Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 36 Second Substitute (2016GS)

Sponsor

Rep. Dunnigan, J.

Final action

Governor Signed 3/22/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• corrects citations;
• amends definitions;
• modifies language related to comparison tables;
• addresses compliance with PPACA and administrative rules;
• addresses application of vehicle protection product warranties under the statute;
• modifies the Risk Retention Groups Act, including:
• amending definitions;
• imposing requirements on risk retention groups chartered in this state;
• providing that countersignatures are not required;
• addressing purchasing groups;
• addressing the role of producers; and
• granting rulemaking authority;
• addresses credit allowed a domestic ceding insurer against reserves for reinsurance;

Every vote on this bill

Bill text

INSURANCE REVISIONS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: James A. Dunnigan
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill modifies provisions related to insurance.
Highlighted Provisions:
This bill:
▸ corrects citations;
▸ amends definitions;
▸ modifies language related to comparison tables;
▸ addresses compliance with PPACA and administrative rules;
▸ addresses application of vehicle protection product warranties under the statute;
▸ modifies the Risk Retention Groups Act, including:
• amending definitions;
• imposing requirements on risk retention groups chartered in this state;
• providing that countersignatures are not required;
• addressing purchasing groups;
• addressing the role of producers; and
• granting rulemaking authority;
▸ addresses credit allowed a domestic ceding insurer against reserves for reinsurance;
▸ lists in what form security may be in for purposes of asset or reduction from liability
for reinsurance ceded by a domestic insurer to another assuming insurer;
▸ addresses rulemaking authority of the commissioner;
▸ provides when a motor vehicle liability policy may be rescinded or cancelled;
▸ modifies reference to husband and wife;
▸ addresses insurance for alcohol and drug dependency treatment;
▸ provides that violation of an order by a regulatory agency in any jurisdiction may be
grounds for discipline;
▸ addresses continuing education requirements;
▸ provides that a person's variable contracts line of authority is cancelled when that
person's securities license is no longer active;
▸ addresses insurer's liability if the insured pays a premium to a licensee or group
policyholder;
▸ addresses licensee compensation disclosures;
▸ addresses exemption from claims filing requirements;
▸ modifies citations related to allowance of contingent and unliquidated claims;
▸ amends training requirements for insurance producers related to the Health
Insurance Exchange;
▸ requires insurers to have antifraud plans;
▸ amends definitions related to captive insurers;
▸ addresses the application of the Risk Retention Groups Act to captive insurers;
▸ modifies provisions related to reinsurance and captive insurance companies;
▸ amends reporting requirements for captive insurance companies;
▸ clarifies timing of examinations of captive insurance companies;
▸ addresses assessments related to title insurance;
▸ modifies provisions related to the Title Insurance Recovery, Education, and
Research Fund Act;
▸ modifies the repeal date for specified statutory provisions;
▸ repeals provisions related to employee welfare funds and plans;
▸ repeals provisions related to credit allowed a foreign ceding insurer;
▸ makes technical and conforming amendments;
▸ reauthorizes the Health Reform Task Force until December 30, 2017; and
▸ amends the duties of the task force.
Money Appropriated in this Bill:
This bill appropriates in fiscal year 2016-2017:
▸ To the Senate, as one-time appropriation:
• from the General Fund, $13,000, to pay for the Health Reform Task Force; and
▸ To the House of Representatives, as a one-time appropriation:
• from the General Fund, $22,000, to pay for the Health Reform Task Force.
Other Special Clauses:
This bill provides a repeal date.
