Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 24 Third Substitute (2015GS)

Sponsor

Rep. Dunnigan, J.

Final action

Governor Signed 3/27/2015

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• amends definition provisions;
• amends the cap on the Captive Insurance Restricted Account;
• amends service contract provisions to address vehicle protection products;
• revises provisions related to insurance holding companies, including:
• addressing subsidiaries;
• addressing acquisition of control of, divestiture of control of, or merger with domestic insurer;
• providing for acquisitions involving insurers not otherwise covered;
• modifying provisions related to registration of insurers;
• addressing standards and management of an insurer within a holding company system;
• addressing examination of registered insurers;
• providing for supervisory colleges;
• addressing confidentiality of information;
• imposing sanctions;

Every vote on this bill

Bill text

INSURANCE MODIFICATIONS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: James A. Dunnigan
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill modifies the Insurance Code and provisions citing the Insurance Code.
Highlighted Provisions:
This bill:
▸ amends definition provisions;
▸ amends the cap on the Captive Insurance Restricted Account;
▸ amends service contract provisions to address vehicle protection products;
▸ revises provisions related to insurance holding companies, including:
• addressing subsidiaries;
• addressing acquisition of control of, divestiture of control of, or merger with
domestic insurer;
• providing for acquisitions involving insurers not otherwise covered;
• modifying provisions related to registration of insurers;
• addressing standards and management of an insurer within a holding company
system;
• addressing examination of registered insurers;
• providing for supervisory colleges;
• addressing confidentiality of information;
• imposing sanctions;
• providing for receivership;
• providing for recovery;
• allowing revocation, suspension, or renewal of insurers license;
• granting rulemaking authority and authority to issue orders;
• addressing judicial review and mandamus;
• addressing conflicts with other laws; and
• providing for severability;
▸ addresses provisions related to fidelity bonds;
▸ addresses transportation network companies or drivers;
▸ addresses trustee groups;
▸ modifies exemption from conversion privileges for insured former spouse;
▸ modifies definition of "Medicare Supplement Policy";
▸ modifies definitions related to licensing;
▸ addresses license lapse and voluntary surrender;
▸ amends unfair marketing practices to include the use of certain names;
▸ addresses inducements;
▸ addresses continuing education requirements for navigators;
▸ requires third party administrator to maintain with the commissioner certain
information related to place of business and contact information;
▸ addresses receiver's compliance with financial reporting requirements;
▸ restricts subrogation rights against an insolvent insurer's insured;
▸ modifies definition provisions related to captive insurance companies;
▸ addresses commissioner's ability to adopt rules related to waiver or modification of
certain public notice or hearings related to captive insurance companies;
▸ includes certificate of organization as a document used to apply for a certificate of
authority;
▸ addresses requirements for a captive insurance company to conduct insurance
business in this state;
▸ provides for a limited liability company being a captive insurance company;
▸ modifies capital requirements for captive insurance companies;
▸ repeals language related to capital stock of a captive insurance company;
▸ addresses when a captive insurance company can provide reinsurance;
▸ addresses conversion or merger of a captive insurance company;
▸ provides for a sponsored cell captive insurance company;
▸ addresses fees to be paid by a protected cell captive insurance company;
▸ modifies requirements for sponsored captive insurance companies;
▸ clarifies participants in sponsored captive insurance companies;
▸ addresses reporting requirements for sponsored cell captive insurance companies;
▸ modifies the timing of examinations;
▸ repeals free surplus provisions related to captive insurance companies;
▸ repeals provisions related to a captive reinsurance company;
▸ addresses stop-loss insurance coverage standards;
▸ extends the Defined Contribution Risk Adjuster Act; and
▸ makes technical and conforming amendments.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
This bill provides a coordination clause.
Utah Code Sections Affected:
AMENDS:
31A-1-301
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-3-304
 (Effective 07/01/15)
, as last amended by Laws of Utah 2014, Chapters 290
and 300
31A-6a-101
, as enacted by Laws of Utah 1992, Chapter 203
31A-6a-103
, as last amended by Laws of Utah 2008, Chapter 345
31A-6a-104
, as last amended by Laws of Utah 2011, Chapter 297
31A-6a-105
, as last amended by Laws of Utah 2010, Chapter 274
31A-16-103
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-16-105
, as last amended by Laws of Utah 2007, Chapter 306
31A-16-106
, as last amended by Laws of Utah 2010, Chapter 324
31A-16-109
, as last amended by Laws of Utah 1987, Chapter 91
31A-21-313
, as last amended by Laws of Utah 2011, Chapter 297
31A-21-314
, as last amended by Laws of Utah 1987, Chapter 95
31A-22-504
, as enacted by Laws of Utah 1985, Chapter 242
31A-22-612
, as last amended by Laws of Utah 2013, Chapter 319
31A-22-620
, as last amended by Laws of Utah 2009, Chapter 349
31A-23a-102
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-23a-113
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-23a-402
, as last amended by Laws of Utah 2013, Chapter 319
31A-23a-402.5
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-23b-206
, as last amended by Laws of Utah 2014, Chapters 290, 300, 425 and last
amended by Coordination Clause, Laws of Utah 2014, Chapters 300, and 425
31A-27a-116
, as last amended by Laws of Utah 2008, Chapter 382
31A-28-213
, as last amended by Laws of Utah 2007, Chapter 309
31A-37-102
, as last amended by Laws of Utah 2008, Chapter 302
31A-37-106
, as last amended by Laws of Utah 2011, Chapter 297
31A-37-202
, as last amended by Laws of Utah 2011, Chapters 284 and 297
31A-37-204
, as last amended by Laws of Utah 2004, Chapter 312
31A-37-301
, as last amended by Laws of Utah 2011, Chapter 297
31A-37-302
, as last amended by Laws of Utah 2011, Chapter 297
31A-37-303
, as enacted by Laws of Utah 2003, Chapter 251
31A-37-306
, as last amended by Laws of Utah 2011, Chapter 297
31A-37-401
, as enacted by Laws of Utah 2003, Chapter 251
31A-37-402
, as last amended by Laws of Utah 2011, Chapter 297
31A-37-403
, as last amended by Laws of Utah 2004, Chapter 312
31A-37-404
, as enacted by Laws of Utah 2004, Chapter 312
31A-37-501
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-37-502
, as last amended by Laws of Utah 2009, Chapter 349
31A-37-505
, as enacted by Laws of Utah 2003, Chapter 251
31A-43-301
, as last amended by Laws of Utah 2014, Chapters 290 and 300
63I-2-231
, as last amended by Laws of Utah 2013, Chapter 341
ENACTS:
31A-6a-111
, Utah Code Annotated 1953
31A-16-102.5
, Utah Code Annotated 1953
31A-16-104.5
, Utah Code Annotated 1953
31A-16-108.5
, Utah Code Annotated 1953
31A-16-112
, Utah Code Annotated 1953
31A-16-113
, Utah Code Annotated 1953
31A-16-114
, Utah Code Annotated 1953
31A-16-115
, Utah Code Annotated 1953
31A-16-116
, Utah Code Annotated 1953
31A-16-117
, Utah Code Annotated 1953
31A-16-118
, Utah Code Annotated 1953
31A-16-119
, Utah Code Annotated 1953
31A-22-322
, Utah Code Annotated 1953
31A-25-302.5
, Utah Code Annotated 1953
RENUMBERS AND AMENDS:
31A-16-107.5
, (Renumbered from 31A-16-108, as enacted by Laws of Utah 1985,
Chapter 242)
REPEALS:
31A-37-205
, as last amended by Laws of Utah 2004, Chapter 312
31A-37-601
, as last amended by Laws of Utah 2011, Chapter 297
31A-37-602
, as last amended by Laws of Utah 2008, Chapters 302 and 382
31A-37-603
, as last amended by Laws of Utah 2008, Chapter 302
31A-37-604
, as enacted by Laws of Utah 2004, Chapter 312
Utah Code Sections Affected by Coordination Clause:
13-51-108
 , Utah Code Annotated 1953
31A-22-322
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
31A-1-301
 is amended to read:
31A-1-301.
Definitions.
As used in this title, unless otherwise specified:
(1) (a) "Accident and health insurance" means insurance to provide protection against
economic losses resulting from:
(i) a medical condition including:
(A) a medical care expense; or
(B) the risk of disability;
(ii) accident; or
(iii) sickness.
(b) "Accident and health insurance":
(i) includes a contract with disability contingencies including:
(A) an income replacement contract;
(B) a health care contract;
(C) an expense reimbursement contract;
(D) a credit accident and health contract;
(E) a continuing care contract; and
(F) a long-term care contract; and
(ii) may provide:
(A) hospital coverage;
(B) surgical coverage;
(C) medical coverage;
(D) loss of income coverage;
(E) prescription drug coverage;
(F) dental coverage; or
(G) vision coverage.
(c) "Accident and health insurance" does not include workers' compensation insurance.
(2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
63G, Chapter 3, Utah Administrative Rulemaking Act.
(3) "Administrator" is defined in Subsection [
(164)
] 
(166)
.
(4) "Adult" means an individual who has attained the age of at least 18 years.
(5) "Affiliate" means a person who controls, is controlled by, or is under common
control with, another person. A corporation is an affiliate of another corporation, regardless of
ownership, if substantially the same group of individuals manage the corporations.
(6) "Agency" means:
(a) a person other than an individual, including a sole proprietorship by which an
individual does business under an assumed name; and
(b) an insurance organization licensed or required to be licensed under Section
31A-23a-301
, 
31A-25-207
, or 
31A-26-209
.
(7) "Alien insurer" means an insurer domiciled outside the United States.
(8) "Amendment" means an endorsement to an insurance policy or certificate.
(9) "Annuity" means an agreement to make periodical payments for a period certain or
over the lifetime of one or more individuals if the making or continuance of all or some of the
series of the payments, or the amount of the payment, is dependent upon the continuance of
human life.
(10) "Application" means a document:
(a) (i) completed by an applicant to provide information about the risk to be insured;
and
(ii) that contains information that is used by the insurer to evaluate risk and decide
whether to:
(A) insure the risk under:
(I) the coverage as originally offered; or
(II) a modification of the coverage as originally offered; or
(B) decline to insure the risk; or
(b) used by the insurer to gather information from the applicant before issuance of an
annuity contract.
(11) "Articles" or "articles of incorporation" means:
(a) the original articles;
(b) a special law;
(c) a charter;
(d) an amendment;
(e) restated articles;
(f) articles of merger or consolidation;
(g) a trust instrument;
(h) another constitutive document for a trust or other entity that is not a corporation;
and
(i) an amendment to an item listed in Subsections (11)(a) through (h).
(12) "Bail bond insurance" means a guarantee that a person will attend court when
required, up to and including surrender of the person in execution of a sentence imposed under
Subsection 
77-20-7
(1), as a condition to the release of that person from confinement.
(13) "Binder" is defined in Section 
31A-21-102
.
(14) "Blanket insurance policy" means a group policy covering a defined class of
persons:
(a) without individual underwriting or application; and
(b) that is determined by definition without designating each person covered.
(15) "Board," "board of trustees," or "board of directors" means the group of persons
with responsibility over, or management of, a corporation, however designated.
(16) "Bona fide office" means a physical office in this state:
(a) that is open to the public;
(b) that is staffed during regular business hours on regular business days; and
(c) at which the public may appear in person to obtain services.
(17) "Business entity" means:
(a) a corporation;
(b) an association;
(c) a partnership;
(d) a limited liability company;
(e) a limited liability partnership; or
(f) another legal entity.
(18) "Business of insurance" is defined in Subsection [
(88)
] 
(89)
.
(19) "Business plan" means the information required to be supplied to the
commissioner under Subsections 
31A-5-204
(2)(i) and (j), including the information required
when these subsections apply by reference under:
(a) Section 
31A-7-201
;
(b) Section 
31A-8-205
; or
(c) Subsection 
31A-9-205
(2).
(20) (a) "Bylaws" means the rules adopted for the regulation or management of a
corporation's affairs, however designated.
(b) "Bylaws" includes comparable rules for a trust or other entity that is not a
corporation.
(21) "Captive insurance company" means:
(a) an insurer:
(i) owned by another organization; and
(ii) whose exclusive purpose is to insure risks of the parent organization and an
affiliated company; or
(b) in the case of a group or association, an insurer:
(i) owned by the insureds; and
(ii) whose exclusive purpose is to insure risks of:
(A) a member organization;
(B) a group member; or
(C) an affiliate of:
(I) a member organization; or
(II) a group member.
(22) "Casualty insurance" means liability insurance.
(23) "Certificate" means evidence of insurance given to:
(a) an insured under a group insurance policy; or
(b) a third party.
(24) "Certificate of authority" is included within the term "license."
(25) "Claim," unless the context otherwise requires, means a request or demand on an
insurer for payment of a benefit according to the terms of an insurance policy.
(26) "Claims-made coverage" means an insurance contract or provision limiting
coverage under a policy insuring against legal liability to claims that are first made against the
insured while the policy is in force.
(27) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
commissioner.
(b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent
supervisory official of another jurisdiction.
(28) (a) "Continuing care insurance" means insurance that:
(i) provides board and lodging;
(ii) provides one or more of the following:
(A) a personal service;
(B) a nursing service;
(C) a medical service; or
(D) any other health-related service; and
(iii) provides the coverage described in this Subsection (28)(a) under an agreement
effective:
(A) for the life of the insured; or
(B) for a period in excess of one year.
(b) Insurance is continuing care insurance regardless of whether or not the board and
lodging are provided at the same location as a service described in Subsection (28)(a)(ii).
(29) (a) "Control," "controlling," "controlled," or "under common control" means the
direct or indirect possession of the power to direct or cause the direction of the management
and policies of a person. This control may be:
(i) by contract;
(ii) by common management;
(iii) through the ownership of voting securities; or
(iv) by a means other than those described in Subsections (29)(a)(i) through (iii).
(b) There is no presumption that an individual holding an official position with another
person controls that person solely by reason of the position.
(c) A person having a contract or arrangement giving control is considered to have
control despite the illegality or invalidity of the contract or arrangement.
(d) There is a rebuttable presumption of control in a person who directly or indirectly
owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
voting securities of another person.
(30) "Controlled insurer" means a licensed insurer that is either directly or indirectly
controlled by a producer.
(31) "Controlling person" means a person that directly or indirectly has the power to
direct or cause to be directed, the management, control, or activities of a reinsurance
intermediary.
(32) "Controlling producer" means a producer who directly or indirectly controls an
insurer.
(33) (a) "Corporation" means an insurance corporation, except when referring to:
(i) a corporation doing business:
(A) as:
(I) an insurance producer;
(II) a surplus lines producer;
(III) a limited line producer;
(IV) a consultant;
(V) a managing general agent;
(VI) a reinsurance intermediary;
(VII) a third party administrator; or
(VIII) an adjuster; and
(B) under:
(I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
Reinsurance Intermediaries;
(II) Chapter 25, Third Party Administrators; or
(III) Chapter 26, Insurance Adjusters; or
(ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
Holding Companies.
(b) "Stock corporation" means a stock insurance corporation.
(c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
(34) (a) "Creditable coverage" has the same meaning as provided in federal regulations
adopted pursuant to the Health Insurance Portability and Accountability Act.
(b) "Creditable coverage" includes coverage that is offered through a public health plan
such as:
(i) the Primary Care Network Program under a Medicaid primary care network
demonstration waiver obtained subject to Section 
26-18-3
;
(ii) the Children's Health Insurance Program under Section 
26-40-106
; or
(iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.
(35) "Credit accident and health insurance" means insurance on a debtor to provide
indemnity for payments coming due on a specific loan or other credit transaction while the
debtor has a disability.
(36) (a) "Credit insurance" means insurance offered in connection with an extension of
credit that is limited to partially or wholly extinguishing that credit obligation.
(b) "Credit insurance" includes:
(i) credit accident and health insurance;
(ii) credit life insurance;
(iii) credit property insurance;
(iv) credit unemployment insurance;
(v) guaranteed automobile protection insurance;
(vi) involuntary unemployment insurance;
(vii) mortgage accident and health insurance;
(viii) mortgage guaranty insurance; and
(ix) mortgage life insurance.
(37) "Credit life insurance" means insurance on the life of a debtor in connection with
an extension of credit that pays a person if the debtor dies.
[
(40)
] 
(38)
 "Creditor" means a person, including an insured, having a claim, whether:
(a) matured;
(b) unmatured;
(c) liquidated;
(d) unliquidated;
(e) secured;
(f) unsecured;
(g) absolute;
(h) fixed; or
(i) contingent.
(39) "Credit unemployment insurance" means insurance:
(a) offered in connection with an extension of credit; and
(b) that provides indemnity if the debtor is unemployed for payments coming due on a:
(i) specific loan; or
(ii) credit transaction.
[
(38)
] 
(40)
 "Credit property insurance" means insurance:
(a) offered in connection with an extension of credit; and
(b) that protects the property until the debt is paid.
(41) (a) "Crop insurance" means insurance providing protection against damage to
crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation,
disease, or other yield-reducing conditions or perils that is:
(i) provided by the private insurance market; or
(ii) subsidized by the Federal Crop Insurance Corporation.
(b) "Crop insurance" includes multiperil crop insurance.
(42) (a) "Customer service representative" means a person that provides an insurance
service and insurance product information:
(i) for the customer service representative's:
(A) producer;
(B) surplus lines producer; or
(C) consultant employer; and
(ii) to the customer service representative's employer's:
(A) customer;
(B) client; or
(C) organization.
(b) A customer service representative may only operate within the scope of authority of
the customer service representative's producer, surplus lines producer, or consultant employer.
(43) "Deadline" means a final date or time:
(a) imposed by:
(i) statute;
(ii) rule; or
(iii) order; and
(b) by which a required filing or payment must be received by the department.
(44) "Deemer clause" means a provision under this title under which upon the
occurrence of a condition precedent, the commissioner is considered to have taken a specific
action. If the statute so provides, a condition precedent may be the commissioner's failure to
take a specific action.
(45) "Degree of relationship" means the number of steps between two persons
determined by counting the generations separating one person from a common ancestor and
then counting the generations to the other person.
(46) "Department" means the Insurance Department.
(47) "Director" means a member of the board of directors of a corporation.
(48) "Disability" means a physiological or psychological condition that partially or
totally limits an individual's ability to:
(a) perform the duties of:
(i) that individual's occupation; or
(ii) an occupation for which the individual is reasonably suited by education, training,
or experience; or
(b) perform two or more of the following basic activities of daily living:
(i) eating;
(ii) toileting;
(iii) transferring;
(iv) bathing; or
(v) dressing.
(49) "Disability income insurance" is defined in Subsection [
(79)
] 
(80)
.
(50) "Domestic insurer" means an insurer organized under the laws of this state.
(51) "Domiciliary state" means the state in which an insurer:
(a) is incorporated;
(b) is organized; or
(c) in the case of an alien insurer, enters into the United States.
(52) (a) "Eligible employee" means:
(i) an employee who:
(A) works on a full-time basis; and
(B) has a normal work week of 30 or more hours; or
(ii) a person described in Subsection (52)(b).
(b) "Eligible employee" includes, if the individual is included under a health benefit
plan of a small employer:
(i) a sole proprietor;
(ii) a partner in a partnership; or
(iii) an independent contractor.
(c) "Eligible employee" does not include, unless eligible under Subsection (52)(b):
(i) an individual who works on a temporary or substitute basis for a small employer;
(ii) an employer's spouse; or
(iii) a dependent of an employer.
(53) "Employee" means an individual employed by an employer.
(54) "Employee benefits" means one or more benefits or services provided to:
(a) an employee; or
(b) a dependent of an employee.
(55) (a) "Employee welfare fund" means a fund:
(i) established or maintained, whether directly or through a trustee, by:
(A) one or more employers;
(B) one or more labor organizations; or
(C) a combination of employers and labor organizations; and
(ii) that provides employee benefits paid or contracted to be paid, other than income
from investments of the fund:
(A) by or on behalf of an employer doing business in this state; or
(B) for the benefit of a person employed in this state.
(b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax
revenues.
(56) "Endorsement" means a written agreement attached to a policy or certificate to
modify the policy or certificate coverage.
(57) "Enrollment date," with respect to a health benefit plan, means:
(a) the first day of coverage; or
(b) if there is a waiting period, the first day of the waiting period.
(58) "Enterprise risk" means an activity, circumstance, event, or series of events
involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a
material adverse effect upon the financial condition or liquidity of the insurer or its insurance
holding company system as a whole, including anything that would cause:
(a) the insurer's risk-based capital to fall into an action or control level as set forth in
Sections 
31A-17-601
 through 
31A-17-613
; or
(b) the insurer to be in hazardous financial condition set forth in Section 
31A-27a-101
.
[
(58)
] 
(59)
 (a) "Escrow" means:
(i) a transaction that effects the sale, transfer, encumbering, or leasing of real property,
when a person not a party to the transaction, and neither having nor acquiring an interest in the
title, performs, in accordance with the written instructions or terms of the written agreement
between the parties to the transaction, any of the following actions:
(A) the explanation, holding, or creation of a document; or
(B) the receipt, deposit, and disbursement of money;
(ii) a settlement or closing involving:
(A) a mobile home;
(B) a grazing right;
(C) a water right; or
(D) other personal property authorized by the commissioner.
(b) "Escrow" does not include:
(i) the following notarial acts performed by a notary within the state:
(A) an acknowledgment;
(B) a copy certification;
(C) jurat; and
(D) an oath or affirmation;
(ii) the receipt or delivery of a document; or
(iii) the receipt of money for delivery to the escrow agent.
[
(59)
] 
(60)
 "Escrow agent" means an agency title insurance producer meeting the
requirements of Sections 
31A-4-107
, 
31A-14-211
, and 
31A-23a-204
, who is acting through an
individual title insurance producer licensed with an escrow subline of authority.
[
(60)
] 
(61)
 (a) "Excludes" is not exhaustive and does not mean that another thing is not
also excluded.
(b) The items listed in a list using the term "excludes" are representative examples for
use in interpretation of this title.
[
(61)
] 
(62)
 "Exclusion" means for the purposes of accident and health insurance that an
insurer does not provide insurance coverage, for whatever reason, for one of the following:
(a) a specific physical condition;
(b) a specific medical procedure;
(c) a specific disease or disorder; or
(d) a specific prescription drug or class of prescription drugs.
[
(62)
] 
(63)
 "Expense reimbursement insurance" means insurance:
(a) written to provide a payment for an expense relating to hospital confinement
resulting from illness or injury; and
(b) written:
(i) as a daily limit for a specific number of days in a hospital; and
(ii) to have a one or two day waiting period following a hospitalization.
[
(63)
] 
(64)
 "Fidelity insurance" means insurance guaranteeing the fidelity of a person
holding a position of public or private trust.
[
(64)
] 
(65)
 (a) "Filed" means that a filing is:
(i) submitted to the department as required by and in accordance with applicable
statute, rule, or filing order;
(ii) received by the department within the time period provided in applicable statute,
rule, or filing order; and
(iii) accompanied by the appropriate fee in accordance with:
(A) Section 
31A-3-103
; or
(B) rule.
(b) "Filed" does not include a filing that is rejected by the department because it is not
submitted in accordance with Subsection [
(64)
] 
(65)
(a).
[
(65)
] 
(66)
 "Filing," when used as a noun, means an item required to be filed with the
department including:
(a) a policy;
(b) a rate;
(c) a form;
(d) a document;
(e) a plan;
(f) a manual;
(g) an application;
(h) a report;
(i) a certificate;
(j) an endorsement;
(k) an actuarial certification;
(l) a licensee annual statement;
(m) a licensee renewal application;
(n) an advertisement; [
or
]
(o) a binder; or
[
(o)
] 
(p)
 an outline of coverage.
[
(66)
] 
(67)
 "First party insurance" means an insurance policy or contract in which the
insurer agrees to pay a claim submitted to it by the insured for the insured's losses.
[
(67)
] 
(68)
 "Foreign insurer" means an insurer domiciled outside of this state, including
an alien insurer.
[
(68)
] 
(69)
 (a) "Form" means one of the following prepared for general use:
(i) a policy;
(ii) a certificate;
(iii) an application;
(iv) an outline of coverage; or
(v) an endorsement.
(b) "Form" does not include a document specially prepared for use in an individual
case.
[
(69)
] 
(70)
 "Franchise insurance" means an individual insurance policy provided
through a mass marketing arrangement involving a defined class of persons related in some
way other than through the purchase of insurance.
[
(70)
] 
(71)
 "General lines of authority" include:
(a) the general lines of insurance in Subsection [
(71)
] 
(72)
;
(b) title insurance under one of the following sublines of authority:
(i) search, including authority to act as a title marketing representative;
(ii) escrow, including authority to act as a title marketing representative; and
(iii) title marketing representative only;
(c) surplus lines;
(d) workers' compensation; and
(e) another line of insurance that the commissioner considers necessary to recognize in
the public interest.
[
(71)
] 
(72)
 "General lines of insurance" include:
(a) accident and health;
(b) casualty;
(c) life;
(d) personal lines;
(e) property; and
(f) variable contracts, including variable life and annuity.
[
(72)
] 
(73)
 "Group health plan" means an employee welfare benefit plan to the extent
that the plan provides medical care:
(a) (i) to an employee; or
(ii) to a dependent of an employee; and
(b) (i) directly;
(ii) through insurance reimbursement; or
(iii) through another method.
[
(73)
] 
(74)
 (a) "Group insurance policy" means a policy covering a group of persons
that is issued:
(i) to a policyholder on behalf of the group; and
(ii) for the benefit of a member of the group who is selected under a procedure defined
in:
(A) the policy; or
(B) an agreement that is collateral to the policy.
(b) A group insurance policy may include a member of the policyholder's family or a
dependent.
[
(74)
] 
(75)
 "Guaranteed automobile protection insurance" means insurance offered in
connection with an extension of credit that pays the difference in amount between the
insurance settlement and the balance of the loan if the insured automobile is a total loss.
[
(75)
] 
(76)
 (a) Except as provided in Subsection [
(75)
] 
(76)
(b), "health benefit plan"
means a policy or certificate that:
(i) provides health care insurance;
(ii) provides major medical expense insurance; or
(iii) is offered as a substitute for hospital or medical expense insurance, such as:
(A) a hospital confinement indemnity; or
(B) a limited benefit plan.
(b) "Health benefit plan" does not include a policy or certificate that:
(i) provides benefits solely for:
(A) accident;
(B) dental;
(C) income replacement;
(D) long-term care;
(E) a Medicare supplement;
(F) a specified disease;
(G) vision; or
(H) a short-term limited duration; or
(ii) is offered and marketed as supplemental health insurance.
[
(76)
] 
(77)
 "Health care" means any of the following intended for use in the diagnosis,
treatment, mitigation, or prevention of a human ailment or impairment:
(a) a professional service;
(b) a personal service;
(c) a facility;
(d) equipment;
(e) a device;
(f) supplies; or
(g) medicine.
[
(77)
] 
(78)
 (a) "Health care insurance" or "health insurance" means insurance
providing:
(i) a health care benefit; or
(ii) payment of an incurred health care expense.
(b) "Health care insurance" or "health insurance" does not include accident and health
insurance providing a benefit for:
(i) replacement of income;
(ii) short-term accident;
(iii) fixed indemnity;
(iv) credit accident and health;
(v) supplements to liability;
(vi) workers' compensation;
(vii) automobile medical payment;
(viii) no-fault automobile;
(ix) equivalent self-insurance; or
(x) a type of accident and health insurance coverage that is a part of or attached to
another type of policy.
[
(78)
] 
(79)
 "Health Insurance Portability and Accountability Act" means the Health
Insurance Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as
amended.
[
(79)
] 
(80)
 "Income replacement insurance" or "disability income insurance" means
insurance written to provide payments to replace income lost from accident or sickness.
[
(80)
] 
(81)
 "Indemnity" means the payment of an amount to offset all or part of an
insured loss.
[
(81)
] 
(82)
 "Independent adjuster" means an insurance adjuster required to be licensed
under Section 
31A-26-201
 who engages in insurance adjusting as a representative of an insurer.
[
(82)
] 
(83)
 "Independently procured insurance" means insurance procured under
Section 
31A-15-104
.
[
(83)
] 
(84)
 "Individual" means a natural person.
[
(84)
] 
(85)
 "Inland marine insurance" includes insurance covering:
(a) property in transit on or over land;
(b) property in transit over water by means other than boat or ship;
(c) bailee liability;
(d) fixed transportation property such as bridges, electric transmission systems, radio
and television transmission towers and tunnels; and
(e) personal and commercial property floaters.
[
(85)
] 
(86)
 "Insolvency" means that:
(a) an insurer is unable to pay its debts or meet its obligations as the debts and
obligations mature;
(b) an insurer's total adjusted capital is less than the insurer's mandatory control level
RBC under Subsection 
31A-17-601
(8)(c); or
(c) an insurer is determined to be hazardous under this title.
[
(86)
] 
(87)
 (a) "Insurance" means:
(i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
persons to one or more other persons; or
(ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
group of persons that includes the person seeking to distribute that person's risk.
(b) "Insurance" includes:
(i) a risk distributing arrangement providing for compensation or replacement for
damages or loss through the provision of a service or a benefit in kind;
(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
business and not as merely incidental to a business transaction; and
(iii) a plan in which the risk does not rest upon the person who makes an arrangement,
but with a class of persons who have agreed to share the risk.
[
(87)
] 
(88)
 "Insurance adjuster" means a person who directs or conducts the
investigation, negotiation, or settlement of a claim under an insurance policy other than life
insurance or an annuity, on behalf of an insurer, policyholder, or a claimant under an insurance
policy.
[
(88)
] 
(89)
 "Insurance business" or "business of insurance" includes:
(a) providing health care insurance by an organization that is or is required to be
licensed under this title;
(b) providing a benefit to an employee in the event of a contingency not within the
control of the employee, in which the employee is entitled to the benefit as a right, which
benefit may be provided either:
(i) by a single employer or by multiple employer groups; or
(ii) through one or more trusts, associations, or other entities;
(c) providing an annuity:
(i) including an annuity issued in return for a gift; and
(ii) except an annuity provided by a person specified in Subsections 
31A-22-1305
(2)
and (3);
(d) providing the characteristic services of a motor club as outlined in Subsection
[
(116)
] 
(117)
;
(e) providing another person with insurance;
(f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
or surety, a contract or policy of title insurance;
(g) transacting or proposing to transact any phase of title insurance, including:
(i) solicitation;
(ii) negotiation preliminary to execution;
(iii) execution of a contract of title insurance;
(iv) insuring; and
(v) transacting matters subsequent to the execution of the contract and arising out of
the contract, including reinsurance;
(h) transacting or proposing a life settlement; and
(i) doing, or proposing to do, any business in substance equivalent to Subsections
[
(88)
] 
(89)
(a) through (h) in a manner designed to evade this title.
