Account created in Section
2965     31A-30-118.
2966          [(22)] (23) The Insurance Fraud Investigation Restricted Account created in Section
2967     31A-31-108.
2968          [(23)] (24) The Underage Drinking Prevention Media and Education Campaign
2969     Restricted Account created in Section 32B-2-306.
2970          [(24)] (25) The Drinking While Pregnant Prevention Media and Education Campaign

2971     Restricted Account created in Section 32B-2-308.
2972          [(25)] (26) The School Readiness Restricted Account created in Section 35A-15-203.
2973          [(26)] (27) Money received by the Utah State Office of Rehabilitation for the sale of
2974     certain products or services, as provided in Section 35A-13-202.
2975          [(27)] (28) The Oil and Gas Administrative Penalties Account created in Section
2976     40-6-11.
2977          [(28)] (29) The Oil and Gas Conservation Account created in Section 40-6-14.5.
2978          [(29)] (30) The Division of Oil, Gas, and Mining Restricted account created in Section
2979     40-6-23.
2980          [(30)] (31) The Electronic Payment Fee Restricted Account created by Section
2981     41-1a-121 to the Motor Vehicle Division.
2982          [(31)] (32) The Motor Vehicle Enforcement Division Temporary Permit Restricted
2983     Account created by Section 41-3-110 to the State Tax Commission.
2984          [(32)] (33) The Utah Law Enforcement Memorial Support Restricted Account created
2985     in Section 53-1-120.
2986          [(33)] (34) The State Disaster Recovery Restricted Account to the Division of
2987     Emergency Management, as provided in Section 53-2a-603.
2988          [(34)] (35) The Post Disaster Recovery and Mitigation Restricted Account created in
2989     Section 53-2a-1302.
2990          [(35)] (36) The Department of Public Safety Restricted Account to the Department of
2991     Public Safety, as provided in Section 53-3-106.
2992          [(36)] (37) The Utah Highway Patrol Aero Bureau Restricted Account created in
2993     Section 53-8-303.
2994          [(37)] (38) The DNA Specimen Restricted Account created in Section 53-10-407.
2995          [(38)] (39) The Canine Body Armor Restricted Account created in Section 53-16-201.
2996          [(39)] (40) The Technical Colleges Capital Projects Fund created in Section
2997     53B-2a-118.
2998          [(40)] (41) The Higher Education Capital Projects Fund created in Section
2999     53B-22-202.
3000          [(41)] (42) A certain portion of money collected for administrative costs under the
3001     School Institutional Trust Lands Management Act, as provided under Section 53C-3-202.

3002          [(42)] (43) The Public Utility Regulatory Restricted Account created in Section
3003     54-5-1.5, subject to Subsection 54-5-1.5(4)(d).
3004          [(43)] (44) Funds collected from a surcharge fee to provide certain licensees with
3005     access to an electronic reference library, as provided in Section 58-3a-105.
3006          [(44)] (45) Certain fines collected by the Division of Professional Licensing for
3007     violation of unlawful or unprofessional conduct that are used for education and enforcement
3008     purposes, as provided in Section 58-17b-505.
3009          [(45)] (46) Funds collected from a surcharge fee to provide certain licensees with
3010     access to an electronic reference library, as provided in Section 58-22-104.
3011          [(46)] (47) Funds collected from a surcharge fee to provide certain licensees with
3012     access to an electronic reference library, as provided in Section 58-55-106.
3013          [(47)] (48) Funds collected from a surcharge fee to provide certain licensees with
3014     access to an electronic reference library, as provided in Section 58-56-3.5.
3015          [(48)] (49) Certain fines collected by the Division of Professional Licensing for use in
3016     education and enforcement of the Security Personnel Licensing Act, as provided in Section
3017     58-63-103.
3018          [(49)] (50) The Relative Value Study Restricted Account created in Section 59-9-105.
3019          [(50)] (51) The Cigarette Tax Restricted Account created in Section 59-14-204.
3020          [(51)] (52) Funds paid to the Division of Real Estate for the cost of a criminal
3021     background check for a mortgage loan license, as provided in Section 61-2c-202.
3022          [(52)] (53) Funds paid to the Division of Real Estate for the cost of a criminal
3023     background check for principal broker, associate broker, and sales agent licenses, as provided
3024     in Section 61-2f-204.
3025          [(53)] (54) Certain funds donated to the Department of Health and Human Services, as
3026     provided in Section 26B-1-202.
3027          [(54)] (55) The National Professional Men's Basketball Team Support of Women and
3028     Children Issues Restricted Account created in Section 26B-1-302.
3029          [(55)] (56) Certain funds donated to the Division of Child and Family Services, as
3030     provided in Section 80-2-404.
3031          [(56)] (57) The Choose Life Adoption Support Restricted Account created in Section
3032     80-2-502.