Utah Code Sections Affected:
AMENDS:
13-51-108
, as enacted by Laws of Utah 2015, Chapter 244 and last amended by
Coordination Clause, Laws of Utah 2015, Chapter 244
31A-1-301
, as last amended by Laws of Utah 2015, Chapters 244 and 330
31A-2-208.5
, as enacted by Laws of Utah 1990, Chapter 129
31A-2-212
, as last amended by Laws of Utah 2015, Chapter 283
31A-2-309
, as last amended by Laws of Utah 2008, Chapter 257
31A-6a-101
, as last amended by Laws of Utah 2015, Chapter 244
31A-6a-104
, as last amended by Laws of Utah 2015, Chapter 244
31A-15-202
, as last amended by Laws of Utah 2010, Chapter 324
31A-15-203
, as last amended by Laws of Utah 2011, Chapter 297
31A-15-204
, as last amended by Laws of Utah 2003, Chapter 298
31A-15-208
, as last amended by Laws of Utah 2010, Chapter 10
31A-15-209
, as enacted by Laws of Utah 1992, Chapter 258
31A-15-212
, as last amended by Laws of Utah 2003, Chapter 298
31A-17-404
, as last amended by Laws of Utah 2008, Chapter 257
31A-17-404.1
, as enacted by Laws of Utah 2008, Chapter 257
31A-17-404.3
, as enacted by Laws of Utah 2008, Chapter 257
31A-22-202
, as enacted by Laws of Utah 1985, Chapter 242
31A-22-603
, as last amended by Laws of Utah 2001, Chapter 116
31A-22-715
, as last amended by Laws of Utah 2001, Chapter 116
31A-22-1201
, as last amended by Laws of Utah 2008, Chapter 257
31A-23a-111
, as last amended by Laws of Utah 2012, Chapter 253
31A-23a-202
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-23a-206
, as last amended by Laws of Utah 2012, Chapter 253
31A-23a-410
, as last amended by Laws of Utah 2009, Chapter 349
31A-23a-501
, as last amended by Laws of Utah 2015, Chapter 195
31A-23b-401
, as enacted by Laws of Utah 2013, Chapter 341
31A-25-208
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-26-213
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-27a-601
, as enacted by Laws of Utah 2007, Chapter 309
31A-27a-605
, as enacted by Laws of Utah 2007, Chapter 309
31A-30-116
, as last amended by Laws of Utah 2015, Chapter 283
31A-30-209
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-37-102
, as last amended by Laws of Utah 2015, Chapter 244
31A-37-103
, as last amended by Laws of Utah 2011, Chapter 284
31A-37-204
, as last amended by Laws of Utah 2015, Chapter 244
31A-37-303
, as last amended by Laws of Utah 2015, Chapter 244
31A-37-501
, as last amended by Laws of Utah 2015, Chapter 244
31A-37-502
, as last amended by Laws of Utah 2015, Chapter 244
31A-40-208
, as last amended by Laws of Utah 2012, Chapter 169
31A-41-202
, as last amended by Laws of Utah 2015, Chapter 330
31A-41-301
, as last amended by Laws of Utah 2012, Chapter 253
31A-41-303
, as enacted by Laws of Utah 2008, Chapter 220
63I-2-231
, as last amended by Laws of Utah 2015, Chapter 244
ENACTS:
31A-15-206.5
, Utah Code Annotated 1953
31A-15-213.5
, Utah Code Annotated 1953
31A-31-112
, Utah Code Annotated 1953
REPEALS AND REENACTS:
31A-41-302
, as enacted by Laws of Utah 2008, Chapter 220
REPEALS:
31A-13-101
, as last amended by Laws of Utah 1986, Chapter 204
31A-13-102
, as enacted by Laws of Utah 1985, Chapter 242
31A-13-103
, as last amended by Laws of Utah 1986, Chapter 204
31A-13-104
, as enacted by Laws of Utah 1985, Chapter 242
31A-13-105
, as enacted by Laws of Utah 1985, Chapter 242
31A-13-106
, as enacted by Laws of Utah 1985, Chapter 242
31A-13-107
, as last amended by Laws of Utah 2007, Chapter 309
31A-13-108
, as enacted by Laws of Utah 1985, Chapter 242
31A-13-109
, as last amended by Laws of Utah 1986, Chapter 204
31A-17-404.2
, as enacted by Laws of Utah 2008, Chapter 257
Uncodified Material Affected:
ENACTS UNCODIFIED MATERIAL
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
13-51-108
 is amended to read:
13-51-108.
Insurance.
(1) 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
.
(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 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
.
(3) 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.
(4) A transportation network company and a transportation network driver may satisfy
the requirements of Subsections (1), (2), and (3) by:
(a) the transportation network driver purchasing coverage that complies with
Subsections (1), (2), and (3);
(b) the transportation network company purchasing, on the transportation network
driver's behalf, coverage that complies with Subsections (1), (2), and (3); or
(c) a combination of Subsections (4)(a) and (b).
(5) 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 (1), (2), or (3).
(6) Nothing in this section requires a personal automobile insurance policy to provide
coverage while a driver is providing transportation network services.