[
(89)
] 
(90)
 "Insurance consultant" or "consultant" means a person who:
(a) advises another person about insurance needs and coverages;
(b) is compensated by the person advised on a basis not directly related to the insurance
placed; and
(c) except as provided in Section 
31A-23a-501
, is not compensated directly or
indirectly by an insurer or producer for advice given.
[
(90)
] 
(91)
 "Insurance holding company system" means a group of two or more
affiliated persons, at least one of whom is an insurer.
[
(91)
] 
(92)
 (a) "Insurance producer" or "producer" means a person licensed or required
to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
(b) (i) "Producer for the insurer" means a producer who is compensated directly or
indirectly by an insurer for selling, soliciting, or negotiating an insurance product of that
insurer.
(ii) "Producer for the insurer" may be referred to as an "agent."
(c) (i) "Producer for the insured" means a producer who:
(A) is compensated directly and only by an insurance customer or an insured; and
(B) receives no compensation directly or indirectly from an insurer for selling,
soliciting, or negotiating an insurance product of that insurer to an insurance customer or
insured.
(ii) "Producer for the insured" may be referred to as a "broker."
[
(92)
] 
(93)
 (a) "Insured" means a person to whom or for whose benefit an insurer
makes a promise in an insurance policy and includes:
(i) a policyholder;
(ii) a subscriber;
(iii) a member; and
(iv) a beneficiary.
(b) The definition in Subsection [
(92)
] 
(93)
(a):
(i) applies only to this title; and
(ii) does not define the meaning of this word as used in an insurance policy or
certificate.
[
(93)
] 
(94)
 (a) "Insurer" means a person doing an insurance business as a principal
including:
(i) a fraternal benefit society;
(ii) an issuer of a gift annuity other than an annuity specified in Subsections
31A-22-1305
(2) and (3);
(iii) a motor club;
(iv) an employee welfare plan; and
(v) a person purporting or intending to do an insurance business as a principal on that
person's own account.
(b) "Insurer" does not include a governmental entity to the extent the governmental
entity is engaged in an activity described in Section 
31A-12-107
.
[
(94)
] 
(95)
 "Interinsurance exchange" is defined in Subsection [
(147)
] 
(148)
.
[
(95)
] 
(96)
 "Involuntary unemployment insurance" means insurance:
(a) offered in connection with an extension of credit; and
(b) that provides indemnity if the debtor is involuntarily unemployed for payments
coming due on a:
(i) specific loan; or
(ii) credit transaction.
[
(96)
] 
(97)
 "Large employer," in connection with a health benefit plan, means an
employer who, with respect to a calendar year and to a plan year:
(a) employed an average of at least 51 eligible employees on each business day during
the preceding calendar year; and
(b) employs at least two employees on the first day of the plan year.
[
(97)
] 
(98)
 "Late enrollee," with respect to an employer health benefit plan, means an
individual whose enrollment is a late enrollment.
[
(98)
] 
(99)
 "Late enrollment," with respect to an employer health benefit plan, means
enrollment of an individual other than:
(a) on the earliest date on which coverage can become effective for the individual
under the terms of the plan; or
(b) through special enrollment.
[
(99)
] 
(100)
 (a) Except for a retainer contract or legal assistance described in Section
31A-1-103
, "legal expense insurance" means insurance written to indemnify or pay for a
specified legal expense.
(b) "Legal expense insurance" includes an arrangement that creates a reasonable
expectation of an enforceable right.
(c) "Legal expense insurance" does not include the provision of, or reimbursement for,
legal services incidental to other insurance coverage.
[
(100)
] 
(101)
 (a) "Liability insurance" means insurance against liability:
(i) for death, injury, or disability of a human being, or for damage to property,
exclusive of the coverages under:
(A) Subsection [
(110)
] 
(111)
 for medical malpractice insurance;
(B) Subsection [
(138)
] 
(139)
 for professional liability insurance; and
(C) Subsection [
(173)
] 
(175)
 for workers' compensation insurance;
(ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
insured who is injured, irrespective of legal liability of the insured, when issued with or
supplemental to insurance against legal liability for the death, injury, or disability of a human
being, exclusive of the coverages under:
(A) Subsection [
(110)
] 
(111)
 for medical malpractice insurance;
(B) Subsection [
(138)
] 
(139)
 for professional liability insurance; and
(C) Subsection [
(173)
] 
(175)
 for workers' compensation insurance;
(iii) for loss or damage to property resulting from an accident to or explosion of a
boiler, pipe, pressure container, machinery, or apparatus;
(iv) for loss or damage to property caused by:
(A) the breakage or leakage of a sprinkler, water pipe, or water container; or
(B) water entering through a leak or opening in a building; or
(v) for other loss or damage properly the subject of insurance not within another kind
of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
(b) "Liability insurance" includes:
(i) vehicle liability insurance;
(ii) residential dwelling liability insurance; and
(iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
boiler, machinery, or apparatus of any kind when done in connection with insurance on the
elevator, boiler, machinery, or apparatus.
[
(101)
] 
(102)
 (a) "License" means authorization issued by the commissioner to engage
in an activity that is part of or related to the insurance business.
(b) "License" includes a certificate of authority issued to an insurer.
[
(102)
] 
(103)
 (a) "Life insurance" means:
(i) insurance on a human life; and
(ii) insurance pertaining to or connected with human life.
(b) The business of life insurance includes:
(i) granting a death benefit;
(ii) granting an annuity benefit;
(iii) granting an endowment benefit;
(iv) granting an additional benefit in the event of death by accident;
(v) granting an additional benefit to safeguard the policy against lapse; and
(vi) providing an optional method of settlement of proceeds.
[
(103)
] 
(104)
 "Limited license" means a license that:
(a) is issued for a specific product of insurance; and
(b) limits an individual or agency to transact only for that product or insurance.
[
(104)
] 
(105)
 "Limited line credit insurance" includes the following forms of
insurance:
(a) credit life;
(b) credit accident and health;
(c) credit property;
(d) credit unemployment;
(e) involuntary unemployment;
(f) mortgage life;
(g) mortgage guaranty;
(h) mortgage accident and health;
(i) guaranteed automobile protection; and
(j) another form of insurance offered in connection with an extension of credit that:
(i) is limited to partially or wholly extinguishing the credit obligation; and
(ii) the commissioner determines by rule should be designated as a form of limited line
credit insurance.
[
(105)
] 
(106)
 "Limited line credit insurance producer" means a person who sells,
solicits, or negotiates one or more forms of limited line credit insurance coverage to an
individual through a master, corporate, group, or individual policy.
[
(106)
] 
(107)
 "Limited line insurance" includes:
(a) bail bond;
(b) limited line credit insurance;
(c) legal expense insurance;
(d) motor club insurance;
(e) car rental related insurance;
(f) travel insurance;
(g) crop insurance;
(h) self-service storage insurance;
(i) guaranteed asset protection waiver;
(j) portable electronics insurance; and
(k) another form of limited insurance that the commissioner determines by rule should
be designated a form of limited line insurance.
[
(107)
] 
(108)
 "Limited lines authority" includes the lines of insurance listed in
Subsection [
(106)
] 
(107)
.
[
(108)
] 
(109)
 "Limited lines producer" means a person who sells, solicits, or negotiates
limited lines insurance.
[
(109)
] 
(110)
 (a) "Long-term care insurance" means an insurance policy or rider
advertised, marketed, offered, or designated to provide coverage:
(i) in a setting other than an acute care unit of a hospital;
(ii) for not less than 12 consecutive months for a covered person on the basis of:
(A) expenses incurred;
(B) indemnity;
(C) prepayment; or
(D) another method;
(iii) for one or more necessary or medically necessary services that are:
(A) diagnostic;
(B) preventative;
(C) therapeutic;
(D) rehabilitative;
(E) maintenance; or
(F) personal care; and
(iv) that may be issued by:
(A) an insurer;
(B) a fraternal benefit society;
(C) (I) a nonprofit health hospital; and
(II) a medical service corporation;
(D) a prepaid health plan;
(E) a health maintenance organization; or
(F) an entity similar to the entities described in Subsections [
(109)
] 
(110)
(a)(iv)(A)
through (E) to the extent that the entity is otherwise authorized to issue life or health care
insurance.
(b) "Long-term care insurance" includes:
(i) any of the following that provide directly or supplement long-term care insurance:
(A) a group or individual annuity or rider; or
(B) a life insurance policy or rider;
(ii) a policy or rider that provides for payment of benefits on the basis of:
(A) cognitive impairment; or
(B) functional capacity; or
(iii) a qualified long-term care insurance contract.
(c) "Long-term care insurance" does not include:
(i) a policy that is offered primarily to provide basic Medicare supplement coverage;
(ii) basic hospital expense coverage;
(iii) basic medical/surgical expense coverage;
(iv) hospital confinement indemnity coverage;
(v) major medical expense coverage;
(vi) income replacement or related asset-protection coverage;
(vii) accident only coverage;
(viii) coverage for a specified:
(A) disease; or
(B) accident;
(ix) limited benefit health coverage; or
(x) a life insurance policy that accelerates the death benefit to provide the option of a
lump sum payment:
(A) if the following are not conditioned on the receipt of long-term care:
(I) benefits; or
(II) eligibility; and
(B) the coverage is for one or more the following qualifying events:
(I) terminal illness;
(II) medical conditions requiring extraordinary medical intervention; or
(III) permanent institutional confinement.
[
(110)
] 
(111)
 "Medical malpractice insurance" means insurance against legal liability
incident to the practice and provision of a medical service other than the practice and provision
of a dental service.
[
(111)
] 
(112)
 "Member" means a person having membership rights in an insurance
corporation.
[
(112)
] 
(113)
 "Minimum capital" or "minimum required capital" means the capital that
must be constantly maintained by a stock insurance corporation as required by statute.
[
(113)
] 
(114)
 "Mortgage accident and health insurance" means insurance offered in
connection with an extension of credit that provides indemnity for payments coming due on a
mortgage while the debtor has a disability.
[
(114)
] 
(115)
 "Mortgage guaranty insurance" means surety insurance under which a
mortgagee or other creditor is indemnified against losses caused by the default of a debtor.
[
(115)
] 
(116)
 "Mortgage life insurance" means insurance on the life of a debtor in
connection with an extension of credit that pays if the debtor dies.
[
(116)
] 
(117)
 "Motor club" means a person:
(a) licensed under:
(i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(ii) Chapter 11, Motor Clubs; or
(iii) Chapter 14, Foreign Insurers; and
(b) that promises for an advance consideration to provide for a stated period of time
one or more:
(i) legal services under Subsection 
31A-11-102
(1)(b);
(ii) bail services under Subsection 
31A-11-102
(1)(c); or
(iii) (A) trip reimbursement;
(B) towing services;
(C) emergency road services;
(D) stolen automobile services;
(E) a combination of the services listed in Subsections [
(116)
] 
(117)
(b)(iii)(A) through
(D); or
(F) other services given in Subsections 
31A-11-102
(1)(b) through (f).
[
(117)
] 
(118)
 "Mutual" means a mutual insurance corporation.
[
(118)
] 
(119)
 "Network plan" means health care insurance:
(a) that is issued by an insurer; and
(b) under which the financing and delivery of medical care is provided, in whole or in
part, through a defined set of providers under contract with the insurer, including the financing
and delivery of an item paid for as medical care.
[
(119)
] 
(120)
 "Nonparticipating" means a plan of insurance under which the insured is
not entitled to receive a dividend representing a share of the surplus of the insurer.
[
(120)
] 
(121)
 "Ocean marine insurance" means insurance against loss of or damage to:
(a) ships or hulls of ships;
(b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
(c) earnings such as freight, passage money, commissions, or profits derived from
transporting goods or people upon or across the oceans or inland waterways; or
(d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
in connection with maritime activity.
[
(121)
] 
(122)
 "Order" means an order of the commissioner.
[
(122)
] 
(123)
 "Outline of coverage" means a summary that explains an accident and
health insurance policy.
[
(123)
] 
(124)
 "Participating" means a plan of insurance under which the insured is
entitled to receive a dividend representing a share of the surplus of the insurer.
[
(124)
] 
(125)
 "Participation," as used in a health benefit plan, means a requirement
relating to the minimum percentage of eligible employees that must be enrolled in relation to
the total number of eligible employees of an employer reduced by each eligible employee who
voluntarily declines coverage under the plan because the employee:
(a) has other group health care insurance coverage; or
(b) receives:
(i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
Security Amendments of 1965; or
(ii) another government health benefit.
[
(125)
] 
(126)
 "Person" includes:
(a) an individual;
(b) a partnership;
(c) a corporation;
(d) an incorporated or unincorporated association;
(e) a joint stock company;
(f) a trust;
(g) a limited liability company;
(h) a reciprocal;
(i) a syndicate; or
(j) another similar entity or combination of entities acting in concert.
[
(126)
] 
(127)
 "Personal lines insurance" means property and casualty insurance
coverage sold for primarily noncommercial purposes to:
(a) an individual; or
(b) a family.
[
(127)
] 
(128)
 "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
[
(128)
] 
(129)
 "Plan year" means:
(a) the year that is designated as the plan year in:
(i) the plan document of a group health plan; or
(ii) a summary plan description of a group health plan;
(b) if the plan document or summary plan description does not designate a plan year or
there is no plan document or summary plan description:
(i) the year used to determine deductibles or limits;
(ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
or
(iii) the employer's taxable year if:
(A) the plan does not impose deductibles or limits on a yearly basis; and
(B) (I) the plan is not insured; or
(II) the insurance policy is not renewed on an annual basis; or
(c) in a case not described in Subsection [
(128)
] 
(129)
(a) or (b), the calendar year.
[
(129)
] 
(130)
 (a) "Policy" means a document, including an attached endorsement or
application that:
(i) purports to be an enforceable contract; and
(ii) memorializes in writing some or all of the terms of an insurance contract.
(b) "Policy" includes a service contract issued by:
(i) a motor club under Chapter 11, Motor Clubs;
(ii) a service contract provided under Chapter 6a, Service Contracts; and
(iii) a corporation licensed under:
(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
(B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
(c) "Policy" does not include:
(i) a certificate under a group insurance contract; or
(ii) a document that does not purport to have legal effect.
[
(130)
] 
(131)
 "Policyholder" means a person who controls a policy, binder, or oral
contract by ownership, premium payment, or otherwise.
[
(131)
] 
(132)
 "Policy illustration" means a presentation or depiction that includes
nonguaranteed elements of a policy of life insurance over a period of years.
[
(132)
] 
(133)
 "Policy summary" means a synopsis describing the elements of a life
insurance policy.
[
(133)
] 
(134)
 "PPACA" means the Patient Protection and Affordable Care Act, Pub. L.
No. 111-148 and the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152,
and related federal regulations and guidance.
[
(134)
] 
(135)
 "Preexisting condition," with respect to a health benefit plan:
(a) means a condition that was present before the effective date of coverage, whether or
not medical advice, diagnosis, care, or treatment was recommended or received before that day;
and
(b) does not include a condition indicated by genetic information unless an actual
diagnosis of the condition by a physician has been made.
[
(135)
] 
(136)
 (a) "Premium" means the monetary consideration for an insurance policy.
(b) "Premium" includes, however designated:
(i) an assessment;
(ii) a membership fee;
(iii) a required contribution; or
(iv) monetary consideration.
(c) (i) "Premium" does not include consideration paid to a third party administrator for
the third party administrator's services.
(ii) "Premium" includes an amount paid by a third party administrator to an insurer for
insurance on the risks administered by the third party administrator.
[
(136)
] 
(137)
 "Principal officers" for a corporation means the officers designated under
Subsection 
31A-5-203
(3).
[
(137)
] 
(138)
 "Proceeding" includes an action or special statutory proceeding.
[
(138)
] 
(139)
 "Professional liability insurance" means insurance against legal liability
incident to the practice of a profession and provision of a professional service.
[
(139)
] 
(140)
 (a) Except as provided in Subsection [
(139)
] 
(140)
(b), "property
insurance" means insurance against loss or damage to real or personal property of every kind
and any interest in that property:
(i) from all hazards or causes; and
(ii) against loss consequential upon the loss or damage including vehicle
comprehensive and vehicle physical damage coverages.
(b) "Property insurance" does not include:
(i) inland marine insurance; and
(ii) ocean marine insurance.
[
(140)
] 
(141)
 "Qualified long-term care insurance contract" or "federally tax qualified
long-term care insurance contract" means:
(a) an individual or group insurance contract that meets the requirements of Section
7702B(b), Internal Revenue Code; or
(b) the portion of a life insurance contract that provides long-term care insurance:
(i) (A) by rider; or
(B) as a part of the contract; and
(ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
Code.
[
(141)
] 
(142)
 "Qualified United States financial institution" means an institution that:
(a) is:
(i) organized under the laws of the United States or any state; or
(ii) in the case of a United States office of a foreign banking organization, licensed
under the laws of the United States or any state;
(b) is regulated, supervised, and examined by a United States federal or state authority
having regulatory authority over a bank or trust company; and
(c) meets the standards of financial condition and standing that are considered
necessary and appropriate to regulate the quality of a financial institution whose letters of credit
will be acceptable to the commissioner as determined by:
(i) the commissioner by rule; or
(ii) the Securities Valuation Office of the National Association of Insurance
Commissioners.
[
(142)
] 
(143)
 (a) "Rate" means:
(i) the cost of a given unit of insurance; or
(ii) for property or casualty insurance, that cost of insurance per exposure unit either
expressed as:
(A) a single number; or
(B) a pure premium rate, adjusted before the application of individual risk variations
based on loss or expense considerations to account for the treatment of:
(I) expenses;
(II) profit; and
(III) individual insurer variation in loss experience.
(b) "Rate" does not include a minimum premium.
[
(143)
] 
(144)
 (a) Except as provided in Subsection [
(143)
] 
(144)
(b), "rate service
organization" means a person who assists an insurer in rate making or filing by:
(i) collecting, compiling, and furnishing loss or expense statistics;
(ii) recommending, making, or filing rates or supplementary rate information; or
(iii) advising about rate questions, except as an attorney giving legal advice.
(b) "Rate service organization" does not mean:
(i) an employee of an insurer;
(ii) a single insurer or group of insurers under common control;
(iii) a joint underwriting group; or
(iv) an individual serving as an actuarial or legal consultant.
[
(144)
] 
(145)
 "Rating manual" means any of the following used to determine initial and
renewal policy premiums:
(a) a manual of rates;
(b) a classification;
(c) a rate-related underwriting rule; and
(d) a rating formula that describes steps, policies, and procedures for determining
initial and renewal policy premiums.
[
(145)
] 
(146)
 (a) "Rebate" means a licensee paying, allowing, giving, or offering to
pay, allow, or give, directly or indirectly:
(i) a refund of premium or portion of premium;
(ii) a refund of commission or portion of commission;
(iii) a refund of all or a portion of a consultant fee; or
(iv) providing services or other benefits not specified in an insurance or annuity
contract.
(b) "Rebate" does not include:
(i) a refund due to termination or changes in coverage;
(ii) a refund due to overcharges made in error by the licensee; or
(iii) savings or wellness benefits as provided in the contract by the licensee.
[
(146)
] 
(147)
 "Received by the department" means:
(a) the date delivered to and stamped received by the department, if delivered in
person;
(b) the post mark date, if delivered by mail;
(c) the delivery service's post mark or pickup date, if delivered by a delivery service;
(d) the received date recorded on an item delivered, if delivered by:
(i) facsimile;
(ii) email; or
(iii) another electronic method; or
(e) a date specified in:
(i) a statute;
(ii) a rule; or
(iii) an order.
[
(147)
] 
(148)
 "Reciprocal" or "interinsurance exchange" means an unincorporated
association of persons:
(a) operating through an attorney-in-fact common to all of the persons; and
(b) exchanging insurance contracts with one another that provide insurance coverage
on each other.
[
(148)
] 
(149)
 "Reinsurance" means an insurance transaction where an insurer, for
consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
reinsurance transactions, this title sometimes refers to:
(a) the insurer transferring the risk as the "ceding insurer"; and
(b) the insurer assuming the risk as the:
(i) "assuming insurer"; or
(ii) "assuming reinsurer."
[
(149)
] 
(150)
 "Reinsurer" means a person licensed in this state as an insurer with the
authority to assume reinsurance.
[
(150)
] 
(151)
 "Residential dwelling liability insurance" means insurance against
liability resulting from or incident to the ownership, maintenance, or use of a residential
dwelling that is a detached single family residence or multifamily residence up to four units.
[
(151)
] 
(152)
 (a) "Retrocession" means reinsurance with another insurer of a liability
assumed under a reinsurance contract.
(b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
liability assumed under a reinsurance contract.
[
(152)
] 
(153)
 "Rider" means an endorsement to:
(a) an insurance policy; or
(b) an insurance certificate.
[
(153)
] 
(154)
 (a) "Security" means a:
(i) note;
(ii) stock;
(iii) bond;
(iv) debenture;
(v) evidence of indebtedness;
(vi) certificate of interest or participation in a profit-sharing agreement;
(vii) collateral-trust certificate;
(viii) preorganization certificate or subscription;
(ix) transferable share;
(x) investment contract;
(xi) voting trust certificate;
(xii) certificate of deposit for a security;
(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
payments out of production under such a title or lease;
(xiv) commodity contract or commodity option;
(xv) certificate of interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
in Subsections [
(153)
] 
(154)
(a)(i) through (xiv); or
(xvi) another interest or instrument commonly known as a security.
(b) "Security" does not include:
(i) any of the following under which an insurance company promises to pay money in a
specific lump sum or periodically for life or some other specified period:
(A) insurance;
(B) an endowment policy; or
(C) an annuity contract; or
(ii) a burial certificate or burial contract.
(155) "Securityholder" means a specified person who owns a security of a person,
including:
(a) common stock;
(b) preferred stock;
(c) debt obligations; and
(d) any other security convertible into or evidencing the right of any of the items listed
in this Subsection (155).
[
(154)
] 
(156)
 "Secondary medical condition" means a complication related to an
exclusion from coverage in accident and health insurance.
[
(155)
] 
(157)
 (a) "Self-insurance" means an arrangement under which a person
provides for spreading its own risks by a systematic plan.
(b) Except as provided in this Subsection [
(155)
] 
(157)
, "self-insurance" does not
include an arrangement under which a number of persons spread their risks among themselves.
(c) "Self-insurance" includes:
(i) an arrangement by which a governmental entity undertakes to indemnify an
employee for liability arising out of the employee's employment; and
(ii) an arrangement by which a person with a managed program of self-insurance and
risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
employees for liability or risk that is related to the relationship or employment.
(d) "Self-insurance" does not include an arrangement with an independent contractor.
[
(156)
] 
(158)
 "Sell" means to exchange a contract of insurance:
(a) by any means;
(b) for money or its equivalent; and
(c) on behalf of an insurance company.
[
(157)
] 
(159)
 "Short-term care insurance" means an insurance policy or rider
advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
insurance, but that provides coverage for less than 12 consecutive months for each covered
person.
[
(158)
] 
(160)
 "Significant break in coverage" means a period of 63 consecutive days
during each of which an individual does not have creditable coverage.
[
(159)
] 
(161)
 "Small employer" means, in connection with a health benefit plan and
with respect to a calendar year and to a plan year, an employer who:
(a) employed at least one employee but not more than an average of 50 eligible
employees on business days during the preceding calendar year; and
(b) employs at least one employee on the first day of the plan year.
[
(160)
] 
(162)
 "Special enrollment period," in connection with a health benefit plan, has
the same meaning as provided in federal regulations adopted pursuant to the Health Insurance
Portability and Accountability Act.
[
(161)
] 
(163)
 (a) "Subsidiary" of a person means an affiliate controlled by that person
either directly or indirectly through one or more affiliates or intermediaries.
(b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
shares are owned by that person either alone or with its affiliates, except for the minimum
number of shares the law of the subsidiary's domicile requires to be owned by directors or
others.
[
(162)
] 
(164)
 Subject to Subsection [
(86)
] 
(87)
(b), "surety insurance" includes:
(a) a guarantee against loss or damage resulting from the failure of a principal to pay or
perform the principal's obligations to a creditor or other obligee;
(b) bail bond insurance; and
(c) fidelity insurance.
[
(163)
] 
(165)
 (a) "Surplus" means the excess of assets over the sum of paid-in capital
and liabilities.
(b) (i) "Permanent surplus" means the surplus of an insurer or organization that is
designated by the insurer or organization as permanent.
(ii) Sections 
31A-5-211
, 
31A-7-201
, 
31A-8-209
, 
31A-9-209
, and 
31A-14-205
 require
that insurers or organizations doing business in this state maintain specified minimum levels of
permanent surplus.
(iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
same as the minimum required capital requirement that applies to stock insurers.
(c) "Excess surplus" means:
(i) for a life insurer, accident and health insurer, health organization, or property and
casualty insurer as defined in Section 
31A-17-601
, the lesser of:
(A) that amount of an insurer's or health organization's total adjusted capital that
exceeds the product of:
(I) 2.5; and
(II) the sum of the insurer's or health organization's minimum capital or permanent
surplus required under Section 
31A-5-211
, 
31A-9-209
, or 
31A-14-205
; or
(B) that amount of an insurer's or health organization's total adjusted capital that
exceeds the product of:
(I) 3.0; and
(II) the authorized control level RBC as defined in Subsection 
31A-17-601
(8)(a); and
(ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
(A) 1.5; and
(B) the insurer's total adjusted capital required by Subsection 
31A-17-609
(1).
[
(164)
] 
(166)
 "Third party administrator" or "administrator" means a person who
collects charges or premiums from, or who, for consideration, adjusts or settles claims of
residents of the state in connection with insurance coverage, annuities, or service insurance
coverage, except:
(a) a union on behalf of its members;
(b) a person administering a:
(i) pension plan subject to the federal Employee Retirement Income Security Act of
1974;
(ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
(iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
(c) an employer on behalf of the employer's employees or the employees of one or
more of the subsidiary or affiliated corporations of the employer;
(d) an insurer licensed under the following, but only for a line of insurance for which
the insurer holds a license in this state:
(i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(ii) Chapter 7, Nonprofit Health Service Insurance Corporations;
(iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
(iv) Chapter 9, Insurance Fraternals; or
(v) Chapter 14, Foreign Insurers;
(e) a person:
(i) licensed or exempt from licensing under:
(A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
Reinsurance Intermediaries; or
(B) Chapter 26, Insurance Adjusters; and
(ii) whose activities are limited to those authorized under the license the person holds
or for which the person is exempt; or
(f) an institution, bank, or financial institution:
(i) that is:
(A) an institution whose deposits and accounts are to any extent insured by a federal
deposit insurance agency, including the Federal Deposit Insurance Corporation or National
Credit Union Administration; or
(B) a bank or other financial institution that is subject to supervision or examination by
a federal or state banking authority; and
(ii) that does not adjust claims without a third party administrator license.
[
(165)
] 
(167)
 "Title insurance" means the insuring, guaranteeing, or indemnifying of an
owner of real or personal property or the holder of liens or encumbrances on that property, or
others interested in the property against loss or damage suffered by reason of liens or
encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
or unenforceability of any liens or encumbrances on the property.
[
(166)
] 
(168)
 "Total adjusted capital" means the sum of an insurer's or health
organization's statutory capital and surplus as determined in accordance with:
(a) the statutory accounting applicable to the annual financial statements required to be
filed under Section 
31A-4-113
; and
(b) another item provided by the RBC instructions, as RBC instructions is defined in
Section 
31A-17-601
.
[
(167)
] 
(169)
 (a) "Trustee" means "director" when referring to the board of directors of
a corporation.
(b) "Trustee," when used in reference to an employee welfare fund, means an
individual, firm, association, organization, joint stock company, or corporation, whether acting
individually or jointly and whether designated by that name or any other, that is charged with
or has the overall management of an employee welfare fund.
[
(168)
] 
(170)
 (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
insurer" means an insurer:
(i) not holding a valid certificate of authority to do an insurance business in this state;
or
(ii) transacting business not authorized by a valid certificate.
(b) "Admitted insurer" or "authorized insurer" means an insurer:
(i) holding a valid certificate of authority to do an insurance business in this state; and
(ii) transacting business as authorized by a valid certificate.
[
(169)
] 
(171)
 "Underwrite" means the authority to accept or reject risk on behalf of the
insurer.
[
(170)
] 
(172)
 "Vehicle liability insurance" means insurance against liability resulting
from or incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a
vehicle comprehensive or vehicle physical damage coverage under Subsection [
(139)
] 
(140)
.
[
(171)
] 
(173)
 "Voting security" means a security with voting rights, and includes a
security convertible into a security with a voting right associated with the security.
[
(172)
] 
(174)
 "Waiting period" for a health benefit plan means the period that must
pass before coverage for an individual, who is otherwise eligible to enroll under the terms of
the health benefit plan, can become effective.
[
(173)
] 
(175)
 "Workers' compensation insurance" means:
(a) insurance for indemnification of an employer against liability for compensation
based on:
(i) a compensable accidental injury; and
(ii) occupational disease disability;
(b) employer's liability insurance incidental to workers' compensation insurance and
written in connection with workers' compensation insurance; and
(c) insurance assuring to a person entitled to workers' compensation benefits the
compensation provided by law.
Section 2. Section 
31A-3-304 (Effective 07/01/15)
 is amended to read:
31A-3-304 (Effective 07/01/15).
Annual fees -- Other taxes or fees prohibited --
Captive Insurance Restricted Account.
(1) (a) A captive insurance company shall pay an annual fee imposed under this section
to obtain or renew a certificate of authority.
(b) The commissioner shall:
(i) determine the annual fee pursuant to Section 
31A-3-103
; and
(ii) consider whether the annual fee is competitive with fees imposed by other states on
captive insurance companies.
(2) A captive insurance company that fails to pay the fee required by this section is
subject to the relevant sanctions of this title.
(3) (a) Except as provided in Subsection (3)(d) and notwithstanding Title 59, Chapter
9, Taxation of Admitted Insurers, the following constitute the sole taxes, fees, or charges under
the laws of this state that may be levied or assessed on a captive insurance company:
(i) a fee under this section;
(ii) a fee under Chapter 37, Captive Insurance Companies Act; and
(iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
Act.
