1     
INSURANCE DAMAGES AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Douglas R. Welton

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to actions to recover insurance claims.
10     Highlighted Provisions:
11          This bill:
12          ▸     provides that in an action to recover a claim on certain insurance, an insured is
13     entitled to:
14               •     reasonable attorney's fees; and
15               •     double the amount of the claim, if the court finds the insurer unreasonably
16     delayed or unreasonably denied a claim; and
17          ▸     defines terms.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     ENACTS:
24          31A-26-314, Utah Code Annotated 1953
25     

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 31A-26-314 is enacted to read:

28          31A-26-314. Improper denial of claims prohibited -- Remedies.
29          (1) As used in this section:
30          (a) (i) "First party claimant" means a person who asserts an entitlement to benefits
31     owed directly to or on behalf of an insured under an insurance policy.
32          (ii) "First party claimant" does not include:
33          (A) a nonparticipating provider performing services; or
34          (B) a person asserting a claim against an insured under a liability policy.
35          (b) "Unreasonable delay" means failure to comply with:
36          (i) Section 31A-26-301; and
37          (ii) rules the commissioner makes in accordance with Section 31A-26-301.
38          (c) "Unreasonable denial" means a denial of a claim:
39          (i) that is the result of, or in conjunction with, a violation of Section 31A-26-303; or
40          (ii) without a reasonable basis for the denial.
41          (2) A person engaged in the business of insurance may not unreasonably delay or
42     unreasonably deny payment of a claim for benefits owed to or on behalf of a first party
43     claimant.
44          (3) In a judicial action against an insurer to recover a claim, an insured may recover:
45          (a) reasonable attorney fees; and
46          (b) double the amount of the claim, if the court finds an:
47          (i) unreasonable delay; or
48          (ii) unreasonable denial.
49          (4) This section does not apply to:
50          (a) insurance issued in compliance with Title 34A, Chapter 2, Workers' Compensation
51     Act; or
52          (b) title insurance issued in compliance with this title.