(7) If a transportation network company does not purchase a policy that complies with
Subsections (1), (2), and (3) on behalf of a transportation network driver, the transportation
network company shall verify that the driver has purchased a policy that complies with
Subsections (1), (2), and (3).
(8) An insurance policy that a transportation network company or a transportation
network driver maintains under Subsection (1) or (2):
(a) satisfies the security requirements of Section 
41-12a-301
; and
(b) may, along with insurance maintained under Subsection (3), be placed with:
(i) an insurer that is certified under Section 
31A-4-103
; or
(ii) a surplus lines insurer [
licensed
] 
eligible
 under Section [
31A-23a-104
]
31A-15-103
.
(9) An insurer that provides coverage for a transportation network driver explicitly for
the transportation network driver's transportation network services under Subsection (1) or (2)
shall have the duty to defend a liability claim arising from an occurrence while the
transportation network driver is providing transportation network services.
(10) (a) If insurance a transportation network driver maintains under Subsection (1),
(2), or (3) lapses or ceases to exist, a transportation network company shall provide coverage
complying with Subsection (1), (2), or (3) beginning with the first dollar of a claim.
(b) Subsection (10)(a) does not apply to comprehensive or collision insurance
otherwise required under Subsection (3) 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.
(11) (a) An insurance policy that a transportation network company or transportation
network driver maintains under Subsection (1) or (2) may not provide that coverage is
dependent on a transportation network driver's personal automobile insurance policy first
denying a claim.
(b) Subsection (11)(a) does not apply to coverage a transportation network company
provides under Subsection [
(9)
] 
(10)
 in the event a transportation network driver's coverage
under Subsection (1) or (2) lapses or ceases to exist.
(12) 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 (12)(a) excludes coverage according to the policy's terms.
Section 2. 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 (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" 
means the same as that term
 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 (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.
No.
 101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 
No.
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.
(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 property insurance" means insurance:
(a) offered in connection with an extension of credit; and
(b) that protects the property until the debt is paid.
(40) "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.
(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 (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[
,
]
:
(i) an owner who:
(A) works on a full-time basis; and
(B) has a normal work week of 30 or more hours; and
(ii)
 if the individual is included under a health benefit plan of a small employer:
[
(i)
] 
(A)
 a sole proprietor;
[
(ii)
] 
(B)
 a partner in a partnership; or
[
(iii)
] 
(C)
 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 
who does not meet the requirements of Subsection (52)(a)(i)
;
or
(iii) a dependent of an employer 
who does not meet the requirements of Subsection
(52)(a)(i)
.
(53) "Employee" means
:
(a)
 an individual employed by an employer[
.
]
; and
(b) an owner who meets the requirements of Subsection (52)(b)(i).
(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
.
(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.
(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.
(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.
(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.
(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.
(64) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
a position of public or private trust.
(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 (65)(a).
(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;
(o) a binder; or
(p) an outline of coverage.
(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.
(68) "Foreign insurer" means an insurer domiciled outside of this state, including an
alien insurer.
(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.
(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.
(71) "General lines of authority" include:
(a) the general lines of insurance in Subsection (72);
(b) title insurance under one of the following sublines of authority:
(i) title examination, 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.
(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.
(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.
(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.
(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.
(76) (a) Except as provided in Subsection (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.
(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.
(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.
(79) "Health Insurance Portability and Accountability Act" means the Health Insurance
Portability and Accountability Act of 1996, Pub. L. 
No.
 104-191, 110 Stat. 1936, as amended.
(80) "Income replacement insurance" or "disability income insurance" means insurance
written to provide payments to replace income lost from accident or sickness.
(81) "Indemnity" means the payment of an amount to offset all or part of an insured
loss.
(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.
(83) "Independently procured insurance" means insurance procured under Section
31A-15-104
.
(84) "Individual" means a natural person.
(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.
(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.
(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.
(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.
(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
(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
(89)(a) through (h) in a manner designed to evade this title.
(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.
(91) "Insurance holding company system" means a group of two or more affiliated
persons, at least one of whom is an insurer.
(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."
(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 (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.
(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
.
(95) "Interinsurance exchange" is defined in Subsection (148).
(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.
(97) 
(a)
 "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)
] 
(i)
 employed an average of at least 51 [
eligible
] employees on [
each
] business
[
day
] 
days
 during the preceding calendar year; and
[
(b)
] 
(ii)
 employs at least [
two employees
] 
one employee
 on the first day of the plan
year.