(b) The state or a county, city, or town within the state may not levy or collect an
occupation tax or other tax, fee, or charge not described in Subsections (3)(a)(i) through (iii)
against a captive insurance company.
(c) The state may not levy, assess, or collect a withdrawal fee under Section 
31A-4-115
against a captive insurance company.
(d) A captive insurance company is subject to real and personal property taxes.
(4) A captive insurance company shall pay the fee imposed by this section to the
commissioner by June 1 of each year.
(5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
deposited into the Captive Insurance Restricted Account.
(b) There is created in the General Fund a restricted account known as the "Captive
Insurance Restricted Account."
(c) The Captive Insurance Restricted Account shall consist of the fees described in
Subsection (3)(a).
(d) The commissioner shall administer the Captive Insurance Restricted Account. 
Subject to appropriations by the Legislature, the commissioner shall use the money deposited
into the Captive Insurance Restricted Account to:
(i) administer and enforce:
(A) Chapter 37, Captive Insurance Companies Act; and
(B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
(ii) promote the captive insurance industry in Utah.
(e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
except that at the end of each fiscal year, money received by the commissioner in excess of
[
$1,250,000
] 
the following
 shall be treated as free revenue in the General Fund[
.
]
:
(i) for fiscal year 2015-2016, in excess of $1,250,000;
(ii) for fiscal year 2016-2017, in excess of $1,250,000; and
(iii) for fiscal year 2017-2018 and subsequent fiscal years, in excess of $1,850,000.
Section 3. Section 
31A-6a-101
 is amended to read:
31A-6a-101.
Definitions.
(1) "Mechanical breakdown insurance" means a policy, contract, or agreement issued
by an insurance company that has complied with either [
Title 31A,
] Chapter 5, Domestic Stock
and Mutual Insurance Corporations, or [
Title 31A,
] Chapter 14, Foreign Insurers, that
undertakes to perform or provide repair or replacement service on goods or property, or
indemnification for repair or replacement service, for the operational or structural failure of the
goods or property due to a defect in materials, workmanship, or normal wear and tear.
(2) "Nonmanufacturers' parts" means replacement parts not made for or by the original
manufacturer of the goods commonly referred to as "after market parts."
(3) (a) "Road hazard" means a hazard that is encountered while driving a motor
vehicle.
(b) "Road hazard" includes potholes, rocks, wood debris, metal parts, glass, plastic,
curbs, or composite scraps.
[
(3)
] 
(4)
 (a) "Service contract" means a contract or agreement 
to perform or reimburse
for the repair or maintenance of goods or property, for their operational or structural failure due
to a defect in materials, workmanship, or normal wear and tear, with or without additional
provision for incidental payment of indemnity under limited circumstances.
(b) "Service contract" does not include mechanical breakdown insurance [
as defined in
Subsection (1)
].
(c) "Service contract" includes any contract or agreement to perform or reimburse the
service contract holder for any one or more of the following services:
(i) the repair or replacement of tires, wheels, or both on a motor vehicle damaged as a
result of coming into contact with a road hazard;
(ii) the removal of dents, dings, or creases on a motor vehicle that can be repaired using
the process of paintless dent removal without affecting the existing paint finish and without
replacing vehicle body panels, sanding, bonding, or painting;
(iii) the repair of chips or cracks in or the replacement of a motor vehicle windshield as
a result of damage caused by a road hazard, that is primary to the coverage offered by the motor
vehicle owner's motor vehicle insurance policy; or
(iv) the replacement of a motor vehicle key or key-fob if the key or key-fob becomes
inoperable, lost, or stolen, except that the replacement of lost or stolen property is limited to
only the replacement of a lost or stolen motor vehicle key or key-fob.
[
(4)
] 
(5)
 "Service contract holder" or "contract holder" means a person who purchases a
service contract.
[
(5)
] 
(6)
 "Service contract provider" means a person who issues, makes, provides,
administers, sells or offers to sell a service contract, or who is contractually obligated to
provide service under a service contract.
[
(6)
] 
(7)
 "Service contract reimbursement policy" or "reimbursement insurance policy"
means a policy of insurance providing coverage for all obligations and liabilities incurred by
the service contract provider under the terms of the service contract issued by the provider.
(8) (a) "Vehicle protection product" means a device or system that is:
(i) installed on or applied to a motor vehicle; and
(ii) designed to prevent the theft of the vehicle.
(b) "Vehicle protection product" includes:
(i) a vehicle protection product warranty;
(ii) an alarm system;
(iii) a body part marking product;
(iv) a steering lock;
(v) a window etch product;
(vi) a pedal and ignition lock;
(vii) a fuel and ignition kill switch; and
(viii) an electronic, radio, or satellite tracking device.
(9) "Vehicle protection product warranty" means a written agreement by a warrantor
that provides if the vehicle protection product fails to prevent the theft of the motor vehicle,
that the warrantor will reimburse the warranty holder under the warranty in a fixed amount
specified in the warranty, not to exceed $5,000.
(10) "Warrantor" means a person who is contractually obligated to the warranty holder
under the terms of a vehicle protection product warranty.
(11) "Warranty holder" means the person who purchases a vehicle protection product,
any authorized transferee or assignee of the purchaser, or any other person legally assuming the
purchaser's rights under the vehicle protection product warranty.
Section 4. Section 
31A-6a-103
 is amended to read:
31A-6a-103.
Requirements for doing business.
(1) A service contract 
or vehicle protection product warranty
 may not be issued, sold,
or offered for sale in this state unless the service contract 
or vehicle protection product
warranty
 is insured under a [
service contract
] reimbursement insurance policy issued by:
(a) an insurer authorized to do business in this state; or
(b) a recognized surplus lines carrier.
(2) (a) A service contract 
or vehicle protection product warranty
 may not be issued,
sold, or offered for sale unless the service contract provider 
or warrantor
 completes the
registration process described in this Subsection (2).
(b) To register, a service contract provider 
or warrantor
 shall submit to the department
the following:
(i) an application for registration;
(ii) a fee established in accordance with Section 
31A-3-103
;
(iii) a copy of any service contract 
or vehicle protection product warranty
 that the
service contract provider 
or warrantor
 offers in this state; and
(iv) a copy of the service contract provider's 
or warrantor's
 reimbursement insurance
policy.
(c) A service provider 
or warrantor
 shall submit the information described in
Subsection (2)(b) no less than 30 days before the day on which the service provider 
or
warrantor
 issues, sells, offers for sale, or uses a service contract
, vehicle protection product
warranty,
 or reimbursement insurance policy in this state.
(d) A service provider 
or warrantor
 shall file any modification of the terms of a service
contract
, vehicle protection product warranty,
 or reimbursement insurance policy 30 days
before the day on which it is used in this state.
(e) A person complying with this chapter is not required to comply with:
(i) Subsections 
31A-21-201
(1) and 
31A-23a-402
(3); or
(ii) Chapter 19a, Utah Rate Regulation Act.
(3) (a) Premiums collected on a service contract are not subject to premium taxes.
(b) Premiums collected by an issuer of a reimbursement insurance policy are subject to
premium taxes.
(4) A person marketing, selling, or offering to sell a service contract 
or vehicle
protection product warranty
 for a service contract provider 
or warrantor
 that complies with this
chapter is exempt from the licensing requirements of this title.
(5) A service contract provider 
or warrantor
 complying with this chapter is not required
to comply with:
(a) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(b) Chapter 7, Nonprofit Health Service Insurance Corporations;
(c) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
(d) Chapter 9, Insurance Fraternals;
(e) Chapter 10, Annuities;
(f) Chapter 11, Motor Clubs;
(g) Chapter 12, State Risk Management Fund;
(h) Chapter 13, Employee Welfare Funds and Plans;
(i) Chapter 14, Foreign Insurers;
(j) Chapter 19a, Utah Rate Regulation Act;
(k) Chapter 25, Third Party Administrators; and
(l) Chapter 28, Guaranty Associations.
Section 5. Section 
31A-6a-104
 is amended to read:
31A-6a-104.
Required disclosures.
(1) A service contract reimbursement insurance policy insuring a service contract that
is issued, sold, or offered for sale in this state shall conspicuously state that, upon failure of the
service contract provider to perform under the contract, the issuer of the policy shall:
(a) pay on behalf of the service contract provider any sums the service contract
provider is legally obligated to pay according to the service contract provider's contractual
obligations under the service contract issued or sold by the service contract provider; or
(b) provide the service which the service contract provider is legally obligated to
perform, according to the service contract provider's contractual obligations under the service
contract issued or sold by the service contract provider.
(2) (a) A service contract may not be issued, sold, or offered for sale in this state unless
the service contract contains the following statements in substantially the following form:
(i) "Obligations of the provider under this service contract are guaranteed under a
service contract reimbursement insurance policy. Should the provider fail to pay or provide
service on any claim within 60 days after proof of loss has been filed, the contract holder is
entitled to make a claim directly against the Insurance Company."; and
(ii) "This service contract or warranty is subject to limited regulation by the Utah
Insurance Department. To file a complaint, contact the Utah Insurance Department."
(b) A service contract or reimbursement insurance policy may not be issued, sold, or
offered for sale in this state unless the contract contains a statement in substantially the
following form, "Coverage afforded under this contract is not guaranteed by the Property and
Casualty Guaranty Association."
(3) A service contract shall:
(a) conspicuously state the name, address, and a toll free claims service telephone
number of the reimbursement insurer;
(b) identify the service contract provider, the seller, and the service contract holder;
(c) conspicuously state the total purchase price and the terms under which the service
contract is to be paid;
(d) conspicuously state the existence of any deductible amount;
(e) specify the merchandise, service to be provided, and any limitation, exception, or
exclusion;
(f) state a term, restriction, or condition governing the transferability of the service
contract; and
(g) state a term, restriction, or condition that governs cancellation of the service
contract as provided in Sections 
31A-21-303
 through 
31A-21-305
 by either the contract holder
or service contract provider.
(4) If prior approval of repair work is required, a service contract shall conspicuously
state the procedure for obtaining prior approval and for making a claim, including:
(a) a toll free telephone number for claim service; and
(b) a procedure for obtaining reimbursement for emergency repairs performed outside
of normal business hours.
(5) A preexisting condition clause in a service contract shall specifically state which
preexisting condition is excluded from coverage.
(6) (a) Except as provided in Subsection (6)(c), a service contract shall state the
conditions upon which the use of a nonmanufacturers' part is allowed.
(b) A condition described in Subsection (6)(a) shall comply with applicable state and
federal laws.
(c) This Subsection (6) does not apply to a home warranty contract.
(7) This section applies to a vehicle protection product warranty, except for the
requirements of Subsection (3)(g). The department may make rules in accordance with Title
63G, Chapter 3, Utah Administrative Rulemaking Act, to implement the application of this
section to a vehicle protection product warranty.
(8) A vehicle protection product warranty shall contain a conspicuous statement in
substantially the following form: "Purchase of this product is optional and is not required in
order to finance, lease, or purchase a motor vehicle."
Section 6. Section 
31A-6a-105
 is amended to read:
31A-6a-105.
Prohibited acts.
(1) Except as provided in Subsection 
31A-6a-104
(2), a service contract provider may
not use in its name, a contract, or literature:
(a) any of the following words:
(i) "insurance";
(ii) "casualty";
(iii) "surety";
(iv) "mutual"; or
(v) another word descriptive of the insurance, casualty, or surety business; or
(b) a name deceptively similar to the name or description of:
(i) an insurance or surety corporation; or
(ii) another service contract provider.
(2) A service contract provider or the service contract provider's representative may
not:
(a) make, permit, or cause to be made a false or misleading statement in connection
with the sale, offer to sell, or advertisement of a service contract; or
(b) deliberately omit a material statement that would be considered misleading if
omitted, in connection with the sale, offer to sell, or advertisement of a service contract.
(3) A bank, savings and loan association, insurance company, or other lending
institution may not require the purchase of a service contract as a condition of a loan.
(4) Except for a bank, savings and loan association, industrial bank, or credit union, a
service contract provider may not sell, or be the obligated party for:
(a) a guaranteed asset protection waiver, unless registered with the commissioner under
Chapter 6b, Guaranteed Asset Protection Waiver Act;
(b) a debt cancellation agreement, unless licensed by the commissioner; or
(c) a debt suspension agreement, unless licensed by the commissioner.
(5) A warrantor or its representative may not require the purchase of a vehicle
protection product as a condition of the financing, lease, or purchase of a motor vehicle.
Section 7. Section 
31A-6a-111
 is enacted to read:
 31A-6a-111.
Vehicle protection product warranty requirements.
The fixed amount of reimbursement under a vehicle protection product warranty shall
be uniform for all warranty holders of the same vehicle protection product warranty.
Section 8. Section 
31A-16-102.5
 is enacted to read:
 31A-16-102.5.
Subsidiaries of insurers.
(1) (a) A domestic insurer may organize or acquire one or more subsidiaries either:
(i) by itself; or
(ii) in cooperation with one or more persons.
(b) A subsidiary of a domestic insurer may conduct any kind of business or businesses
and its authority to do so may not be limited by reason of the fact that it is a subsidiary of a
domestic insurer.
(2) (a) In addition to investments in common stock, preferred stock, debt obligations,
and other securities permitted under all other sections of this chapter, a domestic insurer may
also invest in the following securities of one or more subsidiaries:
(i) common stock;
(ii) preferred stock;
(iii) debt obligations; or
(iv) other securities.
(b) Amounts under Subsection (2)(a) that do not exceed the lesser of 10% of the
insurer's assets or 50% of the insurer's surplus as regards policyholders are permitted, if after
the investments, the insurer's surplus as regards policyholders will be reasonable in relation to
the insurer's outstanding liabilities and adequate to meet its financial needs.
(c) In calculating the amount of the investments described in Subsection (2)(b),
investments in domestic or foreign insurance subsidiaries and health organizations shall be
excluded, and there shall be included:
(i) total net money or other consideration expended and obligations assumed in the
acquisition or formation of a subsidiary, including all organizational expenses and
contributions to capital and surplus of the subsidiary whether or not represented by the
purchase of capital stock or issuance of other securities; and
(ii) the amounts expended in acquiring additional common stock, preferred stock, debt
obligations, and other securities, and all contributions to the capital or surplus of a subsidiary
subsequent to its acquisition or formation.
(d) (i) A domestic insurer may invest any amount in securities described in Subsection
(2)(a) of one or more subsidiaries engaged or organized to engage exclusively in the ownership
and management of assets authorized as investments for the insurer if each subsidiary agrees to
limit its investments in any asset so that the investments will not cause the amount of the total
investment of the insurer to exceed any of the investment limitations specified in Subsection
(2)(b) applicable to the insurer.
(ii) For purposes of this Subsection (2)(d), "the total investment of the insurer" shall
include:
(A) a direct investment by the insurer in an asset; and
(B) the insurer's proportionate share of an investment in an asset by a subsidiary of the
insurer, which shall be calculated by multiplying the amount of the subsidiary's investment by
the percentage of the ownership of the subsidiary.
(e) With the approval of the commissioner, a domestic insurer may invest any greater
amount in securities described in Subsection (2)(a) provided that after the investment the
insurer's surplus as regards policyholders will be reasonable in relation to the insurer's
outstanding liabilities and adequate to its financial needs.
(3) Investments in securities described in Subsection (2)(a) may not be subject to any
of the otherwise applicable restrictions or prohibitions contained in this chapter applicable to
the investments of insurers.
(4) Whether any investment made pursuant to Subsection (2) meets the applicable
requirements of Subsection (2) shall be determined before the investment is made, by
calculating the applicable investment limitations as though the investment had already been
made, taking into account:
(a) the then outstanding principal balance on all previous investments in debt
obligations; and
(b) the value of all previous investments in equity securities as of the day they were
made net of any return of capital invested not including dividends.
(5) (a) Subject to Subsection (5)(b), if an insurer ceases to control a subsidiary, it shall
dispose of any investment in the subsidiary made pursuant to this section:
(i) within three years from the time of the cessation of control; or
(ii) within such further time as the commissioner may prescribe.
(b) Subsection (5)(a) does not apply if at any time after the investment is made, the
investment meets the requirements for investment under any other section of this chapter, and
the insurer has so notified the commissioner.
Section 9. Section 
31A-16-103
 is amended to read:
31A-16-103.
Acquisition of control of, divestiture of control of, or merger with
domestic insurer.
(1) (a) A person may not take the actions described in [
Subsections
] 
Subsection
 (1)(b)
or (c) unless, at the time any offer, request, or invitation is made or any such agreement is
entered into, or prior to the acquisition of securities if no offer or agreement is involved:
(i) the person files with the commissioner a statement containing the information
required by this section;
(ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
insurer; and
(iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
(b) Unless the person complies with Subsection (1)(a), a person other than the issuer
may not make a tender offer for, a request or invitation for tenders of, or enter into any
agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
any voting security of a domestic insurer if after the acquisition, the person would directly,
indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
(c) Unless the person complies with Subsection (1)(a), a person may not enter into an
agreement to merge with or otherwise to acquire control of:
(i) a domestic insurer; or
(ii) any person controlling a domestic insurer.
(d) For purposes of this section, a controlling person of a domestic insurer seeking to
divest its controlling interest in the domestic insurer, in any manner, shall file with the
commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least
days before the cessation of control. The commissioner shall determine those instances in
which the one or more persons seeking to divest or to acquire a controlling interest in an
insurer, will be required to file for and obtain approval of the transaction. The information
shall remain confidential until the conclusion of the transaction unless the commissioner, in the
commissioner's discretion, determines that confidential treatment will interfere with
enforcement of this section. If the statement referred to in Subsection (1)(a) is otherwise filed,
this Subsection (1)(d) does not apply.
(e) With respect to a transaction subject to this section, the acquiring person shall also
file a pre-acquisition notification with the commissioner, which shall contain the information
set forth in Section 
31A-16-104.5
. A failure to file the notification may be subject to penalties
specified in Section 
31A-16-104.5
.
[
(d)
] 
(f)
 (i) For purposes of this section, a domestic insurer includes any person
controlling a domestic insurer unless the person as determined by the commissioner is either
directly or through its affiliates primarily engaged in business other than the business of
insurance.
(ii) The controlling person described in Subsection (1)[
(d)
]
(f)
(i) shall file with the
commissioner a preacquisition notification containing the information required in Subsection
(2) 30 calendar days before the proposed effective date of the acquisition.
(iii) For the purposes of this section, "person" does not include any securities broker
that in the usual and customary brokers function holds less than 20% of:
(A) the voting securities of an insurance company; or
(B) any person that controls an insurance company.
(iv) This section applies to all domestic insurers and other entities licensed under
[
Chapters 5, 7, 8, 9, and 11.
]
:
(A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(B) Chapter 7, Nonprofit Health Service Insurance Corporations;
(C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
(D) Chapter 9, Insurance Fraternals; and
(E) Chapter 11, Motor Clubs.
[
(e)
] 
(g)
 (i) An agreement for acquisition of control or merger as contemplated by this
Subsection (1) is not valid or enforceable unless the agreement:
(A) is in writing; and
(B) includes a provision that the agreement is subject to the approval of the
commissioner upon the filing of any applicable statement required under this chapter.
(ii) A written agreement for acquisition or control that includes the provision described
in Subsection (1)[
(e)
]
(g)
(i) satisfies the requirements of this Subsection (1).
(2) The statement to be filed with the commissioner under Subsection (1) shall be
made under oath or affirmation and shall contain the following information:
(a) the name and address of the "acquiring party," which means each person by whom
or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
be effected; and
(i) if the person is an individual:
(A) the person's principal occupation;
(B) a listing of all offices and positions held by the person during the past five years;
and
(C) any conviction of crimes other than minor traffic violations during the past 10
years; and
(ii) if the person is not an individual:
(A) a report of the nature of its business operations during:
(I) the past five years; or
(II) for any lesser period as the person and any of its predecessors has been in
existence;
(B) an informative description of the business intended to be done by the person and
the person's subsidiaries;
(C) a list of all individuals who are or who have been selected to become directors or
executive officers of the person, or individuals who perform, or who will perform functions
appropriate to such positions; and
(D) for each individual described in Subsection (2)(a)(ii)(C), the information required
by Subsection (2)(a)(i) for each individual;
(b) (i) the source, nature, and amount of the consideration used or to be used in
effecting the merger or acquisition of control;
(ii) a description of any transaction in which funds were or are to be obtained for the
purpose of effecting the merger or acquisition of control, including any pledge of:
(A) the insurer's stock; or
(B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
(iii) the identity of persons furnishing the consideration;
(c) (i) fully audited financial information, or other financial information considered
acceptable by the commissioner, of the earnings and financial condition of each acquiring party
for:
(A) the preceding five fiscal years of each acquiring party; or
(B) any lesser period the acquiring party and any of its predecessors shall have been in
existence; and
(ii) unaudited information:
(A) similar to the information described in Subsection (2)(c)(i); and
(B) prepared within the 90 days prior to the filing of the statement;
(d) any plans or proposals which each acquiring party may have to:
(i) liquidate the insurer;
(ii) sell its assets;
(iii) merge or consolidate the insurer with any person; or
(iv) make any other material change in the insurer's:
(A) business;
(B) corporate structure; or
(C) management;
(e) (i) the number of shares of any security referred to in Subsection (1) that each
acquiring party proposes to acquire;
(ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
Subsection (1); and
(iii) a statement as to the method by which the fairness of the proposal was arrived at;
(f) the amount of each class of any security referred to in Subsection (1) that:
(i) is beneficially owned; or
(ii) concerning which there is a right to acquire beneficial ownership by each acquiring
party;
(g) a full description of any contract, arrangement, or understanding with respect to any
security referred to in Subsection (1) in which any acquiring party is involved, including:
(i) the transfer of any of the securities;
(ii) joint ventures;
(iii) loan or option arrangements;
(iv) puts or calls;
(v) guarantees of loans;
(vi) guarantees against loss or guarantees of profits;
(vii) division of losses or profits; or
(viii) the giving or withholding of proxies;
(h) a description of the purchase by any acquiring party of any security referred to in
Subsection (1) during the 12 calendar months preceding the filing of the statement including:
(i) the dates of purchase;
(ii) the names of the purchasers; and
(iii) the consideration paid or agreed to be paid for the purchase;
(i) a description of:
(i) any recommendations to purchase by any acquiring party any security referred to in
Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
(ii) any recommendations made by anyone based upon interviews or at the suggestion
of the acquiring party;
(j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
and
(ii) if distributed, copies of additional soliciting material relating to the transactions
described in Subsection (2)(j)(i);
(k) (i) the term of any agreement, contract, or understanding made with, or proposed to
be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
tender; and
(ii) the amount of any fees, commissions, or other compensation to be paid to
broker-dealers with regard to any agreement, contract, or understanding described in
Subsection (2)(k)(i); [
and
]
(l) an agreement by the person required to file the statement referred to in Subsection
(1) that it will provide the annual report, specified in Section 
31A-16-105
, for so long as
control exists;
(m) an acknowledgment by the person required to file the statement referred to in
Subsection (1) that the person and all subsidiaries within its control in the insurance holding
company system will provide information to the commissioner upon request as necessary to
evaluate enterprise risk to the insurer; and
[
(l)
] 
(n)
 any additional information the commissioner requires by rule, which the
commissioner determines to be:
(i) necessary or appropriate for the protection of policyholders of the insurer; or
(ii) in the public interest.
(3) The department may request:
(a) (i) criminal background information maintained pursuant to Title 53, Chapter 10,
Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
(ii) complete Federal Bureau of Investigation criminal background checks through the
national criminal history system.
(b) Information obtained by the department from the review of criminal history records
received under Subsection (3)(a) shall be used by the department for the purpose of:
(i) verifying the information in Subsection (2)(a)(i);
(ii) determining the integrity of persons who would control the operation of an insurer;
and
(iii) preventing persons who violate 18 U.S.C. Sec. 1033 from engaging in the business
of insurance in the state.
(c) If the department requests the criminal background information, the department
shall:
(i) pay to the Department of Public Safety the costs incurred by the Department of
Public Safety in providing the department criminal background information under Subsection
(3)(a)(i);
(ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
of Investigation in providing the department criminal background information under
Subsection (3)(a)(ii); and
(iii) charge the person required to file the statement referred to in Subsection (1) a fee
equal to the aggregate of Subsections (3)(c)(i) and (ii).
(4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
the lender's ordinary course of business, the identity of the lender shall remain confidential, if
the person filing the statement so requests.
(b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
adjusted book value assigned by the acquiring party to each security in arriving at the terms of
the offer.
(ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
proportional interest in the capital and surplus of the insurer with adjustments that reflect:
(A) market conditions;
(B) business in force; and
(C) other intangible assets or liabilities of the insurer.
(c) The description required by Subsection (2)(g) shall identify the persons with whom
the contracts, arrangements, or understandings have been entered into.
(5) (a) If the person required to file the statement referred to in Subsection (1) is a
partnership, limited partnership, syndicate, or other group, the commissioner may require that
all the information called for by [
Subsections
] 
Subsection
 (2), (3), or (4) shall be given with
respect to each:
(i) partner of the partnership or limited partnership;
(ii) member of the syndicate or group; and
(iii) person who controls the partner or member.
(b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
or if the person required to file the statement referred to in Subsection (1) is a corporation, the
commissioner may require that the information called for by Subsection (2) shall be given with
respect to:
(i) the corporation;
(ii) each officer and director of the corporation; and
(iii) each person who is directly or indirectly the beneficial owner of more than 10% of
the outstanding voting securities of the corporation.
(6) If any material change occurs in the facts set forth in the statement filed with the
commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
the change, together with copies of all documents and other material relevant to the change,
shall be filed with the commissioner and sent to the insurer within two business days after the
filing person learns of such change.
(7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
(1) is proposed to be made by means of a registration statement under the Securities Act of
1933, or under circumstances requiring the disclosure of similar information under the
Securities Exchange Act of 1934, or under a state law requiring similar registration or
disclosure, a person required to file the statement referred to in Subsection (1) may use copies
of any registration or disclosure documents in furnishing the information called for by the
statement.
(8) (a) The commissioner shall approve any merger or other acquisition of control
referred to in Subsection (1) unless, after a public hearing on the merger or acquisition, the
commissioner finds that:
(i) after the change of control, the domestic insurer referred to in Subsection (1) would
not be able to satisfy the requirements for the issuance of a license to write the line or lines of
insurance for which it is presently licensed;
(ii) the effect of the merger or other acquisition of control would:
(A) substantially lessen competition in insurance in this state; or
(B) tend to create a monopoly in insurance;
(iii) the financial condition of any acquiring party might:
(A) jeopardize the financial stability of the insurer; or
(B) prejudice the interest of:
(I) its policyholders; or
(II) any remaining securityholders who are unaffiliated with the acquiring party;
(iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
(v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
assets, or consolidate or merge it with any person, or to make any other material change in its
business or corporate structure or management, are:
(A) unfair and unreasonable to policyholders of the insurer; and
(B) not in the public interest; or
(vi) the competence, experience, and integrity of those persons who would control the
operation of the insurer are such that it would not be in the interest of the policyholders of the
insurer and the public to permit the merger or other acquisition of control.
(b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
be considered unfair if the adjusted book values under Subsection (2)(e):
(i) are disclosed to the securityholders; and
(ii) determined by the commissioner to be reasonable.
(9) (a) The public hearing referred to in Subsection (8) shall be held within 30 days
after the statement required by Subsection (1) is filed.
(b) (i) At least 20 days notice of the hearing shall be given by the commissioner to the
person filing the statement.
(ii) Affected parties may waive the notice required by this Subsection (9)(b).
(iii) Not less than seven days notice of the public hearing shall be given by the person
filing the statement to:
(A) the insurer; and
(B) any person designated by the commissioner.
(c) The commissioner shall make a determination within 30 days after the conclusion
of the hearing.
(d) At the hearing, the person filing the statement, the insurer, any person to whom
notice of hearing was sent, and any other person whose interest may be affected by the hearing
may:
(i) present evidence;
(ii) examine and cross-examine witnesses; and
(iii) offer oral and written arguments.
(e) (i) A person or insurer described in Subsection (9)(d) may conduct discovery
proceedings in the same manner as is presently allowed in the district courts of this state.
(ii) All discovery proceedings shall be concluded not later than three days before the
commencement of the public hearing.
(10) If the proposed acquisition of control will require the approval of more than one
commissioner, the public hearing referred to in Subsection (9)(a) may be held on a
consolidated basis upon request of the person filing the statement referred to in Subsection (1). 
The person shall file the statement referred to in Subsection (1) with the National Association
of Insurance Commissioners within five days of making the request for a public hearing. A
commissioner may opt out of a consolidated hearing and shall provide notice to the applicant of
the opt-out within 10 days of the receipt of the statement referred to in Subsection (1). A
hearing conducted on a consolidated basis shall be public and shall be held within the United
States before the commissioners of the states in which the insurers are domiciled. The
commissioners shall hear and receive evidence. A commissioner may attend a hearing under
this Subsection (10) in person or by telecommunication.
(11) In connection with a change of control of a domestic insurer, any determination by
the commissioner that the person acquiring control of the insurer shall be required to maintain
or restore the capital of the insurer to the level required by the laws and regulations of this state
shall be made not later than 60 days after the date of notification of the change in control
submitted pursuant to Subsection (1).
[
(10)
] 
(12)
 (a) The commissioner may retain technical experts to assist in reviewing all,
or a portion of, information filed in connection with a proposed merger or other acquisition of
control referred to in Subsection (1).
(b) In determining whether any of the conditions in Subsection (8) exist, the
commissioner may consider the findings of technical experts employed to review applicable
filings.
(c) (i) A technical expert employed under Subsection [
(10)
] 
(12)
(a) shall present to the
commissioner a statement of all expenses incurred by the technical expert in conjunction with
the technical expert's review of a proposed merger or other acquisition of control.
(ii) At the commissioner's direction the acquiring person shall compensate the technical
expert at customary rates for time and expenses:
(A) necessarily incurred; and
(B) approved by the commissioner.
(iii) The acquiring person shall:
(A) certify the consolidated account of all charges and expenses incurred for the review
by technical experts;
(B) retain a copy of the consolidated account described in Subsection [
(10)
]
(12)
(c)(iii)(A); and
(C) file with the department as a public record a copy of the consolidated account
described in Subsection [
(10)
] 
(12)
(c)(iii)(A).
[
(11)
] 
(13)
 (a) (i) If a domestic insurer proposes to merge into another insurer, any
securityholder electing to exercise a right of dissent may file with the insurer a written request
for payment of the adjusted book value given in the statement required by Subsection (1) and
approved under Subsection (8), in return for the surrender of the security holder's securities.