3033          [(57)] (58) Funds collected by the Office of Administrative Rules for publishing, as
3034     provided in Section 63G-3-402.
3035          [(58)] (59) The Immigration Act Restricted Account created in Section 63G-12-103.
3036          [(59)] (60) Money received by the military installation development authority, as
3037     provided in Section 63H-1-504.
3038          [(60)] (61) The Computer Aided Dispatch Restricted Account created in Section
3039     63H-7a-303.
3040          [(61)] (62) The Unified Statewide 911 Emergency Service Account created in Section
3041     63H-7a-304.
3042          [(62)] (63) The Utah Statewide Radio System Restricted Account created in Section
3043     63H-7a-403.
3044          [(63)] (64) The Utah Capital Investment Restricted Account created in Section
3045     63N-6-204.
3046          [(64)] (65) The Motion Picture Incentive Account created in Section 63N-8-103.
3047          [(65)] (66) Certain money payable for expenses of the Pete Suazo Utah Athletic
3048     Commission, as provided under Section 63N-10-301.
3049          [(66)] (67) Funds collected by the housing of state probationary inmates or state parole
3050     inmates, as provided in Subsection 64-13e-104(2).
3051          [(67)] (68) Certain forestry and fire control funds utilized by the Division of Forestry,
3052     Fire, and State Lands, as provided in Section 65A-8-103.
3053          [(68)] (69) The Amusement Ride Safety Restricted Account, as provided in Section
3054     72-16-204.
3055          [(69)] (70) Certain funds received by the Office of the State Engineer for well drilling
3056     fines or bonds, as provided in Section 73-3-25.
3057          [(70)] (71) The Water Resources Conservation and Development Fund, as provided in
3058     Section 73-23-2.
3059          [(71)] (72) Funds donated or paid to a juvenile court by private sources, as provided in
3060     Subsection 78A-6-203(1)(c).
3061          [(72)] (73) Fees for certificate of admission created under Section 78A-9-102.
3062          [(73)] (74) Funds collected for adoption document access as provided in Sections
3063     78B-6-141, 78B-6-144, and 78B-6-144.5.

3064          [(74)] (75) Funds collected for indigent defense as provided in Title 78B, Chapter 22,
3065     Part 4, Utah Indigent Defense Commission.
3066          [(75)] (76) The Utah Geological Survey Oil, Gas, and Mining Restricted Account
3067     created in Section 79-3-403.
3068          [(76)] (77) Revenue for golf user fees at the Wasatch Mountain State Park, Palisades
3069     State Park, and Green River State Park, as provided under Section 79-4-403.
3070          [(77)] (78) Funds donated as described in Section 41-1a-422 for the State Park Fees
3071     Restricted Account created in Section 79-4-402 for support of the Division of State Parks' dark
3072     sky initiative.
3073          [(78)] (79) Certain funds received by the Division of State Parks from the sale or
3074     disposal of buffalo, as provided under Section 79-4-1001.