(b) The number of employees shall be determined using the method set forth in 26
U.S.C. Sec. 4980H(c)(2).
(98) "Late enrollee," with respect to an employer health benefit plan, means an
individual whose enrollment is a late enrollment.
(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.
(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.
(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 (111) for medical malpractice insurance;
(B) Subsection (139) for professional liability insurance; and
(C) Subsection (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 (111) for medical malpractice insurance;
(B) Subsection (139) for professional liability insurance; and
(C) Subsection (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.
(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.
(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.
(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.
(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.
(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.
(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.
(108) "Limited lines authority" includes the lines of insurance listed in Subsection
(107).
(109) "Limited lines producer" means a person who sells, solicits, or negotiates limited
lines insurance.
(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 (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.
(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.
(112) "Member" means a person having membership rights in an insurance
corporation.
(113) "Minimum capital" or "minimum required capital" means the capital that must be
constantly maintained by a stock insurance corporation as required by statute.
(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.
(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.
(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.
(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 (117)(b)(iii)(A) through (D); or
(F) other services given in Subsections 
31A-11-102
(1)(b) through (f).
(118) "Mutual" means a mutual insurance corporation.
(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.
(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.
(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.
(122) "Order" means an order of the commissioner.
(123) "Outline of coverage" means a summary that explains an accident and health
insurance policy.
(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.
(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.
(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.
(127) "Personal lines insurance" means property and casualty insurance coverage sold
for primarily noncommercial purposes to:
(a) an individual; or
(b) a family.
(128) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
(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 (129)(a) or (b), the calendar year.
(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.
(131) "Policyholder" means a person who controls a policy, binder, or oral contract by
ownership, premium payment, or otherwise.
(132) "Policy illustration" means a presentation or depiction that includes
nonguaranteed elements of a policy of life insurance over a period of years.
(133) "Policy summary" means a synopsis describing the elements of a life insurance
policy.
(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.
(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.
(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.
(137) "Principal officers" for a corporation means the officers designated under
Subsection 
31A-5-203
(3).
(138) "Proceeding" includes an action or special statutory proceeding.
(139) "Professional liability insurance" means insurance against legal liability incident
to the practice of a profession and provision of a professional service.
(140) (a) Except as provided in Subsection (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.
(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.
(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.
(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.
(144) (a) Except as provided in Subsection (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.
(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.
(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.
(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.
(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.
(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."
(150) "Reinsurer" means a person licensed in this state as an insurer with the authority
to assume reinsurance.
(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.
(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.
(153) "Rider" means an endorsement to:
(a) an insurance policy; or
(b) an insurance certificate.
[
(156)
] 
(154)
 "Secondary medical condition" means a complication related to an
exclusion from coverage in accident and health insurance.
[
(154)
] 
(155)
 (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 [
(154)
] 
(155)
(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)
] 
(156)
 "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)
] 
(156)
.
(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 (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.
(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.
(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.
(160) "Significant break in coverage" means a period of 63 consecutive days during
each of which an individual does not have creditable coverage.
(161) 
(a)
 "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)
] 
(i)
 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)
] 
(ii)
 employs at least one employee on the first day of the plan year.
(b) The number of employees shall:
(i) be determined using the method set forth in 26 U.S.C. Sec. 4980H(c)(2); and
(ii) include an owner described in Subsection (52)(b)(i).
(c) "Small employer" does not include a sole proprietor that does not employ at least
one employee.
(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.
(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.
(164) Subject to Subsection (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.
(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).
(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.
(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.
(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
.
(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.
(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.
(171) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
(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 (140).
(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.
(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.
(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 3. Section 
31A-2-208.5
 is amended to read:
31A-2-208.5.
Comparison tables.
(1) (a) The commissioner shall annually publish a table comparing the rates charged by
insurers for private passenger motor vehicle and homeowners insurance in this state.
(b) The comparison shall list the top 20 insurers writing the greatest volume by
premium dollar per calendar year and others requesting inclusion in the comparison.
(c) The commissioner shall develop at least four hypothetical examples of risk in
preparing the comparison.
(2) In conjunction with the rate comparison described in Subsection (1), the
commissioner shall publish:
(a) a table listing, for each insurer compared, the ratio of [
justified and questionable
]
confirmed
 complaints received by the department to the premium dollar amount written by the
insurer; and
(b) a table listing for each insurer the combined loss and expense ratio for the most
current year available.