(ii) The request described in Subsection [
(11)
] 
(13)
(a)(i) shall be filed not later than 10
days after the day of the securityholders' meeting where the corporate action is approved.
(b) The dissenting securityholder is entitled to and the insurer is required to pay to the
dissenting securityholder the specified value within 60 days of receipt of the dissenting security
holder's security.
(c) Persons electing under this Subsection [
(11)
] 
(13)
 to receive cash for their securities
waive the dissenting shareholder and appraisal rights otherwise applicable under Title 16,
Chapter 10a, Part 13, Dissenters' Rights.
(d) (i) This Subsection [
(11)
] 
(13)
 provides an elective procedure for dissenting
securityholders to resolve their objections to the plan of merger.
(ii) This section does not restrict the rights of dissenting securityholders under Title 16,
Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
Subsection [
(11)
] 
(13)
.
[
(12)
] 
(14)
 (a) All statements, amendments, or other material filed under Subsection
(1), and all notices of public hearings held under Subsection (8), shall be mailed by the insurer
to its securityholders within five business days after the insurer has received the statements,
amendments, other material, or notices.
(b) (i) Mailing expenses shall be paid by the person making the filing.
(ii) As security for the payment of mailing expenses, that person shall file with the
commissioner an acceptable bond or other deposit in an amount determined by the
commissioner.
[
(13)
] 
(15)
 This section does not apply to any offer, request, invitation, agreement, or
acquisition that the commissioner by order exempts from the requirements of this section as:
(a) not having been made or entered into for the purpose of, and not having the effect
of, changing or influencing the control of a domestic insurer; or
(b) otherwise not comprehended within the purposes of this section.
[
(14)
] 
(16)
 The following are violations of this section:
(a) the failure to file any statement, amendment, or other material required to be filed
pursuant to Subsections (1), (2), and (5); or
(b) the effectuation, or any attempt to effectuate, an acquisition of control of
,
divestiture of,
 or merger with a domestic insurer unless the commissioner has given the
commissioner's approval to the acquisition or merger.
[
(15)
] 
(17)
 (a) The courts of this state are vested with jurisdiction over:
(i) a person who:
(A) files a statement with the commissioner under this section; and
(B) is not resident, domiciled, or authorized to do business in this state; and
(ii) overall actions involving persons described in Subsection [
(15)
] 
(17)
(a)(i) arising
out of a violation of this section.
(b) A person described in Subsection [
(15)
] 
(17)
(a) is considered to have performed
acts equivalent to and constituting an appointment of the commissioner by that person, to be
that person's lawful agent upon whom may be served all lawful process in any action, suit, or
proceeding arising out of a violation of this section.
(c) A copy of a lawful process described in Subsection [
(15)
] 
(17)
(b) shall be:
(i) served on the commissioner; and
(ii) transmitted by registered or certified mail by the commissioner to the person at that
person's last-known address.
Section 10. Section 
31A-16-104.5
 is enacted to read:
 31A-16-104.5.
Acquisitions involving insurers not otherwise covered.
(1) The following definitions apply for the purposes of this section only:
(a) "Acquisition" means an agreement, arrangement, or activity the consummation of
which results in a person acquiring directly or indirectly the control of another person and
includes the acquisition of voting securities, the acquisition of assets, bulk reinsurance, and
mergers.
(b) "Insurer" includes any company or group of companies under common
management, ownership, or control.
(c) "Involved insurer" includes an insurer that either acquires or is acquired, is
affiliated with an acquirer or acquired, or is the result of a merger.
(d) (i) "Market" means the relevant product and geographical markets. In determining
the relevant product and geographical markets, the commissioner shall give due consideration
to, among other things, the definitions or guidelines, if any, promulgated by the National
Association of Insurance Commissioners and to information, if any, submitted by parties to the
acquisition. In the absence of sufficient information to the contrary, the relevant product
market is assumed to be the direct written insurance premium for a line of business, such line
being that used in the annual statement required to be filed by insurers doing business in this
state, and the relevant geographical market is assumed to be this state.
(ii) Notwithstanding Subsection (1)(d)(i), for purposes of Subsection (2)(b), "market"
means direct written insurance premium in this state for a line of business as contained in the
annual statement required to be filed by insurers licensed to do business in this state.
(2) (a) This section applies to any acquisition in which there is a change in control of
an insurer authorized to do business in Utah.
(b) This section does not apply to the following:
(i) securities purchased solely for investment purposes so long as the securities are not
used by voting or otherwise to cause or attempt to cause the substantial lessening of
competition in any insurance market in this state;
(ii) if a purchase of securities results in a presumption of control under Subsection
31A-1-301
(29)(d), it is not solely for investment purposes unless the commissioner of the
insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control
does not exist and the disclaimer action or affirmative finding is communicated by the
domiciliary commissioner to the commissioner of this state;
(iii) the acquisition of a person by another person when both persons are neither
directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition
notification is filed with the commissioner in accordance with Subsection (3)(a) 30 days before
the proposed effective date of the acquisition;
(iv) the acquisition of an already affiliated person;
(v) an acquisition if, as an immediate result of the acquisition:
(A) in no market would the combined market share of the involved insurers exceed 5%
of the total market;
(B) there would be no increase in any market share; or
(C) in no market would the combined market share of the involved insurers exceeds
12% of the total market, and the market share increase by more than 2% of the total market;
(vi) an acquisition for which a pre-acquisition notification would be required pursuant
to this section due solely to the resulting effect on the ocean marine insurance line of business;
or
(vii) an acquisition of an insurer whose domiciliary commissioner affirmatively finds
that the insurer is in failing condition, and:
(A) there is a lack of feasible alternative to improving such condition;
(B) the public benefits of improving the insurer's condition through the acquisition
exceed the public benefits that would arise from not lessening competition; and
(C) the findings are communicated by the domiciliary commissioner to the
commissioner of this state.
(3) An acquisition covered by Subsection (2) may be subject to an order pursuant to
Subsection (5) unless the acquiring person files a pre-acquisition notification and the waiting
period has expired. The acquired person may file a pre-acquisition notification. The
commissioner shall give confidential treatment to information submitted under this Subsection
(3) in the same manner as provided in Section 
31A-16-109
.
(a) The pre-acquisition notification shall be in the form and contain such information
as prescribed by the National Association of Insurance Commissioners relating to those
markets that, under Subsection (2)(b)(v), cause the acquisition not to be exempted from this
section. The commissioner may require additional material and information as considered
necessary to determine whether the proposed acquisition, if consummated, would violate the
competitive standard of Subsection (4). The required information may include an opinion of an
economist as to the competitive impact of the acquisition in this state accompanied by a
summary of the education and experience of the economist indicating the economist's ability to
render an informed opinion.
(b) The waiting period required shall begin on the date of receipt of the commissioner
of a pre-acquisition notification and shall end on the earlier of the 30th day after the date of
receipt, or termination of the waiting period by the commissioner. Before the end of the
waiting period, the commissioner on a one-time basis may require the submission of additional
needed information relevant to the proposed acquisition, in which event the waiting period
shall end on the earlier of the 30th day after receipt of the additional information by the
commissioner or termination of the waiting period by the commissioner.
(4) (a) The commissioner may enter an order under Subsection (5)(a) with respect to an
acquisition if there is substantial evidence that the effect of the acquisition may be substantially
to lessen competition in any line of insurance in this state, tend to create a monopoly, or if the
insurer fails to file adequate information in compliance with this section.
(b) In determining whether a proposed acquisition would violate the competitive
standard of Subsection (4)(a), the commissioner shall consider the following:
(i) Any acquisition covered under this Subsection (4) involving two or more insurers
competing in the same market is prima facie evidence of violation of the competitive standards
if:
(A) the market is highly concentrated and the involved insurers possess the following
shares of the market:
Insurer A
Insurer B
4%
4% or more
10%
2% or more
15%
1% or more; or
(B) the market is not highly concentrated and the involved insurers possess the
following shares of the market:
Insurer A
Insurer B
5%
5% or more
10%
4% or more
15%
3% or more
19%
1% or more.
(ii) For purposes of this section, a highly concentrated market is one in which the share
of the four largest insurers is 75% or more of the market. Percentages not shown in the tables
are interpolated proportionately to the percentages that are shown. If more than two insurers
are involved, exceeding the total of the two columns in the table is prima facie evidence of
violation of the competitive standard in Subsection (4)(a).
(iii) For purposes of this section, the insurer with the largest share of the market shall
be considered to be Insurer A.
(c) There is a significant trend toward increased concentration when the aggregate
market share of any grouping of the largest insurers in the market, from the two largest to the
eight largest, has increased by 7% or more of the market over a period of time extending from
any base year 5 to 10 years before the acquisition up to the time of the acquisition. Any
acquisition or merger covered under Subsection (1) involving two or more insurers competing
in the same market is prima facie evidence of violation of the competitive standard in
Subsection (4)(a) if:
(i) there is a significant trend toward increased concentration in the market;
(ii) one of the insurers involved is one of the insurers in a grouping of large insurers
showing the requisite increase in the market share; and
(iii) another involved insurer's market is 2% or more.
(d) The burden of showing prima facie evidence of violation of the competitive
standard rests upon the commissioner.
(e) Even though an acquisition is not prima facie violative of the competitive standard
under Subsections (4)(b) and (4)(c), the commissioner may establish the requisite
anticompetitive effect based upon other substantial evidence.
(f) Even though an acquisition is prima facie violative of the competitive standard
under Subsections (4)(b) and (4)(c), a party may establish the absence of the requisite
anticompetitive effect based upon other substantial evidence. Relevant factors in making a
determination under this Subsection (4)(f) include the following:
(i) market shares;
(ii) volatility of ranking of market leaders;
(iii) number of competitors;
(iv) concentration or trend of concentration in the industry; and
(v) ease of entry and exit into the market.
(g) An order may not be entered under Subsection (5) if:
(i) the acquisition will yield substantial economies of scale or economies in resource
use that cannot be feasibly achieved in any other way, and the public benefits that would arise
from the economies exceed the public benefits that would arise from not lessening competition;
or
(ii) the acquisition will substantially increase the availability of insurance, and the
public benefits of the increase exceed the public benefits that would arise from not lessening
competition.
(5) (a) Subject to Title 63G, Chapter 4, Administrative Procedures Act, if an
acquisition violates the standards of this section, the commissioner may enter an order:
(i) requiring an involved insurer to cease and desist from doing business in this state
with respect to the line or lines of insurance involved in the violation; or
(ii) denying the application of an acquired or acquiring insurer for a license to do
business in this state.
(b) The commissioner shall accompany an order issued under this Subsection (5) with
a written decision of the commissioner setting forth findings of fact and conclusions of law.
(c) An order pursuant to this section may not apply if the acquisition is not
consummated.
(d) A person who violates a cease and desist order of the commissioner under
Subsection (5)(a)(i) and while the order is in effect may after notice and hearing and upon order
of the commissioner be subject at the discretion of the commissioner to one or more of the
following:
(i) notwithstanding Section 
31A-2-308
, a monetary penalty of not more than $10,000
for every day of violation; or
(ii) suspension or revocation of the person's license.
(e) An insurer or other person who fails to make any filing required by this section, and
who fails to demonstrate a good faith effort to comply with a filing requirement, is subject to a
fine of not more than $50,000 notwithstanding Section 
31A-2-308
.
Section 11. Section 
31A-16-105
 is amended to read:
31A-16-105.
Registration of insurers.
(1) (a) [
Every
] 
An
 insurer [
which
] 
that
 is authorized to do business in this state and
[
which
] 
that
 is a member of an insurance holding company system shall register with the
commissioner, except a foreign insurer subject to registration requirements and standards
adopted by statute or regulation in the jurisdiction of its domicile, if the requirements and
standards are substantially similar to those contained in this section, Subsections
31A-16-106
(1)(a) and (2) and either Subsection 
31A-16-106
(1)(b) or a statutory provision
similar to the following: "Each registered insurer shall keep current the information required to
be disclosed in its registration statement by reporting all material changes or additions within
15 days after the end of the month in which it learns of each change or addition."
(b) [
Any
] 
An
 insurer [
which
] 
that
 is subject to registration under this section shall
register within 15 days after it becomes subject to registration, and annually thereafter by May
1 of each year for the previous calendar year, unless the commissioner for good cause extends
the time for registration and then at the end of the extended time period. The commissioner
may require any insurer authorized to do business in the state, which is a member of a holding
company system, and which is not subject to registration under this section, to furnish a copy of
the registration statement, the summary specified in Subsection (3), or any other information
filed by the insurer with the insurance regulatory authority of domiciliary jurisdiction.
(2) [
Every
] 
An
 insurer subject to registration shall file the registration statement 
with
the commissioner
 on a form 
and in a format
 prescribed by the National Association of
Insurance Commissioners, which shall contain the following current information:
(a) the capital structure, general financial condition, and ownership and management of
the insurer and any person controlling the insurer;
(b) the identity and relationship of every member of the insurance holding company
system;
(c) any of the following agreements in force, and transactions currently outstanding or
which have occurred during the last calendar year between the insurer and its affiliates:
(i) loans, other investments, or purchases, sales or exchanges of securities of the
affiliates by the insurer or of securities of the insurer by its affiliates;
(ii) purchases, sales, or exchanges of assets;
(iii) transactions not in the ordinary course of business;
(iv) guarantees or undertakings for the benefit of an affiliate which result in an actual
contingent exposure of the insurer's assets to liability, other than insurance contracts entered
into in the ordinary course of the insurer's business;
(v) all management agreements, service contracts, and all cost-sharing arrangements;
(vi) reinsurance agreements;
(vii) dividends and other distributions to shareholders; and
(viii) consolidated tax allocation agreements;
(d) any pledge of the insurer's stock, including stock of any subsidiary or controlling
affiliate, for a loan made to any member of the insurance holding company system; [
and
]
(e) if requested by the commissioner, financial statements of or within an insurance
holding company system, including all affiliates:
(i) which may include annual audited financial statements filed with the United States
Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended; and
(ii) which request is satisfied by providing the commissioner with the most recently
filed parent corporation financial statements that have been filed with the United States
Securities and Exchange Commission;
[
(e)
] 
(f)
 any other matters concerning transactions between registered insurers and any
affiliates as may be included in any subsequent registration forms adopted or approved by the
commissioner[
.
]
;
(g) statements that the insurer's board of directors oversees corporate governance and
internal controls and that the insurer's officers or senior management have approved,
implemented, and continue to maintain and monitor corporate governance and internal control
procedures; and
(h) any other information required by rule made by the commissioner in accordance
with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(3) All registration statements shall contain a summary outlining all items in the
current registration statement representing changes from the prior registration statement.
(4) No information need be disclosed on the registration statement filed pursuant to
Subsection (2) if the information is not material for the purposes of this section. Unless the
commissioner by rule or order provides otherwise, sales, purchases, exchanges, loans or
extensions of credit, investments, or guarantees involving one-half of 1%, or less, of an
insurer's admitted assets as of the next preceding December 31 may not be considered material
for purposes of this section.
(5) Subject to Section 
31A-16-106
, each registered insurer shall report to the
commissioner a dividend or other distribution to shareholders within 15 business days
following the declaration of the dividend or distribution.
[
(5)
] 
(6)
 Any person within an insurance holding company system subject to
registration shall provide complete and accurate information to an insurer if the information is
reasonably necessary to enable the insurer to comply with the provisions of this chapter.
[
(6)
] 
(7)
 The commissioner shall terminate the registration of any insurer which
demonstrates that it no longer is a member of an insurance holding company system.
[
(7)
] 
(8)
 The commissioner may require or allow two or more affiliated insurers subject
to registration under this section to file a consolidated registration statement.
[
(8)
] 
(9)
 The commissioner may allow an insurer which is authorized to do business in
this state, and which is part of an insurance holding company system, to register on behalf of
any affiliated insurer which is required to register under Subsection (1) and to file all
information and material required to be filed under this section.
[
(9) The provisions of this
] 
(10) This
 section [
do
] 
does
 not apply to any insurer,
information, or transaction if, and to the extent that, the commissioner by rule or order exempts
the insurer from [
the provisions of
] this section.
[
(10)
] 
(11)
 Any person may file with the commissioner a disclaimer of affiliation with
any authorized insurer, or a disclaimer of affiliation may be filed by any insurer or any member
of an insurance holding company system. The disclaimer shall fully disclose all material
relationships and bases for affiliation between the person and the insurer as well as the basis for
disclaiming the affiliation. [
After a disclaimer has been filed, the insurer shall be relieved of
any duty to register or report under this section which may arise out of the insurer's relationship
with the person unless and until the commissioner disallows the disclaimer. The commissioner
shall disallow a disclaimer only after furnishing all parties in interest with notice and
opportunity to be heard, and after making specific findings of fact to support the disallowance.
]
A disclaimer of affiliation is considered to have been granted unless the commissioner, within
days following receipt of a complete disclaimer, notifies the filing party the disclaimer is
disallowed. If disallowed, the disclaiming party may request an administrative hearing, which
shall be granted. The disclaiming party shall be relieved of its duty to register under this
section if approval of the disclaimer is granted by the commissioner, or if the disclaimer is
considered to have been approved.
(12) The ultimate controlling person of an insurer subject to registration shall also file
an annual enterprise risk report. The annual enterprise risk report shall, to the best of the
ultimate controlling person's knowledge and belief, identify the material risks within the
insurance holding company that could pose enterprise risk to the insurer. The annual enterprise
risk report shall be filed with the lead state commissioner of the insurance holding company
system as determined by the procedures within the Financial Analysis Handbook adopted by
the National Association of Insurance Commissioners.
[
(11)
] 
(13)
 The failure to file a registration statement or any summary of the
registration statement 
or enterprise risk filing
 required by this section within the time specified
for the filing is a violation of this section.
Section 12. Section 
31A-16-106
 is amended to read:
31A-16-106.
Standards and management of an insurer within a holding company
system.
(1) (a) Transactions within [
a
] 
an insurance
 holding company system to which an
insurer subject to registration is a party are subject to the following standards:
(i) the terms shall be fair and reasonable;
(ii) agreements for cost sharing services and management shall include the provisions
required by rule made by the commissioner in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act;
[
(ii)
] 
(iii)
 charges or fees for services performed shall be reasonable;
[
(iii)
] 
(iv)
 expenses incurred and payment received shall be allocated to the insurer in
conformity with customary insurance accounting practices consistently applied;
[
(iv)
] 
(v)
 the books, accounts, and records of each party to all transactions shall be so
maintained as to clearly and accurately disclose the nature and details of the transactions,
including the accounting information necessary to support the reasonableness of the charges or
fees to the respective parties; and
[
(v)
] 
(vi)
 the insurer's surplus held for policyholders, following any dividends or
distributions to shareholder affiliates, shall be reasonable in relation to the insurer's outstanding
liabilities and shall be adequate to its financial needs.
(b) The following transactions involving a domestic insurer and any person in its
insurance
 holding company system
, including amendments or modifications of affiliate
agreements previously filed pursuant to this section, which are subject to any materiality
standards contained in Subsections (1)(a)(i) through (vi),
 may not be entered into unless the
insurer has notified the commissioner in writing of its intention to enter into the transaction at
least 30 days [
prior to
] 
before
 entering into the transaction, or within any shorter period the
commissioner may permit, if the commissioner has not disapproved the transaction within the
period[
:
]
. The notice for an amendment or modification shall include the reasons for the change
and financial impact on the domestic insurer. Informal notice shall be reported, within 30 days
after a termination of a previously filed agreement, to the commissioner for determination of
the type of filing required, if any:
(i) sales, purchases, exchanges, loans or extensions of credit, guarantees, or
investments if the transactions are equal to, or exceed as of the next preceding December 31:
(A) for nonlife insurers, the lesser of 3% of the insurer's admitted assets or 25% of
surplus held for policyholders;
(B) for life insurers, 3% of the insurer's admitted assets;
(ii) loans or extensions of credit made to any person who is not an affiliate, if the
insurer makes the loans or extensions of credit with the agreement or understanding that the
proceeds of the transactions, in whole or in substantial part, are to be used to make loans or
extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the
insurer making the loans or extensions of credit if the transactions are equal to, or exceed as of
the next preceding December 31:
(A) for nonlife insurers, the lesser of 3% of the insurer's admitted assets or 25% of
surplus held for policyholders;
(B) for life insurers, 3% of the insurer's admitted assets;
(iii) reinsurance agreements or modifications to reinsurance agreements [
in which the
reinsurance premium or a change in the insurer's liabilities equals or exceeds 5% of the
insurer's surplus held for policyholders, as of the next preceding December 31, including those
agreements which may require as consideration the transfer of assets from an insurer to a
nonaffiliate, if an agreement or understanding exists between the insurer and the nonaffiliate
that any portion of the assets will be transferred to one or more affiliates of the insurer;
]
,
including an agreement in which the reinsurance premium, a change in the insurer's liabilities,
or the projected reinsurance premium or a change in the insurer's liabilities in any of the current
and succeeding three years, equals or exceeds 5% of the insurer's surplus held for
policyholders, as of the next preceding December 31, including those agreements that may
require as consideration the transfer of assets from an insurer to a non-affiliate, if an agreement
or understanding exists between the insurer and the non-affiliate that any portion of the assets
will be transferred to one or more affiliates of the reinsurer;
(iv) all management agreements, service contracts, 
tax allocation agreements,
 and all
cost-sharing arrangements;
(v) guarantees when made by a domestic insurer, except that:
(A) a guarantee that is quantifiable as to amount is not subject to the notice
requirements of this Subsection (1) unless it exceeds the lesser of .5% of the insurer's admitted
assets or 10% of surplus held for policyholders, as of the next preceding December 31; and
(B) a guarantee that is not quantifiable as to amount is subject to the notice
requirements of this Subsection (1);
(vi) direct or indirect acquisitions or investments in a person that controls the insurer or
in an affiliate of the insurer in an amount that, together with its present holdings in the
investments, exceeds 2.5% of the insurer's surplus to policyholders, except that a direct or
indirect acquisition or investment in a subsidiary acquired pursuant to Section 
31A-16-102.5
,
or in a non-subsidiary insurance affiliate that is subject to this chapter, is exempt from this
Subsection (1)(b)(vi);
[
(v)
] 
(vii)
 any material transactions, specified by rule, which the commissioner
determines may adversely affect the interests of the insurer's policyholders; and
[
(vi) this subsection
] 
(viii) this Subsection (1)
 may not be interpreted to authorize or
permit any transactions which would be otherwise contrary to law in the case of an insurer not
a member of the same holding company system.
(c) A domestic insurer may not enter into transactions which are part of a plan or series
of like transactions with persons within the holding company system if the purpose of the
separate transactions is to avoid the statutory threshold amount and thus to avoid the review by
the commissioner that would occur otherwise. If the commissioner determines that the
separate transactions were entered into over any 12 month period for such a purpose, [
he
] 
the
commissioner
 may exercise [
his
] 
the commissioner's
 authority under Section 
31A-16-110
.
(d) The commissioner, in reviewing transactions pursuant to Subsection (1)(b), shall
consider whether the transactions comply with the standards set forth in Subsection (1)(a) and
whether they may adversely affect the interests of policyholders.
(e) The commissioner shall be notified within 30 days of any investment of the
domestic insurer in any one corporation, if the total investment in the corporation by the
insurance holding company system exceeds 10% of the corporation's voting securities.
(2) (a) A domestic insurer may not pay any extraordinary dividend or make any other
extraordinary distribution to its shareholders until:
(i) 30 days after the commissioner has received notice of the declaration of the
dividend and has not within the 30-day period disapproved the payment; or
(ii) the commissioner has approved the payment within the 30-day period.
(b) For purposes of this [
subsection
] 
Subsection (2)
, an extraordinary dividend or
distribution includes any dividend or distribution of cash or other property, fair market value of
which, together with that of other dividends or distributions made within the preceding 12
months, exceeds the lesser of:
(i) 10% of the insurer's surplus held for policyholders as of the next preceding
December 31; [
or
]
(ii) the net gain from operations of the insurer, if the insurer is a life insurer, or the net
income, if the insurer is not a life insurer, not including realized capital gains, for the 12-month
period ending the next preceding December 31; 
or
(iii) an extraordinary dividend does not include pro rata distributions of any class of the
insurer's own securities.
(c) In determining whether a dividend or distribution is extraordinary, an insurer other
than a life insurer may carry forward net income from the previous two calendar years that has
not already been paid out as dividends. This carry-forward shall be computed by taking the net
income from the second and third preceding calendar years, not including realized capital
gains, less dividends paid in the second and immediate preceding calendar years.
(d) Notwithstanding any other provision of law, an insurer may declare an
extraordinary dividend or distribution, which is conditioned upon the commissioner's approval
of the dividend or distribution, and the declaration shall confer no rights upon shareholders
until:
(i) the commissioner has approved the payment of the dividend or distribution; or
(ii) the commissioner has not disapproved the payment within the 30-day period
referred to in Subsection (2)(a).
(3) (a) Notwithstanding the control of a domestic insurer by any person, the officers
and directors of the insurer may not be relieved of any obligation or liability to which they
would otherwise be subject by law, and the insurer shall be managed so as to assure its separate
operating identity consistent with this chapter.
(b) Nothing in this section precludes a domestic insurer from having or sharing a
common management or cooperative or joint use of personnel, property, or services with one or
more other persons under arrangements meeting the standards of Subsection (1)(a).
(c) (i) Not less than one-third of the directors of a domestic insurer, and not less than
one-third of the members of each committee of the board of directors of a domestic insurer,
shall be persons who are not officers or employees of the insurer or of any entity controlling,
controlled by, or under common control with the insurer and who are not beneficial owners of a
controlling interest in the voting stock of the insurer or entity.
(ii) At least one person described in Subsection (3)(c)(i) shall be included in a quorum
for the transaction of business at a meeting of the board of directors or a committee of the
board of directors.
(d) Subsection (3)(c) does not apply to a domestic insurer if the person controlling the
insurer, such as an insurer, a mutual insurance holding company, or a publicly held corporation,
has a board of directors and committees of the board of directors that meet the requirements of
Subsection (3)(c) with respect to the controlling entity.
(e) An insurer may make application to the commissioner for a waiver from the
requirements of this Subsection (3) if the insurer's annual direct written and assumed premium,
excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood
Program, is less than $300,000,000. An insurer may also make application to the
commissioner for a waiver from the requirements of this Subsection (3) based upon unique
circumstances. The commissioner may consider various factors, including:
(i) the type of business entity;
(ii) the volume of business written;
(iii) the availability of qualified board members; or
(iv) the ownership or organizational structure of the entity.
(4) (a) For purposes of this chapter, in determining whether an insurer's surplus as
regards policyholders is reasonable in relation to the insurer's outstanding liabilities and
adequate to meet its financial needs, the following factors, among others, shall be considered:
(i) the size of the insurer as measured by its assets, capital and surplus, reserves,
premium writings, insurance in force, and other appropriate criteria;
(ii) the extent to which the insurer's business is diversified among several lines of
insurance;
(iii) the number and size of risks insured in each line of business;
(iv) the extent of the geographical dispersion of the insurer's insured risks;
(v) the nature and extent of the insurer's reinsurance program;
(vi) the quality, diversification, and liquidity of the insurer's investment portfolio;
(vii) the recent past and projected future trend in the size of the insurer's investment
portfolio;
(viii) the surplus as regards policyholders maintained by other comparable insurers;
(ix) the adequacy of the insurer's reserves; and
(x) the quality and liquidity of investments in affiliates.
(b) The commissioner may treat an investment described in Subsection (4)(a)(x) as a
disallowed asset for purposes of determining the adequacy of surplus as regards policyholders
whenever in the judgment of the commissioner the investment so warrants.
Section 13. Section 
31A-16-107.5
, which is renumbered from Section 31A-16-108 is
renumbered and amended to read:
[
31A-16-108
].
 31A-16-107.5.
Examination of registered insurers.
(1) Subject to the limitation contained in this section and the powers which the
commissioner has under Chapter 2
, Administration of the Insurance Laws,
 relating to the
examination of insurers, the commissioner has the power to [
order any
] 
examine an
 insurer
registered under Section 
31A-16-105
 [
to produce the records, books, or other informational
papers in the possession of the insurer or its affiliates which the commissioner considers
necessary
] 
and its affiliates
 to ascertain the financial condition [
or legality of conduct
] of the
insurer[
. If an insurer fails to comply with this order, the commissioner may examine the
affiliates to obtain the information.
]
, including the enterprise risk to the insurer by the ultimate
controlling party, or by the insurance holding company system on a consolidated basis.
[
(2) The commissioner shall exercise his power under Subsection (1) only if the
examination of the insurer under Chapter 2 is inadequate, or the interests of the policyholders
of the insurer may be adversely affected if the commissioner fails to exercise his power.
]
(2) (a) The commissioner may order an insurer registered under Section 
31A-16-105
 to
produce the records, books, or other information papers in the possession of the insurer or its
affiliates as are reasonably necessary to determine compliance with this chapter.
(b) To determine compliance with this chapter, the commissioner may order an insurer
registered under Section 
31A-16-105
 to produce information not in the possession of the
insurer if the insurer can obtain access to the information pursuant to contractual relationships,
statutory obligations, or other methods.
(c) If an insurer cannot obtain the information requested by the commissioner, the
insurer shall provide the commissioner a detailed explanation of the reason that the insurer
cannot obtain the information and the identity of the holder of the information.
(d) Whenever it appears to the commissioner that the detailed explanation is without
merit, the commissioner may require, after notice and hearing, the insurer to pay a penalty of
$5,000 for each day's delay, or may suspend or revoke the insurer's license.
(3) The commissioner may retain, at the registered insurer's expense, attorneys,
actuaries, accountants, and other experts not otherwise a part of the commissioner's staff, if
they are necessary to assist in the conduct of the examination under Subsection (1). Any
persons so retained are under the direction and control of the commissioner and shall act in a
purely advisory capacity.
(4) [
Each
] 
A
 registered insurer who produces records, books, and papers under
Subsection (1) for examination is liable for and shall pay the expense of the examination under
Section 
31A-2-205
.
(5) If an insurer fails to comply with an order issued under this section, the
commissioner may:
(a) examine the affiliates to obtain the information; or
(b) issue subpoenas, administer oaths, and examine under oath any person for purposes
of determining compliance with this section.
