This document includes House Committee Amendments incorporated into the bill on Tue, Feb 28, 2023 at 11:00 AM by pflowers.
Senator Todd D. Weiler proposes the following substitute bill:


1     
INSURANCE ADJUSTER CLAIM AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Todd D. Weiler

5     
House Sponsor: Nelson T. Abbott

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to insurance adjuster claim practices.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     adds to the type of actions that are considered an unfair claim settlement practice by
14     an insurance adjuster; and
15          ▸     makes technical and conforming changes.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          None
20     Utah Code Sections Affected:
21     AMENDS:
22          31A-26-102, as last amended by Laws of Utah 2021, Chapter 252
23          31A-26-303, as last amended by Laws of Utah 1987, Chapter 91
24     

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

26          Section 1. Section 31A-26-102 is amended to read:
27          31A-26-102. Definitions.
28          As used in this chapter, unless expressly provided otherwise:
29          (1) "Company adjuster" means a person employed by an insurer who negotiates or
30     settles claims on behalf of the insurer or an affiliated insurer.
31          (2) "Designated home state" means the state or territory of the United States or the
32     District of Columbia:
33          (a) in which an insurance adjuster does not maintain the adjuster's principal:
34          (i) place of residence; or
35          (ii) place of business;
36          (b) if the resident state, territory, or District of Columbia of the adjuster does not
37     license adjusters for the line of authority sought, the adjuster has qualified for the license as if
38     the person were a resident in the state, territory, or District of Columbia described in
39     Subsection (2)(a), including an applicable:
40          (i) examination requirement;
41          (ii) fingerprint background check requirement; and
42          (iii) continuing education requirement; and
43          (c) that the adjuster has designated as the insurance adjuster's designated home state.
44          (3) "Home state" means:
45          (a) a state or territory of the United States or the District of Columbia in which an
46     insurance adjuster:
47          (i) maintains the adjuster's principal:
48          (A) place of residence; or
49          (B) place of business; and
50          (ii) is licensed to act as a resident adjuster; or
51          (b) if the resident state, territory, or the District of Columbia described in Subsection
52     (3)(a) does not license adjusters for the line of authority sought, a state, territory, or the District
53     of Columbia:
54          (i) in which the adjuster is licensed;
55          (ii) in which the adjuster is in good standing; and
56          (iii) that the adjuster has designated as the adjuster's designated home state.

57          (4) "Independent adjuster" means an insurance adjuster required to be licensed under
58     Section 31A-26-201, who engages in insurance adjusting as a representative of one or more
59     insurers.
60          (5) "Insurance adjusting" or "adjusting" means directing or conducting the
61     investigation, negotiation, or settlement of a claim under an insurance policy, on behalf of an
62     insurer, policyholder, or a claimant under an insurance policy.
63          (6) (a) "Organization" means a person other than a natural person.
64          (b) "Organization" includes a sole proprietorship by which a natural person does
65     business under an assumed name.
66          (7) "Portable electronics insurance" means the same as that term is defined in Section
67     31A-22-1802.
68          (8) "Public adjuster" means a person required to be licensed under Section
69     31A-26-201, who engages in insurance adjusting as a representative of insureds and claimants
70     under insurance policies.
71          (9) "Subrogation" means the assumption of the right to pursue an obligation owed by a
72     debtor to the original creditor.
73          Section 2. Section 31A-26-303 is amended to read:
74          31A-26-303. Unfair claim settlement practices.
75          (1) [No] An insurer or person representing an insurer may not engage in any unfair
76     claim settlement practice under [Subsections (2), (3), and (4)] Subsection (2), (3), or (4).
77          (2) [Each] Except as provided in Subsection (5), each of the following acts is an unfair
78     claim settlement practice:
79          (a) knowingly misrepresenting material facts or the contents of insurance policy
80     provisions at issue in connection with a claim under an insurance contract; however, this
81     provision does not include the failure to disclose information;
82          (b) attempting to use a policy application which was altered by the insurer without
83     notice to, or knowledge, or consent of, the insured as the basis for settling or refusing to settle a
84     claim; [or]
85          (c) failing to settle a claim promptly under one portion of the insurance policy
86     coverage, where liability and the amount of loss are reasonably clear, in order to influence
87     settlements under other portions of the insurance policy coverage, but this Subsection (2)(c)

88     applies only to claims made by persons in direct privity of contract with the insurer[.];
89          (d) separately paying a portion of settlement funds, other than by subrogation, to a
90     lienholder or a party claiming entitlement to reimbursement;
91          (e) insisting on including a lienholder or a party claiming entitlement to
92     reimbursement, other than by subrogation, as a payee on an instrument used to pay settlement
93     funds; or
94          (f) refusing to promptly issue settlement funds without naming a lienholder or a party
95     claiming entitlement to reimbursement, other than by subrogation, if the person receiving the
96     settlement:
97          (i) accepts liability for the satisfaction of liens or claims of entitlement to
98     reimbursement; and
99          (ii) agrees to hold the insurer and insured harmless from the liens and claims.
100          (3) Each of the following is an unfair claim settlement practice if committed or
101     performed with such frequency as to indicate a general business practice by an insurer or
102     persons representing an insurer:
103          (a) failing to acknowledge and act promptly upon communications about claims under
104     insurance policies;
105          (b) failing to adopt and implement reasonable standards for the prompt investigation
106     and processing of claims under insurance policies;
107          (c) compelling insureds to institute litigation to recover amounts due under an
108     insurance policy by offering substantially less than the amounts ultimately recovered in actions
109     brought by those insureds when the amounts claimed were reasonably near to the amounts
110     recovered;
111          (d) failing, after payment of a claim, to inform insureds or beneficiaries, upon request
112     by them, of the coverage under which payment was made;
113          (e) failing to promptly provide to the insured a reasonable explanation of the basis for
114     denial of a claim or for the offer of a compromise settlement;
115          (f) appealing from substantially all arbitration awards in favor of insureds for the
116     purpose of compelling them to accept settlements or compromises for less than the amount
117     awarded in arbitration;
118          (g) delaying the investigation or payment of claims by requiring an insured, claimant,

119     or the physician of either to submit a preliminary claim report and then requiring the
120     subsequent submission of formal proof of loss forms which contain substantially the same
121     information; or
122          (h) not attempting in good faith to effectuate a prompt, fair, and equitable settlement of
123     claims in which liability is reasonably clear.
124          (4) The commissioner may define by rule[,] made in accordance with Title 63G,
125     Chapter 3, Utah Administrative Rulemaking Act, acts or general business practices [which]
126     that are unfair claim settlement practices, after a finding that those practices are misleading,
127     deceptive, unfairly discriminatory, overreaching, or an unreasonable restraint on competition.
128          (5) Subsections (2)(d), (e), and (f) do not apply if:
129          (a) the lienholder holds a lien by statute; or
130          (b) the party's claim to entitlement to reimbursement is under a contractual Ĥ→ obligation
130a     or ←Ĥ lien to
131     repay benefits from compensation received from a responsible third party.
132          [(5)] (6) This section does not create any private cause of action.