(3) The department shall make copies of the tables available to the public at minimal or
no cost.
Section 4. Section 
31A-2-212
 is amended to read:
31A-2-212.
Miscellaneous duties.
(1) Upon issuance of an order limiting, suspending, or revoking a person's authority to
do business in Utah, and when the commissioner begins a proceeding against an insurer under
Chapter 27a, Insurer Receivership Act, the commissioner:
(a) shall notify by mail the producers of the person or insurer of whom the
commissioner has record; and
(b) may publish notice of the order or proceeding in any manner the commissioner
considers necessary to protect the rights of the public.
(2) When required for evidence in a legal proceeding, the commissioner shall furnish a
certificate of authority of a licensee to transact the business of insurance in Utah on any
particular date. The court or other officer shall receive the certificate of authority in lieu of the
commissioner's testimony.
(3) (a) On the request of an insurer authorized to do a surety business, the
commissioner shall furnish a copy of the insurer's certificate of authority to a designated public
officer in this state who requires that certificate of authority before accepting a bond.
(b) The public officer described in Subsection (3)(a) shall file the certificate of
authority furnished under Subsection (3)(a).
(c) After a certified copy of a certificate of authority is furnished to a public officer, it
is not necessary, while the certificate of authority remains effective, to attach a copy of it to any
instrument of suretyship filed with that public officer.
(d) Whenever the commissioner revokes the certificate of authority or begins a
proceeding under Chapter 27a, Insurer Receivership Act, against an insurer authorized to do a
surety business, the commissioner shall immediately give notice of that action to each public
officer who is sent a certified copy under this Subsection (3).
(4) (a) The commissioner shall immediately notify every judge and clerk of the courts
of record in the state when:
(i) an authorized insurer doing a surety business:
(A) files a petition for receivership; or
(B) is in receivership; or
(ii) the commissioner has reason to believe that the authorized insurer doing surety
business:
(A) is in financial difficulty; or
(B) has unreasonably failed to carry out any of its contracts.
(b) Upon the receipt of the notice required by this Subsection (4), it is the duty of the
judges and clerks to notify and require a person that files with the court a bond on which the
authorized insurer doing surety business is surety to immediately file a new bond with a new
surety.
(5) (a) The commissioner shall report to the Legislature in accordance with Section
63N-11-106
 [
prior to
] 
before
 adopting a rule authorized by Subsection (5)(b).
(b) The commissioner shall require an insurer that issues, sells, renews, or offers health
insurance coverage in this state to comply with [
the provisions of
] PPACA and administrative
rules adopted by the commissioner related to regulation of health benefit plans, including:
(i) lifetime and annual limits;
(ii) prohibition of rescissions;
(iii) coverage of preventive health services;
(iv) coverage for a child or dependent;
(v) pre-existing condition [
coverage for children
] 
limitations
;
(vi) insurer transparency of consumer information including plan disclosures, uniform
coverage documents, and standard definitions;
(vii) premium rate reviews;
(viii) essential health benefits;
(ix) provider choice;
(x) waiting periods;
(xi) appeals processes;
(xii) rating restrictions;
(xiii) uniform applications and notice provisions; [
and
]
(xiv) certification and regulation of qualified health plans[
.
]
; and
(xv) network adequacy standards.
(c) The commissioner shall preserve state control over:
(i) the health insurance market in the state;
(ii) qualified health plans offered in the state; and
(iii) the conduct of navigators, producers, and in-person assisters operating in the state.
(d) If the state enters into an agreement with the United States Department of Health
and Human Services in which the state operates health insurance plan management, the
commissioner may:
(i) for fiscal year 2014, hire one temporary and two permanent full-time employees to
be funded through the department's existing budget; and
(ii) for fiscal year 2015, hire two permanent full-time employees funded through the
Insurance Department Restricted Account, subject to appropriations from the Legislature and
approval by the governor.
Section 5. Section 
31A-2-309
 is amended to read:
31A-2-309.
Service of process through state officer.