(6) Upon the failure or refusal of any person to obey a subpoena under Subsection (5),
the commissioner may petition the Third District Court of Salt Lake County to enter an order
compelling the witness to appear and testify or produce documentary evidence. A person shall
be obliged to attend as a witness at the place specified in the subpoena, when subpoenaed,
anywhere within the state. A person subpoenaed is entitled to the same fees and mileage, if
claimed, as a witness in the Third District Court of Salt Lake County, which fees, mileage, and
actual expense, if any, necessarily incurred in securing the attendance of witnesses, and their
testimony, shall be itemized and charged against, and be paid by, the company being examined.
Section 14. Section 
31A-16-108.5
 is enacted to read:
 31A-16-108.5.
Supervisory colleges.
(1) (a) For an insurer registered under Section 
31A-16-105
 and in accordance with
Subsection (3), the commissioner may participate in a supervisory college for a domestic
insurer that is part of an insurance holding company system with international operations to
determine compliance by the insurer with this chapter. The powers of the commissioner with
respect to supervisory colleges include the following:
(i) initiating the establishment of a supervisory college;
(ii) clarifying the membership and participation of other supervisors in the supervisory
college;
(iii) clarifying the functions of the supervisory college and the role of other regulators,
including the establishment of a group-wide supervisor;
(iv) coordinating the ongoing activities of the supervisory college, including:
(A) planning meetings;
(B) supervisory activities; and
(C) processes for information sharing; and
(v) establishing a crisis management plan.
(2) (a) A registered insurer subject to this section is liable for and shall pay the
reasonable expenses of the commissioner's participation in a supervisory college in accordance
with Subsection (3), including reasonable travel expenses.
(b) For purposes of this section, a supervisory college may be convened as either a
temporary or permanent forum for communication and cooperation between the regulators
charged with supervision of the insurer or its affiliates and the commissioner may establish a
regular assessment to the insurer for the payment of these expenses.
(3) (a) The commissioner may participate in a supervisory college with other regulators
charged with supervision of the insurer or its affiliates, including:
(i) other state regulatory agencies;
(ii) federal regulatory agencies; or
(iii) international regulatory agencies.
(b) The commissioner may enter into agreements in accordance with Section
31A-16-109
 providing the basis for cooperation between the commissioner and other
regulatory agencies, and the activities of the supervisory college, in order to assess:
(i) the business strategy;
(ii) financial position;
(iii) legal and regulatory position;
(iv) risk exposure; and
(v) management and governance processes.
(c) Nothing in this section shall delegate to the supervisory college the authority of the
commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.
Section 15. Section 
31A-16-109
 is amended to read:
31A-16-109.
Confidentiality of information obtained by commissioner.
[
All information
] 
(1) Information
, documents, and copies of these [
which
] 
that
 are
obtained by or disclosed to the commissioner or any other person in the course of an
examination or investigation made under Section [
31A-16-108
] 
31A-16-107.5
, and all
information reported under Section 
31A-16-105
, is confidential. It is not subject to subpoena
and may not be made public by the commissioner or any other person, except it may be
provided to the insurance departments of other states, without the prior written consent of the
insurer to which it pertains. The confidentiality of this section does not apply if the
commissioner, after giving the insurer and its affiliates who would be affected by the
disclosure, proper notice and an opportunity to be heard, and determines that the interests of
policyholders, shareholders, or the public will be served by the publication of the information. 
In this situation, the commissioner may publish all or any part of the information in any manner
[
he
] 
the commissioner
 considers appropriate.
(2) The commissioner and any person who received documents, materials, or other
information while acting under the authority of the commissioner or with whom the
documents, materials, or other information are shared pursuant to this chapter shall keep
confidential any confidential documents, materials, or information subject to Subsection (1).
(3) (a) To assist in the performance of the commissioner's duties, the commissioner:
(i) may share documents, materials, or other information, including the confidential
documents, materials, or information subject to Subsection (1), with the following if the
recipient agrees in writing to maintain the confidentiality status of the document, material, or
other information, and has verified in writing the legal authority to maintain confidentiality:
(A) other state, federal, and international regulatory agencies;
(B) the National Association of Insurance Commissioners and its affiliates and
subsidiaries; and
(C) state, federal, and international law enforcement authorities, including members of
a supervisory college described in Section 
31A-16-108.5
;
(ii) notwithstanding Subsection (1), may only share confidential documents, material,
or information reported pursuant to Section 
31A-16-105
 with commissioners of states having
statutes or regulations substantially similar to Subsection (1) and who have agreed in writing
not to disclose the documents, material, or information;
(iii) may receive documents, materials, or information, including otherwise
confidential documents, materials, or information from the National Association of Insurance
Commissioners and its affiliates and subsidiaries and from regulatory and law enforcement
officials of other foreign or domestic jurisdictions, and shall maintain as confidential any
document, material, or information received with notice or the understanding that it is
confidential under the laws of the jurisdiction that is the source of the document, material, or
information; and
(iv) shall enter into written agreements with the National Association of Insurance
Commissioners governing sharing and use of information provided pursuant to this chapter
consistent with this Subsection (3) that shall:
(A) specify procedures and protocols regarding the confidentiality and security of
information shared with the National Association of Insurance Commissioners and its affiliates
and subsidiaries pursuant to this chapter, including procedures and protocols for sharing by the
National Association of Insurance Commissioners with other state, federal, or international
regulators;
(B) specify that ownership of information shared with the National Association of
Insurance Commissioners and its affiliates and subsidiaries pursuant to this chapter remains
with the commissioner and the National Association of Insurance Commissioner's use of the
information is subject to the direction of the commissioner;
(C) require prompt notice to be given to an insurer whose confidential information in
the possession of the National Association of Insurance Commissioners pursuant to this chapter
is subject to a request or subpoena to the National Association of Insurance Commissioners for
disclosure or production; and
(D) require the National Association of Insurance Commissioners and its affiliates and
subsidiaries to consent to intervention by an insurer in any judicial or administrative action in
which the National Association of Insurance Commissioners and its affiliates and subsidiaries
may be required to disclose confidential information about the insurer shared with the National
Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to this
chapter.
(4) The sharing of information by the commissioner pursuant to this chapter does not
constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely
responsible for the administration, execution, and enforcement of this chapter.
(5) A waiver of any applicable claim of confidentiality in the documents, materials, or
information does not occur as a result of disclosure to the commissioner under this section or
as a result of sharing as authorized in Subsection (3).
(6) Documents, materials, or other information in the possession or control of the
National Association of Insurance Commissioners pursuant to this chapter are:
(a) confidential, not public records, and not open to public inspection; and
(b) not subject to Title 63G, Chapter 2, Government Records Access and Management
Act.
Section 16. Section 
31A-16-112
 is enacted to read:
 31A-16-112.
Sanctions.
(1) (a) Notwithstanding Section 
31A-2-308
, the following sanctions apply:
(i) An insurer failing, without just cause, to file a registration statement required by this
chapter is required, after notice and hearing, to pay a penalty of $10,000 for each day's delay, to
be recovered by the commissioner and the penalty so recovered shall be paid into the General
Fund.
(ii) The maximum penalty under this section is $250,000.
(b) The commissioner may reduce the penalty if the insurer demonstrates to the
commissioner that the imposition of the penalty would constitute a financial hardship to the
insurer.
(2) A director or officer of an insurance holding company system who knowingly
violates, participates in, or assents to, or who knowingly shall permit any of the officers or
agents of the insurer to engage in transactions or make investments that have not been properly
reported or submitted pursuant to Subsection 
31A-16-105
(1), 
31A-16-106
(1)(b), or
31A-16-106
(2), or that violates this chapter, shall pay, in the director's or officer's individual
capacity, a civil forfeiture of not more than $10,000 per violation, notwithstanding Section
31A-2-308
, after notice and hearing before the commissioner. In determining the amount of
the civil forfeiture, the commissioner shall take into account the appropriateness of the
forfeiture with respect to the gravity of the violation, the history of previous violations, and
such other matters as justice may require.
(3) Whenever it appears to the commissioner that any insurer subject to this chapter or
a director, officer, employee, or agent of the insurer has engaged in any transaction or entered
into a contract that is subject to Section 
31A-16-106
 and that would not have been approved
had the approval been requested, the commissioner may order the insurer to cease and desist
immediately any further activity under that transaction or contract. After notice and hearing,
the commissioner may also order the insurer to void any contract and restore the status quo if
the action is in the best interest of the policyholders, creditors, or the public.
(4) Whenever it appears to the commissioner that an insurer or any director, officer,
employee, or agent of the insurer has committed a willful violation of this chapter, the
commissioner may refer the case to the appropriate prosecutor. Venue for the criminal action
shall be in the Third District Court of Salt Lake County, against the insurer or the responsible
director, officer, employee, or agent of the insurer. An insurer that willfully violates this
chapter may be fined not more than $250,000 notwithstanding Section 
31A-2-308
. An
individual who willfully violates this chapter may be fined in the individual's individual
capacity not more than $100,000 notwithstanding Section 
31A-2-308
 and is guilty of a
third-degree felony.
(5) An officer, director, or employee of an insurance holding company system who
willfully and knowingly subscribes to or makes or causes to be made any false statements, false
reports, or false filings with the intent to deceive the commissioner in the performances of the
commissioner's duties under this chapter, is guilty of a third-degree felony. Any fines imposed
shall be paid by the officer, director, or employee in the officer's, director's, or employee's
individual capacity.
(6) Whenever it appears to the commissioner that a person has committed a violation
of Section 
31A-16-103
 and that prevents the full understanding of the enterprise risk to the
insurer by affiliates or by the insurance holding company system, the violation may serve as an
independent basis for disapproving dividends or distributions and for placing the insurer under
an order of supervision in accordance with Section 
31A-27-503
.
Section 17. Section 
31A-16-113
 is enacted to read:
 31A-16-113.
Receivership.
Whenever it appears to the commissioner that a person has committed a violation of
this chapter that so impairs the financial condition of a domestic insurer as to threaten
insolvency or make the further transaction of business by it hazardous to its policyholders,
creditors, shareholders, or the public, then the commissioner may proceed as provided in
Section 
31A-16-114
 to take possession of the property of the domestic insurer and to conduct
its business.
Section 18. Section 
31A-16-114
 is enacted to read:
 31A-16-114.
Recovery.
(1) If an order for liquidation or rehabilitation of a domestic insurer is entered, the
receiver appointed under the order shall have a right to recover on behalf of the insurer:
(a) from any parent corporation, holding company, or person or affiliate who otherwise
controlled the insurer, the amount of distributions other than distributions of shares of the same
class of stock paid by the insurer on its capital stock; or
(b) any payment in the form of a bonus, termination settlement, or extraordinary lump
sum salary adjustment made by the insurer or its subsidiary to a director, officer, or employee,
when the distribution or payment pursuant to Subsection (1)(a) or this Subsection (1)(b) is
made at any time during the one year preceding the petition for liquidation, conservation, or
rehabilitation, as the case may be, subject to the limitations of Subsections (2), (3), and (4).
(2) A distribution may not be recovered if the parent or affiliate shows that when paid
the distribution was lawful and reasonable and that the insurer did not know and could not
reasonably have known that the distribution might adversely affect the ability of the insurer to
fulfill its contractual obligations.
(3) A person who was a parent corporation or holding company or a person who
otherwise controlled the insurer or affiliate at the time the distributions were paid shall be
liable up to the amount of distributions or payments under Subsection (1) that the person
received. A person who otherwise controlled the insurer at the time the distributions were
declared is liable up to the amount of distributions that would have been received if they had
been paid immediately. If two or more persons are liable with respect to the same
distributions, they shall be jointly and severally liable.
(4) The maximum amount recoverable under this section shall be the amount needed in
excess of all other available assets of the impaired or insolvent insurer to pay the contractual
obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
(5) To the extent that any person liable under Subsection (3) is insolvent or otherwise
fails to pay claims due from the person, its parent corporation, holding company, or person who
otherwise controlled it at the time the distribution was paid, are jointly and severally liable for
any resulting deficiency in the amount recovered from the parent corporation or holding
company or person who otherwise controlled it.
Section 19. Section 
31A-16-115
 is enacted to read:
 31A-16-115.
Revocation, suspension, or nonrenewal of insurer's license.
Whenever it appears to the commissioner that a person has committed a violation of
this chapter that makes the continued operation of an insurer contrary to the interests of
policyholders or the public, the commissioner may, after giving notice and an opportunity to be
heard, suspend, revoke, or refuse to renew the insurer's license or authority to do business in
this state for such period as the commissioner finds is required for the protection of
policyholders or the public. Any such determination shall be accompanied by specific findings
of fact and conclusions of law.
Section 20. Section 
31A-16-116
 is enacted to read:
 31A-16-116.
Rules and orders.
The commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act, may make rules necessary to carry out this chapter. The commissioner may
issue orders as is necessary to carry out this chapter.
Section 21. Section 
31A-16-117
 is enacted to read:
 31A-16-117.
Judicial review -- Mandamus.
(1) A person aggrieved by an act, determination, rule, or order or any other action of
the commissioner pursuant to this chapter may seek judicial review in accordance with Title
63G, Chapter 4, Administrative Procedures Act.
(2) The filing of an appeal pursuant to this section shall stay the application of any rule,
order, or other action of the commissioner to the appealing party unless the court, after giving
party notice and an opportunity to be heard, determines that a stay would be detrimental to the
interest of policyholders, shareholders, creditors, or the public.
(3) A person aggrieved by a failure of the commissioner to act or make a determination
required by this chapter may petition the Third District Court of Salt Lake County for writ in
the nature of a mandamus or a peremptory mandamus directing the commissioner to act or
make a determination.
Section 22. Section 
31A-16-118
 is enacted to read:
 31A-16-118.
Conflict with other laws.
If any law or part of a law of this state is inconsistent with this chapter, this chapter
governs.
Section 23. Section 
31A-16-119
 is enacted to read:
 31A-16-119.
Severability.
If any chapter, section, or subsection of this chapter or the application of any chapter,
section, or subsection to any person or circumstance is held invalid, the remainder of the
provisions of this chapter shall be given effect without the invalid provision or application. 
The provisions of this chapter are severable.
Section 24. Section 
31A-21-313
 is amended to read:
31A-21-313.
Limitation of actions.
(1) 
(a)
 An action on a written policy or contract of first party insurance shall be
commenced within three years after the inception of the loss.
(b) The inception of the loss on a fidelity bond is the date the insurer first denies all or
part of a claim made under the fidelity bond.
(2) Except as provided in Subsection (1) or elsewhere in this title, the law applicable to
limitation of actions in Title 78B, Chapter 2, Statutes of Limitations, applies to actions on
insurance policies.
(3) An insurance policy may not:
(a) limit the time for beginning an action on the policy to a time less than that
authorized by statute;
(b) prescribe in what court an action may be brought on the policy; or
(c) provide that no action may be brought, subject to permissible arbitration provisions
in contracts.
(4) Unless by verified complaint it is alleged that prejudice to the complainant will
arise from a delay in bringing suit against an insurer, which prejudice is other than the delay
itself, no action may be brought against an insurer on an insurance policy to compel payment
under the policy until the earlier of:
(a) 60 days after proof of loss has been furnished as required under the policy;
(b) waiver by the insurer of proof of loss; or
(c) the insurer's denial of full payment.
(5) The period of limitation is tolled during the period in which the parties conduct an
appraisal or arbitration procedure prescribed by the insurance policy, by law, or as agreed to by
the parties.
Section 25. Section 
31A-21-314
 is amended to read:
31A-21-314.
Prohibited provisions.
[
No
] 
(1) An
 insurance policy subject to this chapter may 
not
 contain any provision:
[
(1)
] 
(a)
 requiring it to be construed according to the laws of another jurisdiction
except as necessary to meet the requirements of compulsory insurance laws of other
jurisdictions;
[
(2)
] 
(b)
 depriving Utah courts of jurisdiction over an action against the insurer, except
as provided in permissible arbitration provisions; or
[
(3)
] 
(c)
 limiting the right of action against the insurer to less than three years from the
date the cause of action accrues.
(2) For purposes of Subsection (1)(c), the cause of action accrues on a fidelity bond on
the date the insurer first denies all or part of a claim made under the fidelity bond.
Section 26. Section 
31A-22-322
 is enacted to read:
 31A-22-322.
Transportation network company or driver.
(1) As used in this section:
(a) "Prearranged ride" means a period of time that:
(i) begins when the transportation network driver has accepted a passenger's request for
a ride through the transportation network company's software application; and
(ii) ends when the passenger exits the transportation network driver's vehicle.
(b) "Software application" means an Internet-connected software platform, including a
mobile application, that a transportation network company uses to:
(i) connect a transportation network driver to a passenger; and
(ii) process passenger requests.
(c) "Transportation network company" means an entity that:
(i) uses a software application to connect a passenger to a transportation network driver
providing transportation network services;
(ii) is not:
(A) a taxicab, as defined in Section 
53-3-102
; or
(B) a motor carrier, as defined in Section 
72-9-102
; and
(iii) does not own, control, operate, or manage the vehicle used to provide the
transportation network services.
(d) "Transportation network driver" means an individual who:
(i) pays a fee to a transportation network company, and, in exchange, receives a
connection to a potential passenger from the transportation network company; and
(ii) operates a motor vehicle that:
(A) the individual owns, leases, or is authorized to use; and
(B) the individual uses to provide transportation network services.
(e) "Transportation network services" means, for a transportation network driver
providing services through a transportation network company:
(i) providing a prearranged ride; or
(ii) being engaged in a waiting period.
(f) "Waiting period" means a period of time when:
(i) a transportation network driver is logged into a transportation network company's
software application; and
(ii) the transportation network driver is not engaged in a prearranged ride.
(2) A transportation network company or a transportation network driver shall maintain
insurance that covers, on a primary basis, a transportation network driver's use of a vehicle
during a prearranged ride and that includes:
(a) an acknowledgment that the transportation network driver is using the vehicle in
connection with a transportation network company during a prearranged ride or that the
transportation network driver is otherwise using the vehicle for a commercial purpose;
(b) liability coverage for a minimum amount of $1,000,000 per occurrence;
(c) personal injury protection to the extent required under Sections 
31A-22-306
through 
31A-22-309
;
(d) uninsured motorist coverage where required by Section 
31A-22-305
; and
(e) underinsured motorist coverage where required by Section 
31A-22-305.3
.
(3) A transportation network company or a transportation network driver shall maintain
insurance that covers, on a primary basis, a transportation network driver's use of a vehicle
during a waiting period and that includes:
(a) an acknowledgment that the transportation network driver is using the vehicle in
connection with a transportation network company during a waiting period or that the
transportation network driver is otherwise using the vehicle for a commercial purpose;
(b) liability coverage in a minimum amount, per occurrence, of:
(i) $50,000 to any one individual;
(ii) $100,000 to all individuals; and
(iii) $30,000 for property damage;
(c) personal injury protection to the extent required under Sections 
31A-22-306
through 
31A-22-309
;
(d) uninsured motorist coverage where required by Section 
31A-22-305
; and
(e) underinsured motorist coverage where required by Section 
31A-22-305.3
.
(4) A transportation network company or a transportation network driver shall maintain
comprehensive and collision insurance that covers, on a primary or contingent basis, a
transportation network driver's use of a vehicle while providing transportation network
services, and that includes:
(a) an acknowledgment that the transportation network driver is using the vehicle in
connection with a transportation network company during a prearranged ride or waiting period,
or that the transportation network driver is otherwise using the vehicle for a commercial
purpose; and
(b) coverage limits that are at least equal to such coverage limits, if any, for the
personal automobile insurance maintained by the vehicle's owner and reported to the
transportation network company.
(5) A transportation network company and a transportation network driver may satisfy
the requirements of Subsections (2), (3), and (4) by:
(a) the transportation network driver purchasing coverage that complies with
Subsections (2), (3), and (4);
(b) the transportation network company purchasing, on the transportation network
driver's behalf, coverage that complies with Subsections (2), (3), and (4); or
(c) a combination of Subsections (5)(a) and (b).
(6) An insurer may offer to a transportation network driver a personal automobile
liability insurance policy, or an amendment or endorsement to a personal automobile liability
policy, that:
(a) covers a private passenger motor vehicle while used to provide transportation
network services; and
(b) satisfies the coverage requirements described in Subsection (2), (3), or (4).
(7) Nothing in this section requires a personal automobile insurance policy to provide
coverage while a driver is providing transportation network services.
(8) If a transportation network company does not purchase a policy that complies with
Subsections (2), (3), and (4) on behalf of a transportation network driver, the transportation
network company shall verify that the driver has purchased a policy that complies with
Subsections (2), (3), and (4).
(9) An insurance policy that a transportation network company or a transportation
network driver maintains under Subsection (2) or (3):
(a) satisfies the security requirements of Section 
41-12a-301
; and
(b) may, along with insurance maintained under Subsection (4), be placed with:
(i) an insurer that is certified under Section 
31A-4-103
; or
(ii) a surplus lines insurer licensed under Section 
31A-23a-104
.
(10) An insurer that provides coverage for a transportation network driver explicitly for
the transportation network driver's transportation network services under Subsection (2) or (3)
shall have the duty to defend a liability claim arising from an occurrence while the
transportation network driver is providing transportation network services.
(11) (a) If insurance a transportation network driver maintains under Subsection (2),
(3), or (4) lapses or ceases to exist, a transportation network company shall provide coverage
complying with Subsection (2), (3), or (4) beginning with the first dollar of a claim.
(b) Subsection (11)(a) does not apply to comprehensive or collision insurance
otherwise required under Subsection (4) if, at the time of a claim for damage to a vehicle being
used to provide transportation network services, there is no outstanding lien on the vehicle.
(12) (a) An insurance policy that a transportation network company or transportation
network driver maintains under Subsection (2) or (3) may not provide that coverage is
dependent on a transportation network driver's personal automobile insurance policy first
denying a claim.
(b) Subsection (12)(a) does not apply to coverage a transportation network company
provides under Subsection (10) in the event a transportation network driver's coverage under
Subsection (2) or (3) lapses or ceases to exist.
(13) A personal automobile insurer:
(a) notwithstanding Section 
31A-22-302
, may offer a personal automobile liability
policy that excludes coverage for a loss that arises from the use of the insured vehicle to
provide transportation network services; and
(b) does not have the duty to defend or indemnify a loss if an exclusion described in
Subsection (13)(a) excludes coverage according to the policy's terms.
(14) If a transportation network company's insurer insures a vehicle with a lien against
the vehicle, and the transportation network company's insurer covers a claim regarding the
vehicle under comprehensive or collision coverage, the transportation network company shall
direct the transportation network company's insurer to issue the payment for the claim:
(a) directly to the person that is repairing the vehicle; or
(b) jointly to the owner of the vehicle and the primary lienholder.
Section 27. Section 
31A-22-504
 is amended to read:
31A-22-504.
Trustee groups.
(1)
 Group life insurance policies may be issued to
:
(a)
 policyholders who are the trustees of a fund established by two or more employers,
by one or more labor unions, or similar employee organizations, or by one or more employers
and one or more labor unions or similar employee organizations, to insure employees of the
employers or members of the unions or the organizations for the benefit of persons other than
the employers, the unions, or the organizations[
.
]
; or
(b) notwithstanding Subsection 
31A-22-501
(2), a Taft Hartley trust created in
accordance with Section 302(c)(5) of the Federal Labor Management Relations Act.
(2)
 These policies are subject to the following requirements:
[
(1)
] 
(a)
 The persons eligible for insurance are all of the employees of the employers or
all of the members of the unions or organizations, or all of any classes of employees or
members. The policy may include retired employees, elected and appointed officials of a
public agency if the employees of the agency are insured, and individual proprietors or partners
who are employers. The policy may include the trustees or their employees, or both, if their
duties are principally connected with the trusteeship.
[
(2)
] 
(b)
 The premiums for the policy are paid by the policyholders from funds
contributed by the employers, unions, or similar employee organizations, or from funds
contributed by the insured persons, or any combination of these. Except as provided under
Section 
31A-22-512
, a policy on which no part of the premium is contributed by the insured
persons specifically for their insurance is required to insure all eligible persons.
Section 28. Section 
31A-22-612
 is amended to read:
31A-22-612.
Conversion privileges for insured former spouse.
(1) An accident and health insurance policy, which in addition to covering the insured
also provides coverage to the spouse of the insured, may not contain a provision for
termination of coverage of a spouse covered under the policy, except by entry of a valid decree
of divorce or annulment between the parties.
(2) Every policy which contains this type of provision shall provide that upon the entry
of the divorce decree the spouse is entitled to have issued an individual policy of accident and
health insurance without evidence of insurability, upon application to the company and
payment of the appropriate premium. The policy shall provide the coverage being issued
which is most nearly similar to the terminated coverage. Probationary or waiting periods in the
policy are considered satisfied to the extent the coverage was in force under the prior policy.
(3) When the insurer receives actual notice that the coverage of a spouse is to be
terminated because of a divorce or annulment, the insurer shall promptly provide the spouse
written notification of the right to obtain individual coverage as provided in Subsection (2), the
premium amounts required, and the manner, place, and time in which premiums may be paid. 
The premium is determined in accordance with the insurer's table of premium rates applicable
to the age and class of risk of the persons to be covered and to the type and amount of coverage
provided. If the spouse applies and tenders the first monthly premium to the insurer within 30
days after receiving the notice provided by this Subsection 
(3)
, the spouse shall receive
individual coverage that commences immediately upon termination of coverage under the
insured's policy.
(4) This section does not apply to accident and health insurance policies offered on a
group blanket basis 
or a health benefit plan
.
Section 29. Section 
31A-22-620
 is amended to read:
31A-22-620.
Medicare Supplement Insurance Minimum Standards Act.
(1) As used in this section:
(a) "Applicant" means:
(i) in the case of an individual Medicare supplement policy, the person who seeks to
contract for insurance benefits; and
(ii) in the case of a group Medicare supplement policy, the proposed certificate holder.
(b) "Certificate" means any certificate delivered or issued for delivery in this state
under a group Medicare supplement policy.
(c) "Certificate form" means the form on which the certificate is delivered or issued for
delivery by the issuer.
(d) "Issuer" includes insurance companies, fraternal benefit societies, health care
service plans, health maintenance organizations, and any other entity delivering, or issuing for
delivery in this state, Medicare supplement policies or certificates.
(e) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the
Social Security Amendments of 1965, as then constituted or later amended.
(f) "Medicare Supplement Policy":
(i) means a group or individual policy of [
disability
] 
health
 insurance, other than a
policy issued pursuant to a contract under Section 1876 of the federal Social Security Act, 42
U.S.C. [
Section
] 
Sec.
et seq., or an issued policy under a demonstration project specified
in 42 U.S.C. [
Section
] 
Sec.
 1395ss(g)(1), that is advertised, marketed, or designed primarily as
a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses
of persons eligible for Medicare; and
(ii) does not include Medicare Advantage plans established under Medicare Part C,
outpatient prescription drug plans established under Medicare Part D, or any health care
prepayment plan that provides benefits pursuant to an agreement under Section 1833(a)(1)(A)
of the Social Security Act.
(g) "Policy form" means the form on which the policy is delivered or issued for
delivery by the issuer.
(2) (a) Except as otherwise specifically provided, this section applies to:
(i) all Medicare supplement policies delivered or issued for delivery in this state on or
after the effective date of this section;
(ii) all certificates issued under group Medicare supplement policies, that have been
delivered or issued for delivery in this state on or after the effective date of this section; and
(iii) policies or certificates that were in force prior to the effective date of this section,
with respect to requirements for benefits, claims payment, and policy reporting practice under
Subsection (3)(d), and loss ratios under Subsection (4).
(b) This section does not apply to a policy of one or more employers or labor
organizations, or of the trustees of a fund established by one or more employers or labor
organizations, or a combination of employers and labor unions, for employees or former
employees or a combination of employees and former employees, or for members or former
members of the labor organizations, or a combination of members and former members of
labor organizations.
(c) This section does not prohibit, nor does it apply to insurance policies or health care
benefit plans, including group conversion policies, provided to Medicare eligible persons that
are not marketed or held out to be Medicare supplement policies or benefit plans.
(3) (a) A Medicare supplement policy or certificate in force in the state may not contain
benefits that duplicate benefits provided by Medicare.
(b) Notwithstanding any other provision of law of this state, a Medicare supplement
policy or certificate may not exclude or limit benefits for loss incurred more than six months
from the effective date of coverage because it involved a preexisting condition. The policy or
certificate may not define a preexisting condition more restrictively than: "A condition for
which medical advice was given or treatment was recommended by or received from a
physician within six months before the effective date of coverage."
(c) The commissioner shall adopt rules to establish specific standards for policy
provisions of Medicare supplement policies and certificates. The standards adopted shall be in
addition to and in accordance with applicable laws of this state. A requirement of this title
relating to minimum required policy benefits, other than the minimum standards contained in
this section, may not apply to Medicare supplement policies and certificates. The standards
may include:
(i) terms of renewability;
(ii) initial and subsequent conditions of eligibility;
(iii) nonduplication of coverage;
(iv) probationary periods;
(v) benefit limitations, exceptions, and reductions;
(vi) elimination periods;
(vii) requirements for replacement;
(viii) recurrent conditions; and
(ix) definitions of terms.
(d) The commissioner shall adopt rules establishing minimum standards for benefits,
claims payment, marketing practices, compensation arrangements, and reporting practices for
Medicare supplement policies and certificates.
(e) The commissioner may adopt rules to conform Medicare supplement policies and
certificates to the requirements of federal law and regulations, including:
(i) requiring refunds or credits if the policies do not meet loss ratio requirements;
(ii) establishing a uniform methodology for calculating and reporting loss ratios;
(iii) assuring public access to policies, premiums, and loss ratio information of issuers
of Medicare supplement insurance;
(iv) establishing a process for approving or disapproving policy forms and certificate
forms and proposed premium increases;
(v) establishing a policy for holding public hearings prior to approval of premium
increases;
(vi) establishing standards for Medicare select policies and certificates; and
(vii) nondiscrimination for genetic testing or genetic information.
(f) The commissioner may adopt rules that prohibit policy provisions not otherwise
specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair, or
unfairly discriminatory to any person insured or proposed to be insured under a Medicare
supplement policy or certificate.
(4) Medicare supplement policies shall return to policyholders benefits that are
reasonable in relation to the premium charged. The commissioner shall make rules to establish
minimum standards for loss ratios of Medicare supplement policies on the basis of incurred
claims experience, or incurred health care expenses where coverage is provided by a health
maintenance organization on a service basis rather than on a reimbursement basis, and earned
premiums in accordance with accepted actuarial principles and practices.