(1) The commissioner, or the lieutenant governor when the subject proceeding is
brought by the state, is the agent for receipt of service of a summons, notice, order, pleading, or
other legal process relating to a Utah court or administrative agency upon the following:
(a) an insurer authorized to do business in this state, while authorized to do business in
this state, and thereafter in a proceeding arising from or related to a transaction having a
connection with this state;
(b) a surplus lines insurer for a proceeding arising out of a contract of insurance that is
subject to the surplus lines law, or out of a certificate, cover note, or other confirmation of that
type of insurance;
(c) an unauthorized insurer or other person assisting an unauthorized insurer under
Subsection 
31A-15-102
(1) by doing an act specified in Subsection 
31A-15-102
(2), for a
proceeding arising out of a transaction that is subject to the unauthorized insurance law;
(d) a nonresident producer, consultant, adjuster, or third party administrator, while
authorized to do business in this state, and thereafter in a proceeding arising from or related to
a transaction having a connection with this state; and
(e) a reinsurer submitting to the commissioner's jurisdiction under Subsection
31A-17-404
[
(8)
]
(9)
.
(2) The following is considered to have irrevocably appointed the commissioner and
lieutenant governor as that person's agents in accordance with Subsection (1):
(a) a licensed insurer by applying for and receiving a certificate of authority;
(b) a surplus lines insurer by entering into a contract subject to the surplus lines law;
(c) an unauthorized insurer by doing in this state an act prohibited by Section
31A-15-103
; and
(d) a nonresident producer, consultant, adjuster, and third party administrator.
(3) The commissioner and lieutenant governor are also agents for an executor,
administrator, personal representative, receiver, trustee, or other successor in interest of a
person specified under Subsection (1).
(4) A litigant serving process on the commissioner or lieutenant governor under this
section shall pay the fee applicable under Section 
31A-3-103
.
(5) The right to substituted service under this section does not limit the right to serve a
summons, notice, order, pleading, demand, or other process upon a person in another manner
provided by law.
Section 6. 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 Chapter 5, Domestic Stock and Mutual
Insurance Corporations, or 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.
(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.
(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.
(5) "Service contract holder" or "contract holder" means a person who purchases a
service contract.
(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.
(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 
or warrantor
 under the terms of the service contract 
or vehicle
protection product warranty
 issued by the provider 
or warrantor
.
(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 7. Section 
31A-6a-104
 is amended to read:
31A-6a-104.
Required disclosures.
(1) A service contract reimbursement insurance policy insuring a service contract 
or a
vehicle protection product warranty
 that is issued, sold, or offered for sale in this state shall
conspicuously state that, upon failure of the service contract provider 
or warrantor
 to perform
under the contract, the issuer of the policy shall:
(a) pay on behalf of the service contract provider 
or warrantor
 any sums the service
contract provider 
or warrantor
 is legally obligated to pay according to the service contract
provider's 
or warrantor's
 contractual obligations under the service contract 
or a vehicle
protection product warranty
 issued or sold by the service contract provider 
or warrantor
; 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."
(iii) 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."
(b) A vehicle protection product warranty may not be issued, sold, or offered for sale in
this state unless the vehicle protection product warranty contains the following statements in
substantially the following form:
(i) "Obligations of the warrantor under this vehicle protection product warranty are
guaranteed under a reimbursement insurance policy. Should the warrantor fail to pay on any
claim within 60 days after proof of loss has been filed, the warranty holder is entitled to make a
claim directly against the Insurance Company."; and
(ii) "This vehicle protection product 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."
]
(c) A vehicle protection product warranty, or reimbursement insurance policy, may not
be issued, sold, or offered for sale in this state unless the warranty contains a statement in
substantially the following form, "Coverage afforded under this warranty is not guaranteed by
the Property and Casualty Guaranty Association."
(3) A service contract 
and a vehicle protection product warranty
 shall:
(a) conspicuously state the name, address, and a toll free claims service telephone
number of the reimbursement insurer;
(b) 
(i)
 identify the service contract provider, the seller, and the service contract holder;
or
(ii) identify the warrantor, the seller, and the warranty holder;
(c) conspicuously state the total purchase price and the terms under which the service
contract 
or warranty
 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 
or warranty
; 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
] 
Subsections
 (3)
(d) and
 (g)
, (4), (5), and (6)
. 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 8. Section 
31A-15-202
 is amended to read:
31A-15-202.
Definitions.
As used in this part:
(1) [
"Completed
] 
Notwithstanding Section 
31A-1-301
, "commissioner" means the
insurance commissioner of Utah or the commissioner, director, or superintendent of insurance
in another state.