(5) (a) To provide for full and fair disclosure in the sale of Medicare supplement
policies, a Medicare supplement policy or certificate may not be delivered in this state unless
an outline of coverage is delivered to the applicant at the time application is made.
(b) The commissioner shall prescribe the format and content of the outline of coverage
required by Subsection (5)(a).
(c) For purposes of this section, "format" means style arrangements and overall
appearance, including such items as the size, color, and prominence of type and arrangement of
text and captions. The outline of coverage shall include:
(i) a description of the principal benefits and coverage provided in the policy;
(ii) a statement of the renewal provisions, including any reservation by the issuer of a
right to change premiums; and disclosure of the existence of any automatic renewal premium
increases based on the policyholder's age; and
(iii) a statement that the outline of coverage is a summary of the policy issued or
applied for and that the policy should be consulted to determine governing contractual
provisions.
(d) The commissioner may make rules for captions or notice if the commissioner finds
that the rules are:
(i) in the public interest; and
(ii) designed to inform prospective insureds that particular insurance coverages are not
Medicare supplement coverages, for all accident and health insurance policies sold to persons
eligible for Medicare, other than:
(A) a medicare supplement policy; or
(B) a disability income policy.
(e) The commissioner may prescribe by rule a standard form and the contents of an
informational brochure for persons eligible for Medicare, that is intended to improve the
buyer's ability to select the most appropriate coverage and improve the buyer's understanding of
Medicare. Except in the case of direct response insurance policies, the commissioner may
require by rule that the informational brochure be provided concurrently with delivery of the
outline of coverage to any prospective insureds eligible for Medicare. With respect to direct
response insurance policies, the commissioner may require by rule that the prescribed brochure
be provided upon request to any prospective insureds eligible for Medicare, but in no event
later than the time of policy delivery.
(f) The commissioner may adopt reasonable rules to govern the full and fair disclosure
of the information in connection with the replacement of accident and health policies,
subscriber contracts, or certificates by persons eligible for Medicare.
(6) Notwithstanding Subsection (1), Medicare supplement policies and certificates
shall have a notice prominently printed on the first page of the policy or certificate, or attached
to the front page, stating in substance that the applicant has the right to return the policy or
certificate within 30 days of its delivery and to have the premium refunded if, after examination
of the policy or certificate, the applicant is not satisfied for any reason. Any refund made
pursuant to this section shall be paid directly to the applicant by the issuer in a timely manner.
(7) Every issuer of Medicare supplement insurance policies or certificates in this state
shall provide a copy of any Medicare supplement advertisement intended for use in this state,
whether through written or broadcast medium, to the commissioner for review.
(8) The commissioner may adopt rules to conform Medicare and Medicare supplement
policies and certificates to the marketing requirements of federal law and regulation.
Section 30. Section 
31A-23a-102
 is amended to read:
31A-23a-102.
Definitions.
As used in this chapter:
(1) "Bail bond producer" is as defined in Section 
31A-35-102
.
(2) "Designated home state" means the state or territory of the United States or the
District of Columbia:
(a) in which an insurance producer, limited lines producer, consultant, managing
general agent, or reinsurance intermediary licensee does not maintain the licensee's principal:
(i) place of residence; or
(ii) place of business;
(b) if the resident state, territory, or District of Columbia of the licensee does not
license for the line of authority sought, the licensee has qualified for the license as if the person
were a resident in the state, territory, or District of Columbia described in Subsection (2)(a),
including an applicable:
(i) examination requirement;
(ii) fingerprint background check requirement; and
(iii) continuing education requirement; and
(c) if the licensee has designated the state, territory, or District of Columbia as the
designated home state.
[
(2)
] 
(3)
 "Home state" means
:
(a)
 a state or territory of the United States or the District of Columbia in which an
insurance producer
, limited lines producer, consultant, managing general agent, or reinsurance
intermediary licensee
:
[
(a)
] 
(i)
 maintains the [
insurance producer's
] 
licensee's
 principal:
[
(i)
] 
(A)
 place of residence; or
[
(ii)
] 
(B)
 place of business; and
[
(b)
] 
(ii)
 is licensed to act as [
an insurance producer
] 
a resident licensee; or
(b) if the resident state, territory, or the District of Columbia described in Subsection
(3)(a) does not license for the line of authority sought, a state, territory, or the District of
Columbia:
(i) in which the licensee is licensed;
(ii) in which the licensee is in good standing; and
(iii) that the licensee has designated as the licensee's designated home state
.
[
(3)
] 
(4)
 "Insurer" is as defined in Section 
31A-1-301
, except that the following
persons or similar persons are not insurers for purposes of Part 7, Producer Controlled Insurers:
(a) a risk retention group as defined in:
(i) the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499;
(ii) the Risk Retention Act, 15 U.S.C. Sec. 3901 et seq.; and
(iii) Chapter 15, Part 2, Risk Retention Groups Act;
(b) a residual market pool;
(c) a joint underwriting authority or association; and
(d) a captive insurer.
[
(4)
] 
(5)
 "License" is defined in Section 
31A-1-301
.
[
(5)
] 
(6)
 (a) "Managing general agent" means a person that:
(i) manages all or part of the insurance business of an insurer, including the
management of a separate division, department, or underwriting office;
(ii) acts as an agent for the insurer whether it is known as a managing general agent,
manager, or other similar term;
(iii) produces and underwrites an amount of gross direct written premium equal to, or
more than, 5% of the policyholder surplus as reported in the last annual statement of the insurer
in any one quarter or year:
(A) with or without the authority;
(B) separately or together with an affiliate; and
(C) directly or indirectly; and
(iv) (A) adjusts or pays claims in excess of an amount determined by the
commissioner; or
(B) negotiates reinsurance on behalf of the insurer.
(b) Notwithstanding Subsection [
(5)
] 
(6)
(a), the following persons may not be
considered as managing general agent for the purposes of this chapter:
(i) an employee of the insurer;
(ii) a United States manager of the United States branch of an alien insurer;
(iii) an underwriting manager that, pursuant to contract:
(A) manages all the insurance operations of the insurer;
(B) is under common control with the insurer;
(C) is subject to Chapter 16, Insurance Holding Companies; and
(D) is not compensated based on the volume of premiums written; and
(iv) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal
insurer or inter-insurance exchange under powers of attorney.
[
(6)
] 
(7)
 "Negotiate" means the act of conferring directly with or offering advice
directly to a purchaser or prospective purchaser of a particular contract of insurance concerning
a substantive benefit, term, or condition of the contract if the person engaged in that act:
(a) sells insurance; or
(b) obtains insurance from insurers for purchasers.
[
(7)
] 
(8)
 "Reinsurance intermediary" means:
(a) a reinsurance intermediary-broker; or
(b) a reinsurance intermediary-manager.
[
(8)
] 
(9)
 "Reinsurance intermediary-broker" means a person other than an officer or
employee of the ceding insurer, firm, association, or corporation who solicits, negotiates, or
places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority
or power to bind reinsurance on behalf of the insurer.
[
(9)
] 
(10)
 (a) "Reinsurance intermediary-manager" means a person who:
(i) has authority to bind or who manages all or part of the assumed reinsurance
business of a reinsurer, including the management of a separate division, department, or
underwriting office; and
(ii) acts as an agent for the reinsurer whether the person is known as a reinsurance
intermediary-manager, manager, or other similar term.
(b) Notwithstanding Subsection [
(9)
] 
(10)
(a), the following persons may not be
considered reinsurance intermediary-managers for the purpose of this chapter with respect to
the reinsurer:
(i) an employee of the reinsurer;
(ii) a United States manager of the United States branch of an alien reinsurer;
(iii) an underwriting manager that, pursuant to contract:
(A) manages all the reinsurance operations of the reinsurer;
(B) is under common control with the reinsurer;
(C) is subject to Chapter 16, Insurance Holding Companies; and
(D) is not compensated based on the volume of premiums written; and
(iv) the manager of a group, association, pool, or organization of insurers that:
(A) engage in joint underwriting or joint reinsurance; and
(B) are subject to examination by the insurance commissioner of the state in which the
manager's principal business office is located.
[
(10)
] 
(11)
 "Resident" is as defined by rule made by the commissioner in accordance
with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
[
(11)
] 
(12)
 "Search" means a license subline of authority in conjunction with the title
insurance line of authority that allows a person to issue title insurance commitments or policies
on behalf of a title insurer.
[
(12)
] 
(13)
 "Sell" means to exchange a contract of insurance:
(a) by any means;
(b) for money or its equivalent; and
(c) on behalf of an insurance company.
[
(13)
] 
(14)
 "Solicit" means:
(a) attempting to sell insurance;
(b) asking or urging a person to apply for:
(i) a particular kind of insurance; and
(ii) insurance from a particular insurance company;
(c) advertising insurance, including advertising for the purpose of obtaining leads for
the sale of insurance; or
(d) holding oneself out as being in the insurance business.
[
(14)
] 
(15)
 "Terminate" means:
(a) the cancellation of the relationship between:
(i) an individual licensee or agency licensee and a particular insurer; or
(ii) an individual licensee and a particular agency licensee; or
(b) the termination of:
(i) an individual licensee's or agency licensee's authority to transact insurance on behalf
of a particular insurance company; or
(ii) an individual licensee's authority to transact insurance on behalf of a particular
agency licensee.
[
(15)
] 
(16)
 "Title marketing representative" means a person who:
(a) represents a title insurer in soliciting, requesting, or negotiating the placing of:
(i) title insurance; or
(ii) escrow services; and
(b) does not have a search or escrow license as provided in Section 
31A-23a-106
.
[
(16)
] 
(17)
 "Uniform application" means the version of the National Association of
Insurance Commissioners' uniform application for resident and nonresident producer licensing
at the time the application is filed.
[
(17)
] 
(18)
 "Uniform business entity application" means the version of the National
Association of Insurance Commissioners' uniform business entity application for resident and
nonresident business entities at the time the application is filed.
Section 31. Section 
31A-23a-113
 is amended to read:
31A-23a-113.
License lapse and voluntary surrender.
(1) (a) A license issued under this chapter
, including a line of authority,
 shall lapse if
the licensee fails to:
(i) pay when due a fee under Section 
31A-3-103
;
(ii) complete continuing education requirements under Section 
31A-23a-202
 before
submitting the license renewal application;
(iii) submit a completed renewal application as required by Section 
31A-23a-104
;
(iv) submit additional documentation required to complete the licensing process as
related to a specific license type or line of authority; or
(v) maintain an active license in a licensee's home state if the licensee is a nonresident
licensee.
(b) (i) A licensee whose license lapses 
may request reinstatement of the license and
line of authority no more than one year after the day on which the license lapses.
(ii) A licensee whose license lapses
 due to the following may request an action
described in Subsection (1)(b)[
(ii)
]
(iii)
:
(A) military service;
(B) voluntary service for a period of time designated by the person for whom the
licensee provides voluntary service; or
(C) some other extenuating circumstances, such as long-term medical disability.
[
(ii)
] 
(iii)
 A licensee described in Subsection (1)(b)[
(i)
]
(ii)
 may request:
(A) reinstatement of the license 
and line of authority
 no later than one year after the
day on which the license lapses; and
(B) waiver of any of the following imposed for failure to comply with renewal
procedures:
(I) an examination requirement;
(II) reinstatement fees set under Section 
31A-3-103
;
(III) continuing education requirements; or
(IV) other sanction imposed for failure to comply with renewal procedures.
(2) If a license 
or line of authority
 issued under this chapter is voluntarily surrendered,
the license or line of authority may be reinstated:
(a) during the license period in which the license 
or line of authority
 is voluntarily
surrendered; and
(b) no later than one year after the day on which the license 
or line of authority
 is
voluntarily surrendered.
Section 32. Section 
31A-23a-402
 is amended to read:
31A-23a-402.
Unfair marketing practices -- Communication -- Unfair
discrimination -- Coercion or intimidation -- Restriction on choice.
(1) (a) (i) Any of the following may not make or cause to be made any communication
that contains false or misleading information, relating to an insurance product or contract, any
insurer, or any licensee under this title, including information that is false or misleading
because it is incomplete:
(A) a person who is or should be licensed under this title;
(B) an employee or producer of a person described in Subsection (1)(a)(i)(A);
(C) a person whose primary interest is as a competitor of a person licensed under this
title; and
(D) a person on behalf of any of the persons listed in this Subsection (1)(a)(i).
(ii) As used in this Subsection (1), "false or misleading information" includes:
(A) assuring the nonobligatory payment of future dividends or refunds of unused
premiums in any specific or approximate amounts, but reporting fully and accurately past
experience is not false or misleading information; and
(B) with intent to deceive a person examining it:
(I) filing a report;
(II) making a false entry in a record; or
(III) wilfully refraining from making a proper entry in a record.
(iii) A licensee under this title may not:
(A) use any business name, slogan, emblem, or related device that is misleading or
likely to cause the insurer or other licensee to be mistaken for another insurer or other licensee
already in business; or
(B) use any 
name,
 advertisement or other insurance promotional material that would
cause a reasonable person to mistakenly believe that a state or federal government agency,
including the Health Insurance Exchange, also called the "Utah Health Exchange[
,
]" 
or
"Avenue H,"
 created in Section 
63M-1-2504
, the Comprehensive Health Insurance Pool
created in Chapter 29, Comprehensive Health Insurance Pool Act, and the Children's Health
Insurance Program created in Title 26, Chapter 40, Utah Children's Health Insurance Act:
(I) is responsible for the insurance sales activities of the person;
(II) stands behind the credit of the person;
(III) guarantees any returns on insurance products of or sold by the person; or
(IV) is a source of payment of any insurance obligation of or sold by the person.
(iv) A person who is not an insurer may not assume or use any name that deceptively
implies or suggests that person is an insurer.
(v) A person other than persons licensed as health maintenance organizations under
Chapter 8 may not use the term "Health Maintenance Organization" or "HMO" in referring to
itself.
(b) A licensee's violation creates a rebuttable presumption that the violation was also
committed by the insurer if:
(i) the licensee under this title distributes cards or documents, exhibits a sign, or
publishes an advertisement that violates Subsection (1)(a), with reference to a particular
insurer:
(A) that the licensee represents; or
(B) for whom the licensee processes claims; and
(ii) the cards, documents, signs, or advertisements are supplied or approved by that
insurer.
(2) (a) A title insurer, individual title insurance producer, or agency title insurance
producer or any officer or employee of the title insurer, individual title insurance producer, or
agency title insurance producer may not pay, allow, give, or offer to pay, allow, or give,
directly or indirectly, as an inducement to obtaining any title insurance business:
(i) any rebate, reduction, or abatement of any rate or charge made incident to the
issuance of the title insurance;
(ii) any special favor or advantage not generally available to others;
(iii) any money or other consideration, except if approved under Section 
31A-2-405
; or
(iv) material inducement.
(b) "Charge made incident to the issuance of the title insurance" includes escrow
charges, and any other services that are prescribed in rule by the Title and Escrow Commission
after consultation with the commissioner and subject to Section 
31A-2-404
.
(c) An insured or any other person connected, directly or indirectly, with the
transaction may not knowingly receive or accept, directly or indirectly, any benefit referred to
in Subsection (2)(a), including:
(i) a person licensed under Title 61, Chapter 2c, Utah Residential Mortgage Practices
and Licensing Act;
(ii) a person licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices
Act;
(iii) a builder;
(iv) an attorney; or
(v) an officer, employee, or agent of a person listed in this Subsection (2)(c)(iii).
(3) (a) An insurer may not unfairly discriminate among policyholders by charging
different premiums or by offering different terms of coverage, except on the basis of
classifications related to the nature and the degree of the risk covered or the expenses involved.
(b) Rates are not unfairly discriminatory if they are averaged broadly among persons
insured under a group, blanket, or franchise policy, and the terms of those policies are not
unfairly discriminatory merely because they are more favorable than in similar individual
policies.
(4) (a) This Subsection (4) applies to:
(i) a person who is or should be licensed under this title;
(ii) an employee of that licensee or person who should be licensed;
(iii) a person whose primary interest is as a competitor of a person licensed under this
title; and
(iv) one acting on behalf of any person described in Subsections (4)(a)(i) through (iii).
(b) A person described in Subsection (4)(a) may not commit or enter into any
agreement to participate in any act of boycott, coercion, or intimidation that:
(i) tends to produce:
(A) an unreasonable restraint of the business of insurance; or
(B) a monopoly in that business; or
(ii) results in an applicant purchasing or replacing an insurance contract.
(5) (a) (i) Subject to Subsection (5)(a)(ii), a person may not restrict in the choice of an
insurer or licensee under this chapter, another person who is required to pay for insurance as a
condition for the conclusion of a contract or other transaction or for the exercise of any right
under a contract.
(ii) A person requiring coverage may reserve the right to disapprove the insurer or the
coverage selected on reasonable grounds.
(b) The form of corporate organization of an insurer authorized to do business in this
state is not a reasonable ground for disapproval, and the commissioner may by rule specify
additional grounds that are not reasonable. This Subsection (5) does not bar an insurer from
declining an application for insurance.
(6) A person may not make any charge other than insurance premiums and premium
financing charges for the protection of property or of a security interest in property, as a
condition for obtaining, renewing, or continuing the financing of a purchase of the property or
the lending of money on the security of an interest in the property.
(7) (a) A licensee under this title may not refuse or fail to return promptly all indicia of
agency to the principal on demand.
(b) A licensee whose license is suspended, limited, or revoked under Section
31A-2-308
, 
31A-23a-111
, or 
31A-23a-112
 may not refuse or fail to return the license to the
commissioner on demand.
(8) (a) A person may not engage in an unfair method of competition or any other unfair
or deceptive act or practice in the business of insurance, as defined by the commissioner by
rule, after a finding that the method of competition, the act, or the practice:
(i) is misleading;
(ii) is deceptive;
(iii) is unfairly discriminatory;
(iv) provides an unfair inducement; or
(v) unreasonably restrains competition.
(b) Notwithstanding Subsection (8)(a), for purpose of the title insurance industry, the
Title and Escrow Commission shall make rules, subject to Section 
31A-2-404
, that define an
unfair method of competition or unfair or deceptive act or practice after a finding that the
method of competition, the act, or the practice:
(i) is misleading;
(ii) is deceptive;
(iii) is unfairly discriminatory;
(iv) provides an unfair inducement; or
(v) unreasonably restrains competition.
Section 33. Section 
31A-23a-402.5
 is amended to read:
31A-23a-402.5.
Inducements.
(1) (a) Except as provided in Subsection (2), a producer, consultant, or other licensee
under this title, or an officer or employee of a licensee, may not induce a person to enter into,
continue, or terminate an insurance contract by offering a benefit that is not:
(i) specified in the insurance contract; or
(ii) directly related to the insurance contract.
(b) An insurer may not make or knowingly allow an agreement of insurance that is not
clearly expressed in the insurance contract to be issued or renewed.
(c) A licensee under this title may not absorb the tax under Section 
31A-3-301
.
(2) This section does not apply to a title insurer, an individual title insurance producer,
or agency title insurance producer, or an officer or employee of a title insurer, an individual
title insurance producer, or an agency title insurance producer.
(3) Items not prohibited by Subsection (1) include an insurer:
(a) reducing premiums because of expense savings;
(b) providing to a policyholder or insured one or more incentives, as defined by the
commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act, to participate in a program or activity designed to reduce claims or claim
expenses, including:
(i) a premium discount offered to a small or large employer group based on a wellness
program if:
(A) the premium discount for the employer group does not exceed 20% of the group
premium; and
(B) the premium discount based on the wellness program is offered uniformly by the
insurer to all employer groups in the large or small group market;
(ii) a premium discount offered to employees of a small or large employer group in an
amount that does not exceed federal limits on wellness program incentives; or
(iii) a combination of premium discounts offered to the employer group and the
employees of an employer group, based on a wellness program, if:
(A) the premium discounts for the employer group comply with Subsection (3)(b)(i);
and
(B) the premium discounts for the employees of an employer group comply with
Subsection (3)(b)(ii); or
(c) receiving premiums under an installment payment plan.
(4) Items not prohibited by Subsection (1) include a producer, consultant, or other
licensee, or an officer or employee of a licensee, either directly or through a third party:
(a) engaging in a usual kind of social courtesy if receipt of the social courtesy is not
conditioned on a quote or the purchase of a particular insurance product;
(b) extending credit on a premium to the insured:
(i) without interest, for no more than 90 days from the effective date of the insurance
contract;
(ii) for interest that is not less than the legal rate under Section 
15-1-1
, on the unpaid
balance after the time period described in Subsection (4)(b)(i); and
(iii) except that an installment or payroll deduction payment of premiums on an
insurance contract issued under an insurer's mass marketing program is not considered an
extension of credit for purposes of this Subsection (4)(b);
(c) preparing or conducting a survey that:
(i) is directly related to an accident and health insurance policy purchased from the
licensee; or
(ii) is used by the licensee to assess the benefit needs and preferences of insureds,
employers, or employees directly related to an insurance product sold by the licensee;
(d) providing limited human resource services that are directly related to an insurance
product sold by the licensee, including:
(i) answering questions directly related to:
(A) an employee benefit offering or administration, if the insurance product purchased
from the licensee is accident and health insurance or health insurance; and
(B) employment practices liability, if the insurance product offered by or purchased
from the licensee is property or casualty insurance; and
(ii) providing limited human resource compliance training and education directly
pertaining to an insurance product purchased from the licensee;
(e) providing the following types of information or guidance:
(i) providing guidance directly related to compliance with federal and state laws for an
insurance product purchased from the licensee;
(ii) providing a workshop or seminar addressing an insurance issue that is directly
related to an insurance product purchased from the licensee; or
(iii) providing information regarding:
(A) employee benefit issues;
(B) directly related insurance regulatory and legislative updates; or
(C) similar education about an insurance product sold by the licensee and how the
insurance product interacts with tax law;
(f) preparing or providing a form that is directly related to an insurance product
purchased from, or offered by, the licensee;
(g) preparing or providing documents directly related to a premium only cafeteria plan
within the meaning of Section 125, Internal Revenue Code, or a flexible spending account, but
not providing ongoing administration of a flexible spending account;
(h) providing enrollment and billing assistance, including:
(i) providing benefit statements or new hire insurance benefits packages; and
(ii) providing technology services such as an electronic enrollment platform or
application system;
(i) communicating coverages in writing and in consultation with the insured and
employees;
(j) providing employee communication materials and notifications directly related to an
insurance product purchased from a licensee;
(k) providing claims management and resolution to the extent permitted under the
licensee's license;
(l) providing underwriting or actuarial analysis or services;
(m) negotiating with an insurer regarding the placement and pricing of an insurance
product;
(n) recommending placement and coverage options;
(o) providing a health fair or providing assistance or advice on establishing or
operating a wellness program, but not providing any payment for or direct operation of the
wellness program;
(p) providing COBRA and Utah mini-COBRA administration, consultations, and other
services directly related to an insurance product purchased from the licensee;
(q) assisting with a summary plan description, including providing a summary plan
description wraparound;
(r) providing information necessary for the preparation of documents directly related to
the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq., as
amended;
(s) providing information or services directly related to the Health Insurance Portability
and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended, such as services
directly related to health care access, portability, and renewability when offered in connection
with accident and health insurance sold by a licensee;
(t) sending proof of coverage to a third party with a legitimate interest in coverage;
(u) providing information in a form approved by the commissioner and directly related
to determining whether an insurance product sold by the licensee meets the requirements of a
third party contract that requires or references insurance coverage;
(v) facilitating risk management services directly related to property and casualty
insurance products sold or offered for sale by the licensee, including:
(i) risk management;
(ii) claims and loss control services;
(iii) risk assessment consulting, including analysis of:
(A) employer's job descriptions; or
(B) employer's safety procedures or manuals; and
(iv) providing information and training on best practices;
(w) otherwise providing services that are legitimately part of servicing an insurance
product purchased from a licensee; and
(x) providing other directly related services approved by the department.
(5) An inducement prohibited under Subsection (1) includes a producer, consultant, or
other licensee, or an officer or employee of a licensee:
(a) (i) providing a rebate;
(ii) paying the salary of an employee of a person who purchases an insurance product
from the licensee; or
(iii) if the licensee is an insurer, or a third party administrator who contracts with an
insurer, paying the salary for an onsite staff member to perform an act prohibited under
Subsection (5)(b)(xii); or
(b) engaging in one or more of the following unless a fee is paid in accordance with
Subsection (8):
(i) performing background checks of prospective employees;
(ii) providing legal services by a person licensed to practice law;
(iii) performing drug testing that is directly related to an insurance product purchased
from the licensee;
(iv) preparing employer or employee handbooks, except that a licensee may:
(A) provide information for a medical benefit section of an employee handbook;
(B) provide information for the section of an employee handbook directly related to an
employment practices liability insurance product purchased from the licensee; or
(C) prepare or print an employee benefit enrollment guide;
(v) providing job descriptions, postings, and applications for a person;
(vi) providing payroll services;
(vii) providing performance reviews or performance review training;
(viii) providing union advice;
(ix) providing accounting services;
(x) providing data analysis information technology programs, except as provided in
Subsection (4)(h)(ii);
(xi) providing administration of health reimbursement accounts or health savings
accounts; or
(xii) if the licensee is an insurer, or a third party administrator who contracts with an
insurer, the insurer issuing an insurance policy that lists in the insurance policy one or more of
the following prohibited benefits:
(A) performing background checks of prospective employees;
(B) providing legal services by a person licensed to practice law;
(C) performing drug testing that is directly related to an insurance product purchased
from the insurer;
(D) preparing employer or employee handbooks;
(E) providing job descriptions postings, and applications;
(F) providing payroll services;
(G) providing performance reviews or performance review training;
(H) providing union advice;
(I) providing accounting services;
(J) providing discrimination testing; or
(K) providing data analysis information technology programs.
(6) A producer, consultant, or other licensee or an officer or employee of a licensee
shall itemize and bill separately from any other insurance product or service offered or
provided under Subsection (5)(b).
(7) (a) A de minimis gift or meal not to exceed a fair market value of [
$25
] 
$100
 for
each individual receiving the gift or meal is presumed to be a social courtesy not conditioned
on a quote or purchase of a particular insurance product for purposes of Subsection (4)(a).
(b) Notwithstanding Subsection (4)(a), a de minimis gift or meal not to exceed $10
may be conditioned on receipt of a quote of a particular insurance product.
(8) If as provided under Subsection (5)(b) a producer, consultant, or other licensee is
paid a fee to provide an item listed in Subsection (5)(b), the licensee shall comply with
Subsection 
31A-23a-501
(2) in charging the fee, except that the fee paid for the item shall equal
or exceed the fair market value of the item.
(9) For purposes of this section, "fair market value" [
is determined on the basis of what
an individual insured or policyholder would pay on the open market for that item
] 
means what
a knowledgeable, willing, and unpressured buyer would pay for a product or service to a
knowledgeable, willing, and unpressured seller in the open market without any connection to
other goods, services, including insurance services, or contracts, including insurance contracts,
sold by the producer, consultant, or other licensee, or an officer or employee of the licensee
.
Section 34. Section 
31A-23b-206
 is amended to read:
31A-23b-206.
Continuing education requirements.
(1) The commissioner shall, by rule, prescribe continuing education requirements for a
navigator.
(2) (a) The commissioner may not require a degree from an institution of higher
education as part of continuing education.
(b) The commissioner may state a continuing education requirement in terms of hours
of instruction received in:
(i) accident and health insurance;
(ii) qualification for and enrollment in public programs;
(iii) qualification for and enrollment in premium subsidies;
(iv) cultural competency;
(v) conflict of interest standards; and
(vi) other exchange functions.
(3) (a) For a navigator line of authority, continuing education requirements shall
require:
(i) that a licensee complete 12 credit hours of continuing education for every one-year
licensing period;
(ii) that at least two of the 12 credit hours described in Subsection (3)(a)(i) be ethics
courses;
(iii) that at least one of the 12 credit hours described in Subsection (3)(a)(i) be training
on defined contribution arrangements and the use of the small employer health insurance
exchange; and
(iv) that a licensee complete the annual navigator training and certification program
developed by the Centers for Medicare and Medicaid Services.
(b) For a certified application counselor, the continuing education requirements shall
require:
(i) that a licensee complete six credit hours of continuing education for every one-year
licensing period;
(ii) that at least two of the six credit hours described in Subsection (3)(b)(i) be on
ethics courses;
(iii) that at least one of the six credit hours described in Subsection (3)(b)(i) be training
on defined contribution arrangements and the use of the small employer health insurance
exchange; and
(iv) that a licensee complete the annual certified application counselor training and
certification program developed by the Centers for Medicare and Medicaid Services.
(c) An hour of continuing education in accordance with Subsections (3)(a)(i) and (b)(i)
may be obtained through:
(i) classroom attendance;
(ii) home study;
(iii) watching a video recording; or
(iv) another method approved by rule.
(d) A licensee may obtain continuing education hours at any time during the one-year
license period.
(e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commissioner shall, by rule, authorize one or more continuing education providers, including a
state or national professional producer or consultant associations, to:
(i) offer a qualified program on a geographically accessible basis; and
(ii) collect a reasonable fee for funding and administration of a continuing education
program, subject to the review and approval of the commissioner.
(4) The commissioner shall approve a continuing education provider or a continuing
education course that satisfies the requirements of this section.
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commissioner shall by rule establish the procedures for continuing education provider
registration and course approval.
(6) This section applies only to a navigator who is a natural person.
(7) A navigator shall keep documentation of completing the continuing education
requirements of this section for [
two years
] 
one year
 after the end of the [
two-year
] 
one-year
licensing period to which the continuing education applies.
Section 35. Section 
31A-25-302.5
 is enacted to read:
 31A-25-302.5.
Place of business and residence address.
(1) A third-party administrator licensed under this chapter shall register and maintain
with the commissioner:
(a) the address and one or more telephone numbers of the licensee's principal place of
business;
(b) a valid business email address at which the commissioner may contact the licensee;
and
(c) if the licensee is an individual, the licensee's residence address and telephone
number.
(2) A licensee shall notify the commissioner within 30 days of a change of any of the
following required to be registered with the commissioner under this section:
(a) an address;
(b) a telephone number; or
(c) a business email address.
Section 36. Section 
31A-27a-116
 is amended to read:
31A-27a-116.
Financial reporting.
(1) (a) The receiver shall comply with all requirements for receivership financial
reporting 
in this section and
 as 
may be
 specified by the commissioner by rule 
or ordered by the
court
 within:
(i) 180 days after the day on which the receivership court enters an order of
receivership; and
(ii) 45 days following each calendar quarter after the period specified in Subsection
(1)(a)(i).