(2) (a) Subject to Subsection (2)(b), "completed
 operations liability" means liability[
,
including liability for activities which are completed or abandoned before the date of the
occurrence giving rise to the liability,
] arising out of the installation, maintenance, or repair of
any product at a site [
which
] 
that
 is not owned or controlled by:
[
(a)
] 
(i)
 any person who performs that work; or
[
(b)
] 
(ii)
 any person who hires an independent contractor to perform that work.
(b) "Completed operations liability" includes liability for an activity that is completed
or abandoned before the date of the occurrence giving rise to the liability.
[
(2)
] 
(3)
 "Domicile," for purposes of determining the state in which a purchasing group
is domiciled, means:
(a) for a corporation, the state in which the purchasing group is incorporated; and
(b) for an unincorporated entity, the state of its principal place of business.
[
(3)
] 
(4)
 "Hazardous financial condition" means that a risk retention group, based on its
present or reasonably anticipated financial condition, although not yet financially impaired or
insolvent, is unlikely to be able:
(a) to meet obligations to policyholders with respect to known claims and reasonably
anticipated claims; or
(b) to pay other obligations in the normal course of business.
[
(4)
] 
(5)
 "Insurance" means primary insurance, excess insurance, reinsurance, surplus
lines insurance, and any other arrangement for shifting and distributing risk which is
determined to be insurance under the laws of this state.
[
(5)
] 
(6)
 (a) "Liability" means legal liability for damages, including costs of defense,
legal costs and fees, and other claims expenses because of injuries to other persons, damage to
their property, or other damage or loss to other persons[
,
] resulting from or arising out of:
(i) any 
business, whether
 profit or nonprofit [
business
], trade, product, 
services,
including
 professional [
or other
] services, premises, or operations; or
(ii) any activity of any state or local government or any agency or political subdivision
of any state or local government.
(b) "Liability" does not include personal risk liability and an employer's liability with
respect to its employees other than legal liability under the Federal Employers' Liability Act
, 45
U.S.C. Sec. 51 et seq
.
[
(6) "NAIC" means the National Association of Insurance Commissioners.
]
(7) "Personal risk liability" means liability for damages because of injury to any person,
damage to property, or other loss or damage resulting from any personal, familial, or household
responsibilities or activities
,
 rather than from responsibilities or activities referred to in
Subsection [
(5)
] 
(6)
.
(8) "Plan of operation
"
 or [
a
] 
"
feasibility study" means an analysis [
which
] 
that
presents the expected activities and results of a risk retention group, including 
at a minimum
:
(a) information sufficient to verify that its members are engaged in businesses or
activities similar or related with respect to the liability to which 
the
 members are exposed by
virtue of any related, similar or common business, trade, product, services, premises or
operations;
(b) for each state in which it intends to operate, the coverages, deductibles, coverage
limits, rates, and rating classification systems for each line of insurance the group intends to
offer;
(c) historical and expected loss experience of the proposed members and national
experience of similar exposures to the extent that this experience is reasonably available;
(d) pro forma financial statements and projections;
(e) appropriate opinions by a qualified, independent casualty actuary, including a
determination of minimum premium or participation levels required to commence operations
and to prevent a hazardous financial condition;
(f) identification of management, underwriting and claims procedures, marketing
methods, managerial oversight methods, investment policies, and reinsurance agreements;
(g) identification of each state in which the risk retention group has obtained, or sought
to obtain, a charter and license, and a description of its status in each such state; and
(h) any other matters required by the commissioner of the state in which the risk
retention group is chartered for liability insurance companies authorized by the insurance laws
of that state.
(9) (a) "Product liability" means liability for damages because of any personal injury,
death, emotional harm, consequential economic damage, or property damage, including
damages resulting from the loss of use of property[
, if the liability arises
] 
arising
 out of the
manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product.
(b) "Product liability" does not include the liability of any person for those damages
described in Subsection (9)(a) if the product involved was in the possession of the person when
the incident giving rise to the claim occurred.
(10) "Purchasing group" means any group [
which
] 
that
:
(a) has as one of its purposes the purchase of liability insurance on a group basis;
(b) purchases liability insurance only for its group members and only to cover their
similar or related liability exposure, as described in Subsection (10)(c);
(c) is composed of members whose businesses or activities are similar or related with
respect to the liability to which members are exposed by virtue of any related, similar, or
common business, trade, products, services, premises, or operations; and
(d) is domiciled in any state.