(b) The rule described in this Subsection (1) shall:
(i) comply with this section;
(ii) be made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
Act; and
(iii) require the receiver to file any financial report with the receivership court in
addition to any other person specified in the rule.
(c) A financial report shall include, at a minimum, a statement of:
(i) the assets and liabilities of the insurer;
(ii) the changes in those assets and liabilities; and
(iii) all funds received or disbursed by the receiver during that reporting period.
(d) The receiver may qualify a financial report or provide notes to the financial
statement for further explanation.
(e) The receivership court may order the receiver to provide any additional information
as the receivership court considers appropriate.
(2) Each affected guaranty association shall file one or more reports with the liquidator:
(a) (i) within 180 days after the day on which the receivership court enters an order of
liquidation; and
(ii) (A) within 45 days following each calendar quarter after the period described in
Subsection (2)(a)(i); or
(B) at an interval:
(I) agreed to between the liquidator and the affected guaranty association; or
(II) required by the receivership court; and
(b) in no event less than annually.
(3) For good cause shown, the receivership court may grant:
(a) relief for an extension or modification of time to comply with Subsection (1) or (2);
or
(b) such other relief as may be appropriate.
Section 37. Section 
31A-28-213
 is amended to read:
31A-28-213.
Miscellaneous provisions.
(1) (a) Any person who has a claim against an insurer, whether or not the insurer is a
member insurer, under any provision in an insurance policy, other than a policy of an insolvent
insurer that is also a covered claim, is required to first exhaust that person's right under that
person's policy.
(b) Any amount payable on a covered claim under this part under an insurance policy is
reduced by the amount of any recovery under the insurance policy described in Subsection
(1)(a).
(c) (i) Except as provided in Subsection (1)(c)(ii) a person having a claim that may be
recovered under more than one insurance guaranty association or its equivalent shall first seek
recovery from the association of the place of residence of the insured.
(ii) If the person's claim is:
(A) a first-party claim for damage to property with a permanent location, the person
shall seek recovery first from the association of the location of the property; and
(B) a workers' compensation claim, the person shall seek recovery first from the
association of the residence of the claimant.
(iii) Any recovery under this part shall be reduced by the amount of recovery from any
other insurance guaranty association or its equivalent.
(2) An insurer may not exercise any right of subrogation against an insolvent insurer's
insured if exercise of the right would require the insured, or a guaranty fund under this chapter,
to pay an amount the insolvent insurer is obligated to pay under an insurance policy issued to
the insured, except that an insurer may exercise a right of subrogation for the amount the
subrogation claim exceeds the guaranty association obligation limitations.
[
(2)
] 
(3)
 This part may not be construed to reduce the liability for unpaid assessments of
the insureds of an impaired or insolvent insurer operating under a plan with assessment
liability.
[
(3)
] 
(4)
 (a) Records shall be kept of all negotiations and meetings in which the
association or its representatives are involved to discuss the activities of the association in
carrying out the association's powers and duties under Section 
31A-28-207
. Records of these
negotiations or meetings shall be made public only 
upon
:
(i) [
upon
] the termination of a liquidation, rehabilitation, or conservation proceeding
involving the insolvent insurer;
(ii) the termination of the insolvency of the insurer; or
(iii) the order of a court of competent jurisdiction.
(b) This Subsection [
(3)
] 
(4)
 does not limit the duty of the association to render a report
of its activities under Section 
31A-28-214
.
[
(4)
] 
(5)
 For the purpose of carrying out its obligations under this part, the association
is considered to be a creditor of the insolvent insurer, except to the extent of any amounts the
association is entitled as subrogee under Section 
31A-28-207
.
[
(5)
] 
(6)
 (a) Before the termination of any liquidation, rehabilitation, or conservation
proceeding, the court may take into consideration the contributions of the respective parties,
including:
(i) the association;
(ii) the shareholders;
(iii) the policyowners of the insolvent insurer; and
(iv) any other party with a bona fide interest, in making an equitable distribution of the
ownership rights of the insolvent insurer.
(b) In making the determination described in Subsection [
(5)
] 
(6)
(a), the court shall
consider the welfare of the policyholders of the continuing or successor insurer.
(c) A distribution to stockholders, if any, of an insolvent insurer may not be made until
the total amount of valid claims of the association with interest on those claims for funds
expended in carrying out its powers and duties under Section 
31A-28-207
 regarding this
insurer have been fully recovered by the association.
[
(6)
] 
(7)
 A rehabilitator, liquidator, or conservator appointed under any section of this
part may recover on behalf of the insurer for excessive distributions paid to affiliates, pursuant
to Section 
31A-27a-502
.
Section 38. Section 
31A-37-102
 is amended to read:
31A-37-102.
Definitions.
As used in this chapter:
(1) "Affiliated company" means a business entity that because of common ownership,
control, operation, or management is in the same corporate 
or limited liability company
 system
as:
(a) a parent;
(b) an industrial insured; or
(c) a member organization.
(2) "Alien captive insurance company" means an insurer:
(a) formed to write insurance business for a parent or affiliate of the insurer; and
(b) licensed pursuant to the laws of an alien jurisdiction that imposes statutory or
regulatory standards:
(i) on a business entity transacting the business of insurance in the alien jurisdiction;
and
(ii) in a form acceptable to the commissioner.
(3) "Association" means a legal association of two or more persons that has been in
continuous existence for at least one year if:
(a) the association or its member organizations:
(i) own, control, or hold with power to vote all of the outstanding voting securities of
an association captive insurance company incorporated as a stock insurer; or
(ii) have complete voting control over an association captive insurance company
incorporated as a mutual insurer;
(b) the association's member organizations collectively constitute all of the subscribers
of an association captive insurance company formed as a reciprocal insurer; or
(c) the association or its member organizations have complete voting control over an
association captive insurance company formed as a limited liability company.
(4) "Association captive insurance company" means a business entity that insures risks
of:
(a) a member organization of the association;
(b) an affiliate of a member organization of the association; and
(c) the association.
(5) "Branch business" means an insurance business transacted by a branch captive
insurance company in this state.
(6) "Branch captive insurance company" means an alien captive insurance company
that has a certificate of authority from the commissioner to transact the business of insurance in
this state through a business unit with a principal place of business in this state.
(7) "Branch operation" means a business operation of a branch captive insurance
company in this state.
(8) "Captive insurance company" means any of the following formed or holding a
certificate of authority under this chapter:
(a) a branch captive insurance company;
(b) a pure captive insurance company;
(c) an association captive insurance company;
(d) a sponsored captive insurance company;
(e) an industrial insured captive insurance company;
[
(f) a captive reinsurance company;
]
[
(g)
] 
(f)
 a special purpose captive insurance company; or
[
(h)
] 
(g)
 a special purpose financial captive insurance company.
[
(9) "Captive reinsurance company" means a reinsurer that is:
]
[
(a) formed or has a certificate of authority pursuant to this chapter;
]
[
(b) wholly owned by a qualifying reinsurer parent company; and
]
[
(c) a stock corporation.
]
[
(11)
] 
(9)
 "Commissioner" means [
the
] 
Utah's
 Insurance Commissioner or the
commissioner's designee.
(10) "Common ownership and control" means that two or more captive insurance
companies are owned or controlled by the same person or group of persons as follows:
(a) in the case of a captive insurance company that is a stock corporation, the direct or
indirect ownership of 80% or more of the outstanding voting stock of the stock corporation;
(b) in the case of a captive insurance company that is a mutual corporation, the direct
or indirect ownership of 80% or more of the surplus and the voting power of the mutual
corporation;
(c) in the case of a captive insurance company that is a limited liability company, the
direct or indirect ownership by the same member or members of 80% or more of the
membership interests in the limited liability company; or
(d) in the case of a sponsored captive insurance company, a protected cell is a separate
captive insurance company owned and controlled by the protected cell's participant, only if:
(i) the participant is the only participant with respect to the protected cell; and
(ii) the participant is the sponsor or is affiliated with the sponsor of the sponsored
captive insurance company through common ownership and control.
[
(12)
] 
(11)
 "Consolidated debt to total capital ratio" means the ratio of Subsection
[
(12)
] 
(11)
(a) to (b).
(a) This Subsection [
(12)
] 
(11)
(a) is an amount equal to the sum of all debts and hybrid
capital instruments including:
(i) all borrowings from depository institutions;
(ii) all senior debt;
(iii) all subordinated debts;
(iv) all trust preferred shares; and
(v) all other hybrid capital instruments that are not included in the determination of
consolidated GAAP net worth issued and outstanding.
(b) This Subsection [
(12)
] 
(11)
(b) is an amount equal to the sum of:
(i) total capital consisting of all debts and hybrid capital instruments as described in
Subsection [
(12)
] 
(11)
(a); and
(ii) shareholders' equity determined in accordance with generally accepted accounting
principles for reporting to the United States Securities and Exchange Commission.
[
(13)
] 
(12)
 "Consolidated GAAP net worth" means the consolidated shareholders' 
or
members'
 equity determined in accordance with generally accepted accounting principles for
reporting to the United States Securities and Exchange Commission.
[
(14)
] 
(13)
 "Controlled unaffiliated business" means a business entity:
(a) (i) in the case of a pure captive insurance company, that is not in the corporate 
or
limited liability company
 system of a parent or the parent's affiliate; or
(ii) in the case of an industrial insured captive insurance company, that is not in the
corporate 
or limited liability company
 system of an industrial insured or an affiliated company
of the industrial insured;
(b) (i) in the case of a pure captive insurance company, that has a contractual
relationship with a parent or affiliate; or
(ii) in the case of an industrial insured captive insurance company, that has a
contractual relationship with an industrial insured or an affiliated company of the industrial
insured; and
(c) whose risks are managed by one of the following in accordance with Subsection
31A-37-106
(1)[
(k)
]
(j)
:
(i) a pure captive insurance company; or
(ii) an industrial insured captive insurance company.
[
(15)
] 
(14)
 "Department" means the Insurance Department.
[
(16)
] 
(15)
 "Industrial insured" means an insured:
(a) that produces insurance:
(i) by the services of a full-time employee acting as a risk manager or insurance
manager; or
(ii) using the services of a regularly and continuously qualified insurance consultant;
(b) whose aggregate annual premiums for insurance on all risks total at least $25,000;
and
(c) that has at least 25 full-time employees.
[
(17)
] 
(16)
 "Industrial insured captive insurance company" means a business entity
that:
(a) insures risks of the industrial insureds that comprise the industrial insured group;
and
(b) may insure the risks of:
(i) an affiliated company of an industrial insured; or
(ii) a controlled unaffiliated business of:
(A) an industrial insured; or
(B) an affiliated company of an industrial insured.
[
(18)
] 
(17)
 "Industrial insured group" means:
(a) a group of industrial insureds that collectively:
(i) own, control, or hold with power to vote all of the outstanding voting securities of
an industrial insured captive insurance company incorporated 
or organized as a limited liability
company
 as a stock insurer; or
(ii) have complete voting control over an industrial insured captive insurance company
incorporated 
or organized as a limited liability company
 as a mutual insurer;
(b) a group that is:
(i) created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. [
Section
]
Sec.
et seq., as amended, as a corporation or other limited liability association; and
(ii) taxable under this title as a:
(A) stock corporation; or
(B) mutual insurer; or
(c) a group that has complete voting control over an industrial captive insurance
company formed as a limited liability company.
[
(19)
] 
(18)
 "Member organization" means a person that belongs to an association.
[
(20)
] 
(19)
 "Parent" means a person that directly or indirectly owns, controls, or holds
with power to vote more than 50% of:
(a) the outstanding voting securities of a pure captive insurance company; or
(b) the pure captive insurance company, if the pure captive insurance company is
formed as a limited liability company.
[
(21)
] 
(20)
 "Participant" means an entity that is insured by a sponsored captive
insurance company:
(a) if the losses of the participant are limited through a participant contract to the assets
of a protected cell; and
(b)(i) the entity is permitted to be a participant under Section 
31A-37-403
; or
(ii) the entity is an affiliate of an entity permitted to be a participant under Section
31A-37-403
.
[
(22)
] 
(21)
 "Participant contract" means a contract by which a sponsored captive
insurance company:
(a) insures the risks of a participant; and
(b) limits the losses of the participant to the assets of a protected cell.
[
(23)
] 
(22)
 "Protected cell" means a separate account established and maintained by a
sponsored captive insurance company for one participant.
[
(24)
] 
(23)
 "Pure captive insurance company" means a business entity that insures risks
of a parent or affiliate of the business entity.
[
(25) "Qualifying reinsurer parent company" means a reinsurer:
]
[
(a) authorized to write reinsurance by this state; and
]
[
(b) that has:
]
[
(i) a consolidated GAAP net worth of not less than $500,000,000; and
]
[
(ii) a consolidated debt to total capital ratio not greater than .50.
]
[
(26)
] 
(24)
 "Special purpose financial captive insurance company" is as defined in
Section 
31A-37a-102
.
[
(27)
] 
(25)
 "Sponsor" means an entity that:
(a) meets the requirements of Section 
31A-37-402
; and
(b) is approved by the commissioner to:
(i) provide all or part of the capital and surplus required by applicable law 
in an amount
of not less than $350,000, which amount the commissioner may increase by order if the
commissioner considers it necessary
; and
(ii) organize and operate a sponsored captive insurance company.
[
(28)
] 
(26)
 "Sponsored captive insurance company" means a captive insurance
company:
(a) in which the minimum capital and surplus required by applicable law is provided by
one or more sponsors;
(b) that is formed or holding a certificate of authority under this chapter;
(c) that insures the risks of a separate participant through the contract; and
(d) that segregates each participant's liability through one or more protected cells.
[
(29)
] 
(27)
 "Treasury rates" means the United States Treasury strip asked yield as
published in the Wall Street Journal as of a balance sheet date.
Section 39. Section 
31A-37-106
 is amended to read:
31A-37-106.
Authority to make rules -- Authority to issue orders.
(1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commissioner may adopt rules to:
(a) determine circumstances under which a branch captive insurance company is not
required to be a pure captive insurance company;
(b) require a statement, document, or information that a captive insurance company
shall provide to the commissioner to obtain a certificate of authority;
(c) determine a factor a captive insurance company shall provide evidence of under
Subsection 
31A-37-202
(4)(c);
(d) prescribe one or more capital requirements for a captive insurance company in
addition to those required under Section 
31A-37-204
 based on the type, volume, and nature of
insurance business transacted by the captive insurance company;
[
(e) establish:
]
[
(i) the amount of capital or surplus required to be retained under Subsection
31A-37-205
(4) at the payment of a dividend or other distribution by a captive insurance
company; or
]
[
(ii) a formula to determine the amount described in Subsection 
31A-37-205
(4);
]
[
(f)
] 
(e)
 waive or modify a requirement for public notice and hearing for the following
by a captive insurance company:
(i) merger;
(ii) consolidation;
(iii) conversion;
(iv) mutualization; [
or
]
(v) redomestication; 
or
(vi) acquisition;
[
(g)
] 
(f)
 approve the use of one or more reliable methods of valuation and rating for:
(i) an association captive insurance company;
(ii) a sponsored captive insurance company; or
(iii) an industrial insured group;
[
(h)
] 
(g)
 prohibit or limit an investment that threatens the solvency or liquidity of:
(i) a pure captive insurance company; or
(ii) an industrial insured captive insurance company;
[
(i)
] 
(h)
 determine the financial reports a sponsored captive insurance company shall
annually file with the commissioner;
[
(j)
] 
(i)
 prescribe the required forms and reports under Section 
31A-37-501
; and
[
(k)
] 
(j)
 establish one or more standards to ensure that:
(i) one of the following is able to exercise control of the risk management function of a
controlled unaffiliated business to be insured by a pure captive insurance company:
(A) a parent; or
(B) an affiliated company of a parent; or
(ii) one of the following is able to exercise control of the risk management function of
a controlled unaffiliated business to be insured by an industrial insured captive insurance
company:
(A) an industrial insured; or
(B) an affiliated company of the industrial insured.
(2) Notwithstanding Subsection (1)[
(k)
]
(j)
, until the commissioner adopts the rules
authorized under Subsection (1)[
(k)
]
(j)
, the commissioner may by temporary order grant
authority to insure risks to:
(a) a pure captive insurance company; or
(b) an industrial insured captive insurance company.
(3) The commissioner may issue prohibitory, mandatory, and other orders relating to a
captive insurance company as necessary to enable the commissioner to secure compliance with
this chapter.
Section 40. Section 
31A-37-202
 is amended to read:
31A-37-202.
Permissive areas of insurance.
(1) (a) Except as provided in Subsection (1)(b), when permitted by its articles of
incorporation
, certificate of organization,
 or charter, a captive insurance company may apply to
the commissioner for a certificate of authority to do all insurance authorized by this title except
workers' compensation insurance.
(b) Notwithstanding Subsection (1)(a):
(i) a pure captive insurance company may not insure a risk other than a risk of:
(A) its parent or affiliate;
(B) a controlled unaffiliated business; or
(C) a combination of Subsections (1)(b)(i)(A) and (B);
(ii) an association captive insurance company may not insure a risk other than a risk of:
(A) an affiliate;
(B) a member organization of its association; and
(C) an affiliate of a member organization of its association;
(iii) an industrial insured captive insurance company may not insure a risk other than a
risk of:
(A) an industrial insured that is part of the industrial insured group;
(B) an affiliate of an industrial insured that is part of the industrial insured group; and
(C) a controlled unaffiliated business of:
(I) an industrial insured that is part of the industrial insured group; or
(II) an affiliate of an industrial insured that is part of the industrial insured group;
(iv) a special purpose captive insurance company may only insure a risk of its parent;
(v) a captive insurance company may not provide:
(A) personal motor vehicle insurance coverage;
(B) homeowner's insurance coverage; or
(C) a component of a coverage described in this Subsection (1)(b)(v); and
(vi) a captive insurance company may not accept or cede reinsurance except as
provided in Section 
31A-37-303
.
(c) Notwithstanding Subsection (1)(b)(iv), for a risk approved by the commissioner a
special purpose captive insurance company may provide:
(i) insurance;
(ii) reinsurance; or
(iii) both insurance and reinsurance.
(2) To conduct insurance business in this state a captive insurance company shall:
(a) obtain from the commissioner a certificate of authority authorizing it to conduct
insurance business in this state;
(b) hold at least once each year in this state:
(i) a board of directors meeting; [
or
]
(ii) in the case of a reciprocal insurer, a subscriber's advisory committee meeting; 
or
(iii) in the case of a limited liability company, a meeting of the managers;
(c) maintain in this state:
(i) the principal place of business of the captive insurance company; or
(ii) in the case of a branch captive insurance company, the principal place of business
for the branch operations of the branch captive insurance company; and
(d) except as provided in Subsection (3), appoint a resident registered agent to accept
service of process and to otherwise act on behalf of the captive insurance company in this state.
(3) Notwithstanding Subsection (2)(d), in the case of a captive insurance company
formed as a corporation or a reciprocal insurer, if the registered agent cannot with reasonable
diligence be found at the registered office of the captive insurance company, the commissioner
is the agent of the captive insurance company upon whom process, notice, or demand may be
served.
(4) (a) Before receiving a certificate of authority, a captive insurance company:
(i) formed as a corporation shall file with the commissioner:
(A) a certified copy of:
(I) articles of incorporation or the charter of the corporation; and
(II) bylaws of the corporation;
(B) a statement under oath of the president and secretary of the corporation showing
the financial condition of the corporation; and
(C) any other statement or document required by the commissioner under Section
31A-37-106
;
(ii) formed as a reciprocal shall:
(A) file with the commissioner:
(I) a certified copy of the power of attorney of the attorney-in-fact of the reciprocal;
(II) a certified copy of the subscribers' agreement of the reciprocal;
(III) a statement under oath of the attorney-in-fact of the reciprocal showing the
financial condition of the reciprocal; and
(IV) any other statement or document required by the commissioner under Section
31A-37-106
; and
(B) submit to the commissioner for approval a description of the:
(I) coverages;
(II) deductibles;
(III) coverage limits;
(IV) rates; and
(V) any other information the commissioner requires under Section 
31A-37-106
[
.
]
; and
(iii) formed as a limited liability company shall file with the commissioner:
(A) a certified copy of the certificate of organization and the operating agreement of
the organization;
(B) a statement under oath of the president and secretary of the organization showing
the financial condition of the organization;
(C) evidence that the limited liability company is manager-managed; and
(D) any other statement or document required by the commissioner under Section
31A-37-106
.
(b) (i) If there is a subsequent material change in an item in the description required
under Subsection (4)(a)(ii)(B) for a reciprocal captive insurance company, the reciprocal
captive insurance company shall submit to the commissioner for approval an appropriate
revision to the description required under Subsection (4)(a)(ii)(B).
(ii) A reciprocal captive insurance company that is required to submit a revision under
Subsection (4)(b)(i) may not offer any additional types of insurance until the commissioner
approves a revision of the description.
(iii) A reciprocal captive insurance company shall inform the commissioner of a
material change in a rate within 30 days of the adoption of the change.
(c) In addition to the information required by Subsection (4)(a), an applicant captive
insurance company shall file with the commissioner evidence of:
(i) the amount and liquidity of the assets of the applicant captive insurance company
relative to the risks to be assumed by the applicant captive insurance company;
(ii) the adequacy of the expertise, experience, and character of the person who will
manage the applicant captive insurance company;
(iii) the overall soundness of the plan of operation of the applicant captive insurance
company;
(iv) the adequacy of the loss prevention programs for the following of the applicant
captive insurance company:
(A) a parent;
(B) a member organization; or
(C) an industrial insured; and
(v) any other factor the commissioner:
(A) adopts by rule under Section 
31A-37-106
; and
(B) considers relevant in ascertaining whether the applicant captive insurance company
will be able to meet the policy obligations of the applicant captive insurance company.
(d) In addition to the information required by Subsections (4)(a), (b), and (c), an
applicant sponsored captive insurance company shall file with the commissioner:
(i) a business plan at the level of detail required by the commissioner under Section
31A-37-106
 demonstrating:
(A) the manner in which the applicant sponsored captive insurance company will
account for the losses and expenses of each protected cell; and
(B) the manner in which the applicant sponsored captive insurance company will report
to the commissioner the financial history, including losses and expenses, of each protected cell;
(ii) a statement acknowledging that the applicant sponsored captive insurance company
will make all financial records of the applicant sponsored captive insurance company,
including records pertaining to a protected cell, available for inspection or examination by the
commissioner;
(iii) a contract or sample contract between the applicant sponsored captive insurance
company and a participant; and
(iv) evidence that expenses will be allocated to each protected cell in an equitable
manner.
(5) (a) Information submitted pursuant to Subsection (4) is classified as a protected
record under Title 63G, Chapter 2, Government Records Access and Management Act.
(b) Notwithstanding Title 63G, Chapter 2, Government Records Access and
Management Act, the commissioner may disclose information submitted pursuant to
Subsection (4) to a public official having jurisdiction over the regulation of insurance in
another state if:
(i) the public official receiving the information agrees in writing to maintain the
confidentiality of the information; and
(ii) the laws of the state in which the public official serves require the information to be
confidential.
(c) This Subsection (5) does not apply to information provided by an industrial insured
captive insurance company insuring the risks of an industrial insured group.
(6) (a) A captive insurance company shall pay to the department the following
nonrefundable fees established by the department under Sections 
31A-3-103
, 
31A-3-304
, and
63J-1-504
:
(i) a fee for examining, investigating, and processing, by a department employee, of an
application for a certificate of authority made by a captive insurance company;
(ii) a fee for obtaining a certificate of authority for the year the captive insurance
company is issued a certificate of authority by the department; and
(iii) a certificate of authority renewal fee.
(b) The commissioner may:
(i) assign a department employee or retain legal, financial, and examination services
from outside the department to perform the services described in:
(A) Subsection (6)(a); and
(B) Section 
31A-37-502
; and
(ii) charge the reasonable cost of services described in Subsection (6)(b)(i) to the
applicant captive insurance company.
(7) If the commissioner is satisfied that the documents and statements filed by the
applicant captive insurance company comply with this chapter, the commissioner may grant a
certificate of authority authorizing the company to do insurance business in this state.
(8) A certificate of authority granted under this section expires annually and shall be
renewed by July 1 of each year.
Section 41. Section 
31A-37-204
 is amended to read:
31A-37-204.
Paid-in capital -- Other capital.
(1) (a) The commissioner may not issue a certificate of authority to a company
described in Subsection (1)(c) unless the company possesses and thereafter maintains
unimpaired paid-in capital 
and unimpaired paid-in surplus
 of:
(i) in the case of a pure captive insurance company, not less than [
$100,000
] 
$250,000
;
(ii) in the case of an association captive insurance company incorporated as a stock
insurer, not less than [
$400,000
] 
$750,000
;
(iii) in the case of an industrial insured captive insurance company incorporated as a
stock insurer, not less than [
$200,000
] 
$700,000
;
(iv) in the case of a sponsored captive insurance company, not less than [
$500,000
]
$1,000,000, of which a minimum of $350,000 is provided by the sponsor
; or
(v) in the case of a special purpose captive insurance company, an amount determined
by the commissioner after giving due consideration to the company's business plan, feasibility
study, and pro-formas, including the nature of the risks to be insured.
(b) The paid-in capital 
and surplus
 required under this Subsection (1) may be in the
form of:
(i) (A) cash; or
(B) cash equivalent; or
(ii) an irrevocable letter of credit:
(A) issued by:
(I) a bank chartered by this state; or
(II) a member bank of the Federal Reserve System; and
(B) approved by the commissioner.
(c) This Subsection (1) applies to:
(i) a pure captive insurance company;
(ii) a sponsored captive insurance company;
(iii) a special purpose captive insurance company;
(iv) an association captive insurance company incorporated as a stock insurer; or
(v) an industrial insured captive insurance company incorporated as a stock insurer.
(2) (a) The commissioner may, under Section 
31A-37-106
, prescribe additional capital
based on the type, volume, and nature of insurance business transacted.
(b) The capital prescribed by the commissioner under this Subsection (2) may be in the
form of:
(i) cash; or
(ii) an irrevocable letter of credit issued by:
(A) a bank chartered by this state; or
(B) a member bank of the Federal Reserve System.
(3) (a) Except as provided in Subsection (3)(c), a branch captive insurance company, as
security for the payment of liabilities attributable to branch operations, shall, through its branch
operations, establish and maintain a trust fund:
(i) funded by an irrevocable letter of credit or other acceptable asset; and
(ii) in the United States for the benefit of:
(A) United States policyholders; and
(B) United States ceding insurers under:
(I) insurance policies issued; or
(II) reinsurance contracts issued or assumed.
(b) The amount of the security required under this Subsection (3) shall be no less than:
(i) the capital and surplus required by this chapter; and
(ii) the reserves on the insurance policies or reinsurance contracts, including:
(A) reserves for losses;
(B) allocated loss adjustment expenses;
(C) incurred but not reported losses; and
(D) unearned premiums with regard to business written through branch operations.
(c) Notwithstanding the other provisions of this Subsection (3), the commissioner may
permit a branch captive insurance company that is required to post security for loss reserves on
branch business by its reinsurer to reduce the funds in the trust account required by this section
by the same amount as the security posted if the security remains posted with the reinsurer.
(4) (a) A captive insurance company may not pay the following without the prior
approval of the commissioner:
(i) a dividend out of capital or surplus in excess of the limits under Section
16-10a-640
; or
(ii) a distribution with respect to capital or surplus in excess of the limits under Section
16-10a-640
.
(b) The commissioner shall condition approval of an ongoing plan for the payment of
dividends or other distributions on the retention, at the time of each payment, of capital or
surplus in excess of:
(i) amounts specified by the commissioner under Section 
31A-37-106
; or
(ii) determined in accordance with formulas approved by the commissioner under
Section 
31A-37-106
.
(5) Notwithstanding Subsection (1), a captive insurance company organized as a
reciprocal insurer under this chapter may not be issued a certificate of authority unless the
captive insurance company possesses and maintains unimpaired paid-in surplus of $1,000,000.
(6) (a) The commissioner may prescribe additional unimpaired paid-in surplus based
upon the type, volume, and nature of the insurance business transacted.
(b) The unimpaired paid-in surplus required under this Subsection (6) may be in the
form of an irrevocable letter of credit issued by:
(i) a bank chartered by this state; or
(ii) a member bank of the Federal Reserve System.
Section 42. Section 
31A-37-301
 is amended to read:
31A-37-301.
Incorporation -- Organization.
(1) A pure captive insurance company or a sponsored captive insurance company shall
be incorporated as a stock insurer with the capital of the pure captive insurance company or
sponsored captive insurance company:
(a) divided into shares; and
(b) held by the stockholders of the pure captive insurance company or sponsored
captive insurance company.
(2) A pure captive insurance company or a sponsored captive insurance company
formed as a limited liability company shall be organized as a members' interest insurer with the
capital of the pure captive insurance company or sponsored captive insurance company:
(a) divided into interests; and
(b) held by the members of the pure captive insurance company or sponsored captive
insurance company.
[
(2)
] 
(3)
 An association captive insurance company or an industrial insured captive
insurance company may be:
(a) incorporated as a stock insurer with the capital of the association captive insurance
company or industrial insured captive insurance company:
(i) divided into shares; and
(ii) held by the stockholders of the association captive insurance company or industrial
insured captive insurance company;
(b) incorporated as a mutual insurer without capital stock, with a governing body
elected by the member organizations of the association captive insurance company or industrial
insured captive insurance company; or
(c) organized as a reciprocal.
[
(3)
] 
(4)
 A captive insurance company 
formed as a corporation
 may not have fewer
than three incorporators of whom [
not fewer than two shall be residents
] 
one shall be a resident
of this state.
(5) A captive insurance company formed as a limited liability company may not have
fewer than three organizers of whom one shall be a resident of this state.
[
(4)
] 
(6)
 (a) Before a captive insurance company formed as a corporation files the
corporation's articles of incorporation with the Division of Corporations and Commercial
Code, the incorporators shall obtain from the commissioner a certificate finding that the
establishment and maintenance of the proposed corporation will promote the general good of
the state.
(b) In considering a request for a certificate under Subsection [
(4)
] 
(6)
(a), the
commissioner shall consider:
(i) the character, reputation, financial standing, and purposes of the incorporators;
(ii) the character, reputation, financial responsibility, insurance experience, 
and
business qualifications of the officers and directors;
(iii) any information in:
(A) the application for a certificate of authority; or
(B) the department's files; and
(iv) other aspects 
that
 the commissioner considers advisable.
(7) (a) Before a captive insurance company formed as a limited liability company files
the limited liability company's articles of organization with the Division of Corporations and
Commercial Code, the limited liability company shall obtain from the commissioner a
certificate finding that the establishment and maintenance of the proposed limited liability
company will promote the general good of the state.
(b) In considering a request for a certificate under Subsection (7)(a), the commissioner
shall consider:
(i) the character, reputation, financial standing, and purposes of the organizers;
(ii) the character, reputation, financial responsibility, insurance experience, and
business qualifications of the managers;
(iii) any information in:
(A) the application for a certificate of authority; or
(B) the department's files; and
(iv) other aspects that the commissioner considers advisable.
[
(5)
] 
(8)
 (a) A captive insurance company formed as a corporation shall file with the
Division of Corporations and Commercial Code:
(i) the captive insurance company's articles of incorporation;
(ii) the certificate issued pursuant to Subsection [
(4)
] 
(6)
; and
(iii) the fees required by the Division of Corporations and Commercial Code.
(b) The Division of Corporations and Commercial Code shall file both the articles of
incorporation and the certificate described in Subsection [
(4)
] 
(6)
 for a captive insurance
company that complies with this section.
(9) (a) A captive insurance company formed as a limited liability company shall file
with the Division of Corporations and Commercial Code:
(i) the captive insurance company's certificate of organization;
(ii) the certificate issued pursuant to Subsection (7); and
(iii) the fees required by the Division of Corporations and Commercial Code.
(b) The Division of Corporations and Commercial Code shall file both the certificate
of organization and the certificate described in Subsection (7) for a captive insurance company
that complies with this section.
[
(6)
] 
(10)
 (a) The organizers of a captive insurance company formed as a reciprocal
insurer shall obtain from the commissioner a certificate finding that the establishment and
maintenance of the proposed association will promote the general good of the state.
(b) In considering a request for a certificate under Subsection [
(6)
] 
(10)
(a), the
commissioner shall consider:
(i) the character, reputation, financial standing, and purposes of the incorporators;
(ii) the character, reputation, financial responsibility, insurance experience, and
business qualifications of the officers and directors;
(iii) any information in:
(A) the application for a certificate of authority; or
(B) the department's files; and
(iv) other aspects 
that
 the commissioner considers advisable.
[
(7)
] 
(11)
 (a) An alien captive insurance company that has received a certificate of
authority to act as a branch captive insurance company shall obtain from the commissioner a
certificate finding that:
(i) the home state of the alien captive insurance company imposes statutory or
regulatory standards in a form acceptable to the commissioner on companies transacting the
business of insurance in that state; and
(ii) after considering the character, reputation, financial responsibility, insurance
experience, and business qualifications of the officers and directors of the alien captive
insurance company, and other relevant information, the establishment and maintenance of the
branch operations will promote the general good of the state.
(b) After the commissioner issues a certificate under Subsection [
(7)
] 
(11)
(a) to an
alien captive insurance company, the alien captive insurance company may register to do
business in this state.
[
(8) The capital stock of a captive insurance company incorporated as a stock insurer
may not be issued at less than par value.
]
[
(9)
] 
(12)
 At least one of the members of the board of directors of a captive insurance
company formed as a corporation shall be a resident of this state.
(13) At least one of the managers of a limited liability company shall be a resident of
this state.
[
(10)
] 
(14)
 At least one of the members of the subscribers' advisory committee of a
captive insurance company formed as a reciprocal insurer shall be a resident of this state.
[
(11)
] 
(15)
 (a) A captive insurance company formed as a corporation under this chapter
has the privileges and is subject to the provisions of the general corporation law as well as the
applicable provisions contained in this chapter.
(b) If a conflict exists between a provision of the general corporation law and a
provision of this chapter, this chapter shall control.
(c) Except as provided in Subsection [
(11)
] 
(15)
(d), the provisions of this title
pertaining to a merger, consolidation, conversion, mutualization, and redomestication apply in
determining the procedures to be followed by a captive insurance company in carrying out any
of the transactions described in those provisions.
(d) Notwithstanding Subsection [
(11)
] 
(15)
(c), the commissioner may waive or modify
the requirements for public notice and hearing in accordance with rules adopted under Section
31A-37-106
.
(e) If a notice of public hearing is required, but no one requests a hearing, the
commissioner may cancel the public hearing.
(16) (a) A captive insurance company formed as a limited liability company under this
chapter has the privileges and is subject to Title 48, Chapter 2c, Utah Revised Limited Liability
Company Act, or Title 48, Chapter 3a, Utah Revised Uniform Limited Liability Company Act,
as appropriate pursuant to Section 
48-3a-1405
, as well as the applicable provisions in this
chapter.
(b) If a conflict exists between a provision of the limited liability company law and a
provision of this chapter, this chapter controls.
(c) The provisions of this title pertaining to a merger, consolidation, conversion,
mutualization, and redomestication apply in determining the procedures to be followed by a
captive insurance company in carrying out any of the transactions described in those
provisions.
(d) Notwithstanding Subsection (16)(c), the commissioner may waive or modify the
requirements for public notice and hearing in accordance with rules adopted under Section
31A-37-106
.
(e) If a notice of public hearing is required, but no one requests a hearing, the
commissioner may cancel the public hearing.
[
(12)
] 
(17)
 (a) A captive insurance company formed as a reciprocal insurer under this
chapter has the powers set forth in Section 
31A-4-114
 in addition to the applicable provisions
of this chapter.
(b) If a conflict exists between the provisions of Section 
31A-4-114
 and the provisions
of this chapter with respect to a captive insurance company, this chapter shall control.
(c) To the extent a reciprocal insurer is made subject to other provisions of this title
pursuant to Section 
31A-14-208
, the provisions are not applicable to a reciprocal insurer
formed under this chapter unless the provisions are expressly made applicable to a captive
insurance company under this chapter.
(d) In addition to the provisions of this Subsection [
(12)
] 
(17)
, a captive insurance
company organized as a reciprocal insurer that is an industrial insured group has the privileges
of Section 
31A-4-114
 in addition to applicable provisions of this title.
[
(13)
] 
(18) (a)
 The articles of incorporation or bylaws of a captive insurance company
formed as a corporation
 may not authorize a quorum of a board of directors to consist of fewer
than one-third of the fixed or prescribed number of directors as provided in Section
16-10a-824
.
(b) The certificate of organization of a captive insurance company formed as a limited
liability company may not authorize a quorum of a board of managers to consist of fewer than
one-third of the fixed or prescribed number of directors required in Section 
16-10a-824
.
Section 43. Section 
31A-37-302
 is amended to read:
31A-37-302.
Investment requirements.
(1) (a) Except as provided in Subsection (1)(b), an association captive insurance
company, a sponsored captive insurance company, and an industrial insured group shall
comply with the investment requirements contained in this title.
(b) Notwithstanding Subsection (1)(a) and any other provision of this title, the
commissioner may approve the use of alternative reliable methods of valuation and rating
under Section 
31A-37-106
 for:
(i) an association captive insurance company;
(ii) a sponsored captive insurance company; or
(iii) an industrial insured group.
(2) (a) Except as provided in Subsection (2)(b), a pure captive insurance company or
industrial insured captive insurance company is not subject to any restrictions on allowable
investments contained in this title.
(b) Notwithstanding Subsection (2)(a), the commissioner may, under Section
31A-37-106
, prohibit or limit an investment that threatens the solvency or liquidity of:
(i) a pure captive insurance company; or
(ii) an industrial insured captive insurance company.
(3) (a) (i) Except as provided in Subsection (3)(a)(ii), a captive insurance company may
not make loans to:
(A) the parent company of the captive insurance company; or
(B) an affiliate of the captive insurance company.
(ii) Notwithstanding Subsection (3)(a)(i), a pure captive insurance company may make
loans to:
(A) the parent company of the pure captive insurance company; or
(B) an affiliate of the pure captive insurance company.
(b) A loan under Subsection (3)(a):
(i) may be made only on the prior written approval of the commissioner; and
(ii) shall be evidenced by a note in a form approved by the commissioner.
(c) A pure captive insurance company may not make a loan from[
: (i)
] the paid-in
capital required under Subsection 
31A-37-204
(1)[
; or
]
.
[
(ii) the free surplus required under Subsection 
31A-37-205
(1).
]
Section 44. Section 
31A-37-303
 is amended to read:
31A-37-303.
Reinsurance.
(1) A captive insurance company may provide reinsurance, as authorized in this title,
on risks ceded [
by any other insurer
] 
for the benefit of a parent, affiliate, or controlled
unaffiliated business
.
(2) (a) A captive insurance company may take credit for reserves on risks or portions of
risks ceded to reinsurers if the captive insurance company complies with Section 
31A-17-404
.
(b) Unless the reinsurer is in compliance with Section 
31A-17-404
, a captive insurance
company may not take credit for:
(i) reserves on risks ceded to a reinsurer; or
(ii) portions of risks ceded to a reinsurer.
Section 45. Section 
31A-37-306
 is amended to read:
31A-37-306.
Conversion or merger.
(1) An association captive insurance company or industrial insured group formed as a
stock or mutual corporation may be:
(a) converted to a reciprocal insurer in accordance with a plan and this section; or
(b) merged with and into a reciprocal insurer in accordance with a plan and this
section.
(2) An association captive insurance company or industrial group formed as a limited
liability company may be:
(a) converted to a reciprocal insurer in accordance with a plan and this section; or
(b) merged with and into a reciprocal insurer in accordance with a plan and this
section.
[
(2)
] 
(3)
 A plan for a conversion or merger under this section:
(a) shall be fair and equitable to:
(i) the shareholders, in the case of a stock insurer; [
or
]
(ii) the policyholders, in the case of a mutual insurer; and
(iii) the members, in the case of a limited liability company insurer; and
(b) shall provide for the purchase of:
(i) the shares of any nonconsenting shareholder of a stock insurer in substantially the
same manner and subject to the same rights and conditions as are provided a dissenting
shareholder; or
(ii) the policyholder interest of any nonconsenting policyholder of a mutual insurer in
substantially the same manner and subject to the same rights and conditions as are provided a
dissenting policyholder.
[
(3)
] 
(4)
 In the case of a conversion authorized under Subsection (1) 
or (2)
:
(a) the conversion shall be accomplished under a reasonable plan and procedure that
are approved by the commissioner;
(b) the commissioner may not approve the plan of conversion under this section unless
the plan:
(i) satisfies Subsections [
(2)
] 
(3)
 and [
(6)
] 
(7)
;
(ii) provides for the conversion of existing stockholder [
or
]
,
 policyholder
, or member
interests into subscriber interests in the resulting reciprocal insurer, proportionate to
stockholder [
or
]
,
 policyholder
, or member
 interests in the stock or mutual insurer 
or limited
liability company
; and
(iii) is approved:
(A) in the case of a stock insurer, by a majority of the shares entitled to vote
represented in person or by proxy at a duly called regular or special meeting at which a quorum
is present; [
or
]
(B) in the case of a mutual insurer, by a majority of the voting interests of
policyholders represented in person or by proxy at a duly called regular or special meeting at
which a quorum is present; 
or
(C) in the case of a limited liability company insurer, by a majority of the voting
managers represented in person or by proxy at a duly called regular or special meeting at which
a quorum is present;
(c) the commissioner shall approve a plan of conversion if the commissioner finds that
the conversion will promote the general good of the state in conformity with the standards
under [
Subsection
] 
Section
31A-37-301
[
(4)
];
(d) if the commissioner approves a plan of conversion, the commissioner shall amend
the converting insurer's certificate of authority to reflect conversion to a reciprocal insurer and
issue the amended certificate of authority to the company's attorney-in-fact;
(e) upon issuance of an amended certificate of authority of a reciprocal insurer by the
commissioner, the conversion is effective; and
(f) upon the effectiveness of the conversion:
(i) the corporate existence of the converting insurer shall cease; and
(ii) the resulting reciprocal insurer shall notify the Division of Corporations and
Commercial Code of the conversion.
[
(4)
] 
(5)
 A merger authorized under Subsection (1) 
or (2)
 shall be accomplished
substantially in accordance with the procedures set forth in this title except that, solely for
purposes of the merger:
(a) the plan or merger shall satisfy Subsection [
(2)
] 
(3)
;
(b) the subscribers' advisory committee of a reciprocal insurer shall be equivalent to the
board of directors of a stock or mutual insurance company;
(c) the subscribers of a reciprocal insurer shall be the equivalent of the policyholders of
a mutual insurance company;
(d) if a subscribers' advisory committee does not have a president or secretary, the
officers of the committee having substantially equivalent duties are the president and secretary
of the committee;
(e) the commissioner shall approve the articles of merger if the commissioner finds that
the merger will promote the general good of the state in conformity with the standards under
[
Subsection
] 
Section
31A-37-301
[
(4)
];
(f) notwithstanding [
Sections
] 
Section
31A-37-204
 [
and 
31A-37-205
], the
commissioner may permit the formation, without capital and surplus, of a captive insurance
company organized as a reciprocal insurer, into which an existing captive insurance company
may be merged to facilitate a transaction under this section, if there is no more than one
authorized insurance company surviving the merger; and
(g) an alien insurer may be a party to a merger authorized under Subsection (1) 
or (2)
if:
(i) the requirements for the merger between a domestic and a foreign insurer under
Chapter 16, Insurance Holding Companies, are applied to the merger; and
(ii) the alien insurer is treated as a foreign insurer under Chapter 16, Insurance Holding
Companies.
[
(5)
] 
(6)
 If the commissioner approves the articles of merger under this section:
(a) the commissioner shall endorse the commissioner's approval on the articles; and
(b) the surviving insurer shall present the name to the Division of Corporations and
Commercial Code.
[
(6)
] 
(7)
 (a) Except as provided in Subsection [
(6)
] 
(7)
(b), a conversion authorized
under Subsection (1) shall provide for a hearing, of which notice has been given to the insurer,
its directors, officers and stockholders, in the case of a stock insurer, or policyholders, in the
case of a mutual insurer, all of whom have the right to appear at the hearing.
(b) Notwithstanding Subsection [
(6)
] 
(7)
(a), the commissioner may waive or modify
the requirements for the hearing.
(c) If a notice of hearing is required, but no hearing is requested, after notice has been
given under Subsection [
(6)
] 
(7)
(a), the commissioner may cancel the hearing.
Section 46. Section 
31A-37-401
 is amended to read:
31A-37-401.
Sponsored captive insurance companies -- Formation.
(1) One or more sponsors may form a sponsored captive insurance company under this
chapter.
(2) A sponsored captive insurance company formed under this chapter may establish
and maintain a protected cell to insure risks of a participant if:
(a) the shareholders of a sponsored captive insurance company are limited to:
(i) the participants of the sponsored captive insurance company; and
(ii) the sponsors of the sponsored captive insurance company;
(b) each protected cell is accounted for separately on the books and records of the
sponsored 
cell
 captive insurance company to reflect:
(i) the financial condition of [
the
] 
each individual
 protected cell;
(ii) the results of operations of [
the
] 
each individual
 protected cell;
(iii) the net income or loss of [
the
] 
each individual
 protected cell;
(iv) the dividends or other distributions to participants of [
the
] 
each individual
protected cell; and
(v) other factors that may be:
(A) provided in the participant contract; or
(B) required by the commissioner;
(c) the assets of a protected cell are not chargeable with liabilities arising out of any
other insurance business the sponsored captive insurance company may conduct;
(d) a sale, exchange, or other transfer of assets is not made by the sponsored captive
insurance company between or among any of the protected cells of the sponsored captive
insurance company without the consent of the protected cells;
(e) a sale, exchange, transfer of assets, dividend, or distribution is not made from a
protected cell to a sponsor or participant without the commissioner's approval, which may not
be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or
impairment with respect to a protected cell;
(f) a sponsored captive insurance company annually files with the commissioner
financial reports the commissioner requires under Section 
31A-37-106
, including accounting
statements detailing the financial experience of each protected cell;
(g) a sponsored captive insurance company notifies the commissioner in writing within
10 business days of a protected cell that is insolvent or otherwise unable to meet the claim or
expense obligations of the protected cell;
(h) a participant contract does not take effect without the commissioner's prior written
approval; [
and
]
(i) the addition of each new protected cell and withdrawal of a participant of any
existing protected cell does not take effect without the commissioner's prior written
approval[
.
]
; and
(j) (i) a protected cell captive insurance company shall pay to the department the
following nonrefundable fees established by the department under Sections 
31A-3-103
,
31A-3-304
, and 
63J-1-504
:
(A) a fee for examining, investigating, and processing by a department employee of an
application for a certificate of authority made by a protected cell captive insurance company;
(B) a fee for obtaining a certificate of authority for the year the protected cell captive
insurance company is issued a certificate of authority by the department; and
(C) a certificate of authority renewal fee; and
(ii) a protected cell may be created by the sponsor or the sponsor may create a pooling
insurance arrangement to provide for pooling of risks to allow for risk distribution upon written
approval from every protected cell under the sponsor and written approval of the
commissioner.
Section 47. Section 
31A-37-402
 is amended to read:
31A-37-402.
Sponsored captive insurance companies -- Certificate of authority
mandatory.
(1) A sponsor of a sponsored captive insurance company shall be:
(a) an insurer authorized or approved under the laws of a state;
(b) a reinsurer authorized or approved under the laws of a state;
(c) a captive insurance company holding a certificate of authority under this chapter;
(d) an insurance holding company that:
(i) controls an insurer licensed pursuant to the laws of a state; and
(ii) is subject to registration pursuant to the holding company system of laws of the
state of domicile of the insurer described in Subsection (1)(d)(i); [
or
]
(e) an approved captive management firm in Utah or its affiliates; or
[
(e)
] 
(f)
 another person approved by the commissioner after finding that the approval of
the person as a sponsor is not inconsistent with the purposes of this chapter.
(2) (a) The business written by a sponsored captive insurance company with respect to
a protected cell shall be fronted by 
the sponsor insurance company through a controlled
unaffiliated contract or
 an insurer that is:
(i) authorized or approved:
(A) under the laws of a state; or
(B) under any jurisdiction if the insurance company is a wholly owned subsidiary of an
insurance company licensed pursuant to the laws of a state;
(ii) reinsured by a reinsurer authorized or approved by this state; or
(iii) subject to Subsection (2)(b), secured by a trust fund:
(A) in the United States;
(B) for the benefit of policyholders and claimants; [
and
]
(C) funded by an irrevocable letter of credit or other asset acceptable to the
commissioner[
.
]
; and
(D) held by the sponsor as provided in Subsection 
31A-17-404
(1).
(b) (i) The amount of security provided by the trust fund described in Subsection
(2)(a)(iii) may not be less than the reserves associated with the liabilities of the trust fund,
including:
(A) reserves for losses;
(B) allocated loss adjustment expenses;
(C) incurred but unreported losses; and
(D) unearned premiums for business written through the participant's protected cell.
(ii) The commissioner may require the sponsored captive insurance company to
increase the funding of a trust established pursuant to this Subsection (2).
(iii) If the form of security in the trust described in Subsection (2)(a)(iii) is a letter of
credit, the letter of credit shall be established, issued, or confirmed by a bank that is:
(A) chartered in this state;
(B) a member of the federal reserve system; or
(C) chartered by another state if that state-chartered bank is acceptable to the
commissioner.
(iv) A trust and trust instrument maintained pursuant to this Subsection (2) shall be in a
form and upon terms approved by the commissioner.
(3) A risk retention group may not be either a sponsor or a participant of a sponsored
captive insurance company.
Section 48. Section 
31A-37-403
 is amended to read:
31A-37-403.
Participants in sponsored captive insurance companies.
(1) Any of the following may be a participant in a sponsored captive insurance
company holding a certificate of authority under this chapter:
(a) an association;
(b) a corporation 
that is for profit or nonprofit
;
(c) a limited liability company;
(d) a partnership;
(e) a trust; or
(f) any other business entity.
(2) A sponsor may be a participant in a sponsored captive insurance company.
(3) A participant need not be:
(a) a shareholder of the sponsored captive insurance company; or
(b) an affiliate of the sponsored captive insurance company.
(4) A participant shall insure only the participant's own risks through a sponsored
captive insurance company unless otherwise approved by the commissioner.
Section 49. Section 
31A-37-404
 is amended to read:
31A-37-404.
Discounting of loss and loss adjustment expense reserves.
(1) [
The following
] 
A sponsored captive insurance company
 may discount its loss and
loss adjustment expense reserves at treasury rates applied to the applicable payments projected
through the use of the expected payment pattern associated with the reserves[
:
]
.
[
(a) a sponsored captive insurance company; and
]
[
(b) a captive reinsurance company.
]
(2) (a) [
The following
] 
A sponsored captive insurance company
 shall annually file with
the department an actuarial opinion provided by an independent actuary on loss and loss
adjustment expense reserves[
:
]
.
[
(i) a sponsored captive insurance company; and
]
[
(ii) a captive reinsurance company.
]
(b) The independent actuary described in Subsection (2)(a) may not be an employee of:
(i) the company filing the actuarial opinion; or
(ii) an affiliate of the company filing the actuarial opinion.
(3) The commissioner may disallow the discounting of reserves by [
the following
] 
a
sponsored captive insurance company
 if the 
sponsored captive insurance
 company violates this
title[
:
]
.
[
(a) a sponsored captive insurance company; or
]
[
(b) a captive reinsurance company.
]
Section 50. Section 
31A-37-501
 is amended to read:
31A-37-501.
Reports to commissioner.
(1) A captive insurance company is not required to make a report except those
provided in this chapter.
(2) (a) Before March 1 of each year, a captive insurance company shall submit to the
commissioner a report of the financial condition of the captive insurance company, verified by
oath of two of the executive officers of the captive insurance company.
(b) Except as provided in [
Sections
] 
Section
31A-37-204
 [
and 
31A-37-205
], a captive
insurance company shall report:
(i) using generally accepted accounting principles, except to the extent that the
commissioner requires, approves, or accepts the use of a statutory accounting principle;
(ii) using a useful or necessary modification or adaptation to an accounting principle
that is required, approved, or accepted by the commissioner for the type of insurance and kind
of insurer to be reported upon; and
(iii) supplemental or additional information required by the commissioner.
(c) Except as otherwise provided:
(i) a licensed captive insurance company shall file the report required by Section
31A-4-113
; and
(ii) an industrial insured group shall comply with Section 
31A-4-113.5
.
(3) (a) A pure captive insurance company may make written application to file the
required report on a fiscal year end that is consistent with the fiscal year of the parent company
of the pure captive insurance company.
(b) If the commissioner grants an alternative reporting date for a pure captive insurance
company requested under Subsection (3)(a), the annual report is due 60 days after the fiscal
year end.
(4) (a) Sixty days after the fiscal year end, a branch captive insurance company shall
file with the commissioner a copy of the reports and statements required to be filed under the
laws of the jurisdiction in which the alien captive insurance company is formed, verified by
oath by two of the alien captive insurance company's executive officers.
(b) If the commissioner is satisfied that the annual report filed by the alien captive
insurance company in the jurisdiction in which the alien captive insurance company is formed
provides adequate information concerning the financial condition of the alien captive insurance
company, the commissioner may waive the requirement for completion of the annual statement
required for a captive insurance company under this section with respect to business written in
the alien jurisdiction.
(c) A waiver by the commissioner under Subsection (4)(b):
(i) shall be in writing; and
(ii) is subject to public inspection.
(5) Before March 1 of each year, a sponsored cell captive insurance company shall
submit to the commissioner a consolidated report of the financial condition of each individual
protected cell, including a financial statement for each protected cell.
Section 51. Section 
31A-37-502
 is amended to read:
31A-37-502.
Examination.
(1) (a) As provided in this section, the commissioner
,
 or a person appointed by the
commissioner, shall examine each captive insurance company in each [
three-year
] 
five-year
period.
(b) The [
three-year
] 
five-year
 period described in Subsection (1)(a) shall be determined
on the basis of [
three
] 
five
 full annual accounting periods of operation.
(c) The examination is to be made as of:
(i) December 31 of the full three-year period; or
(ii) the last day of the month of an annual accounting period authorized for a captive
insurance company under this section.
(d) In addition to an examination required under this Subsection (1), the commissioner,
or a person appointed by the commissioner may examine a captive insurance company
whenever the commissioner determines it to be prudent.
(2) During an examination under this section the commissioner, or a person appointed
by the commissioner, shall thoroughly inspect and examine the affairs of the captive insurance
company to ascertain:
(a) the financial condition of the captive insurance company;
(b) the ability of the captive insurance company to fulfill the obligations of the captive
insurance company; and
(c) whether the captive insurance company has complied with this chapter.
[
(3) The commissioner upon application may enlarge the three-year period described in
Subsection (1) to five years, if a captive insurance company is subject to a comprehensive
annual audit during that period:
]
[
(a) of a scope satisfactory to the commissioner; and
]
[
(b) performed by independent auditors approved by the commissioner.
]
[
(4)
] 
(3)
 The commissioner may accept a comprehensive annual independent audit in
lieu of an examination:
(a) of a scope satisfactory to the commissioner; and
(b) performed by an independent auditor approved by the commissioner.
[
(5)
] 
(4)
 A captive insurance company that is inspected and examined under this
section shall pay, as provided in Subsection 
31A-37-202
(6)(b), the expenses and charges of an
inspection and examination.
Section 52. Section 
31A-37-505
 is amended to read:
31A-37-505.
Suspension or revocation -- Grounds.
(1) The commissioner may suspend or revoke the certificate of authority of a captive
insurance company to conduct an insurance business in this state for:
(a) insolvency or impairment of capital or surplus;
(b) failure to meet the requirements of Section 
31A-37-204
 [
or 
31A-37-205
];
(c) refusal or failure to submit:
(i) an annual report required by Section 
31A-37-501
; or
(ii) any other report or statement required by law or by lawful order of the
commissioner;
(d) failure to comply with the charter, bylaws, or other organizational document of the
captive insurance company;
(e) failure to submit to:
(i) an examination under Section 
31A-37-502
; or
(ii) any legal obligation relative to an examination under Section 
31A-37-502
;
(f) refusal or failure to pay the cost of examination under Section 
31A-37-502
;
(g) use of methods that, although not otherwise specifically prohibited by law, render:
(i) the operation of the captive insurance company detrimental to the public or the
policyholders of the captive insurance company; or
(ii) the condition of the captive insurance company unsound with respect to the public
or to the policyholders of the captive insurance company; or
(h) failure otherwise to comply with laws of this state.
(2) Notwithstanding any other provision of this title, if the commissioner finds, upon
examination, hearing, or other evidence, that a captive insurance company has committed any
of the acts specified in Subsection (1), the commissioner may suspend or revoke the certificate
of authority of the captive insurance company if the commissioner considers it in the best
interest of the public and the policyholders of the captive insurance company to revoke the
certificate of authority.
Section 53. Section 
31A-43-301
 is amended to read:
31A-43-301.
Stop-loss insurance coverage standards.
(1) A small employer stop-loss insurance contract shall:
(a) be issued to the small employer to provide insurance to the group health benefit
plan, not the employees of the small employer;
[
(b) use a standard application form developed by the commissioner by administrative
rule;
]
[
(c)
] 
(b)
 have a contract term with guaranteed rates for at least 12 months, without
adjustment, unless there is a change in the benefits provided under the small employer's health
plan during the contract period;
[
(d)
] 
(c)
 include both a specific attachment point and an aggregate attachment point in
a contract;
[
(e)
] 
(d)
 align stop-loss plan benefit limitations and exclusions with a small employer's
health plan benefit limitations and exclusions, including any annual or lifetime limits in the
employer's health plan;
[
(f)
] 
(e)
 have an annual specific attachment point that is at least $10,000;
[
(g)
] 
(f)
 have an annual aggregate attachment point that may not be less than 85% of
expected claims;
[
(h)
] 
(g)
 pay stop-loss claims:
(i) incurred during the contract period; and
(ii) paid within 12 months after the expiration date of the contract; and
[
(i)
] 
(h)
 include provisions to cover incurred and unpaid 
stop-loss
 claims [
if a
] 
when
the
 small [
employer
] 
employer's stop-loss
 plan terminates.
(2) A small employer stop-loss contract shall not:
(a) include lasering; and
(b) pay claims directly to an individual employee, member, or participant.
Section 54. Section 
63I-2-231
 is amended to read:
63I-2-231.
Repeal dates, Title 31A.
(1) Section 
31A-22-315.5
 is repealed July 1, 2016.
(2) Title 31A, Chapter 42, Defined Contribution Risk Adjuster Act, is repealed July 1,
[
] 
.
Section 55. 
Repealer.
This bill repeals:
Section 
31A-37-205
,
Free surplus.
Section 
31A-37-601
,
Incorporation of a captive reinsurance company.
Section 
31A-37-602
,
Requirements of a captive reinsurance company.
Section 
31A-37-603
,
Minimum capitalization or reserves for a captive reinsurance
company.
Section 
31A-37-604
,
Management of assets of a captive reinsurance company.
Section 56. 
Effective date.
This bill takes effect on May 12, 2015, except that:
(1) the amendments in this bill to Section 
31A-3-304
 (Effective 07/01/15) take effect
on July 1, 2015; and
(2) the actions affecting the following sections in this bill take effect on October 1,
2015:
(a) Section 
31A-16-102.5
;
(b) Section 
31A-16-103
;
(c) Section 
31A-16-104.5
;
(d) Section 
31A-16-105
;
(e) Section 
31A-16-106
;
(f) Section 
31A-16-107.5
;
(g) Section 
31A-16-108.5
;
(h) Section 
31A-16-109
;
(i) Section 
31A-16-112
;
(j) Section 
31A-16-113
;
(k) Section 
31A-16-114
;
(l) Section 
31A-16-115
;
(m) Section 
31A-16-116
;
(n) Section 
31A-16-117
;
(o) Section 
31A-16-118
; and
(p) Section 
31A-16-119
.
Section 57. 
 Coordinating H.B. 24 with S.B. 294 -- Substantive amendments.
If this H.B. 24 and S.B. 294, Transportation Network Company Amendments, both pass
and become law, it is the intent of the Legislature that the Office of Legislative Research and
General Counsel, in preparing the Utah Code database for publication do the following:
(1) delete Section 
13-51-108
 enacted in S.B. 294;
(2) delete Subsection (1) of Section 
31A-22-322
 enacted in this bill and renumber
remaining subsections accordingly and change internal cross references;
(3) delete Subsection (14) enacted in Section 
31A-22-322
; and
(4) renumber Section 
31A-22-322
 enacted in this bill to be Section 
13-51-108
.