(11) "Risk retention group" means any corporation or other limited liability
association:
(a) whose primary activity consists of assuming and spreading all, or any portion of,
the liability exposure of its group members;
(b) which is organized for the primary purpose of conducting the activity described
under Subsection (11)(a);
(c) [
which
] 
that
:
(i) is chartered and licensed as a liability insurance company and authorized to engage
in the business of insurance under the laws of any state; or
(ii) (A) before January 1, 1985, was chartered or licensed and authorized to engage in
the business of insurance under the laws of Bermuda or the Cayman Islands and, before
January 1, 1985, had certified to the insurance commissioner of at least one state that it
satisfied the capitalization requirements of that state;
(B) [
however,
] 
except that
 any [
such
] group as described in Subsection (11)(c)(ii)(A)
shall be considered to be a risk retention group only if it has been engaged in business
continuously since January 1, 1985, and only for the purpose of continuing to provide
insurance to cover product liability or completed operations liability, as these terms were
defined in the Product Liability Risk Retention Act of 1981 before the date of the enactment of
the Liability Risk Retention Act of 1986;
(d) [
which
] 
that
 does not exclude any person from membership in the group solely to
provide for members of the group a competitive advantage over the excluded person;
(e) [
which
] 
that
:
(i) has as its owners only persons who comprise the membership of the risk retention
group and who are provided insurance by the group; or
(ii) has as its sole owner an organization [
which
] 
that has as
:
(A) [
has as
] its members only persons who comprise the membership of the risk
retention group; and
(B) [
has as
] its owners only persons who comprise the membership of the risk retention
group and who are provided insurance by the group;
(f) whose members are engaged in businesses or activities similar or related with
respect to the liability to which the members are exposed by virtue of any related, similar, or
common business trade, products, services, premises or operations;
(g) whose activities do not include providing insurance other than:
(i) liability insurance for assuming and spreading all or any portion of the liability of its
group members; and
(ii) reinsurance with respect to the liability of any other risk retention group, or any
members of the other group, which is engaged in businesses or activities so that the group or
member meets the requirement described in Subsection (11)(f) for membership in the risk
retention group which provides the reinsurance; and
(h) the name of which includes the phrase "risk retention group."
(12) "State" means:
(a) a state of the United States; or
(b) the District of Columbia.
Section 9. Section 
31A-15-203
 is amended to read:
31A-15-203.
Risk retention groups chartered in this state.
(1) As used in this section:
(a) "Board of directors" or "board" means the governing body of the risk retention
group elected by the shareholders or members to establish policy, elect or appoint officers and
committees, and make other governing decisions.
(b) "Director" means a natural person designated in the articles of the risk retention
group, or designated, elected, or appointed by any other manner, name, or title to act as a
director.
[
(1)
] 
(2)
 (a) A risk retention group under this part shall be chartered and licensed to
write only liability insurance pursuant to this part and, except as provided elsewhere in this
part, shall comply with all of the laws, rules, and requirements that apply to liability insurers
chartered and licensed in this state, and with Section 
31A-15-204
 to the extent the requirements
are not a limitation on other laws, rules, or requirements of this state.
(b) Notwithstanding any other provision to the contrary, all risk retention groups
chartered in this state shall file 
with the commissioner and the National Association of
Insurance Commissioners
 an annual statement [
with the department and the NAIC
] in a form
prescribed by the commissioner[
,
] and [
completed in diskette form if required by the
commissioner,
] completed in accordance with the statement instructions and the [
NAIC
]
National Association of Insurance Commissioners
 Accounting Practices and Procedures
Manual.
[
(2)
] 
(3)
 Before it may offer insurance in any state, each risk retention group shall also
submit for approval to the commissioner 
of this state
 a plan of operation or feasibility study. 
The risk retention group shall submit an appropriate revision of the plan or study in the event of
any subsequent material change in any item of the plan 
of operation
 or 
feasibility
 study within
10 days of any [
such
] change. The group may not offer any additional kinds of liability
insurance, in this state or in any other state, until any revision of the plan or study is approved
by the commissioner.
[
(3)
] 
(4)
 (a) At the time of filing its application for charter, the risk retention group
shall provide to the commissioner in summary form the following information:
(i) the identity of the initial members of the group;
(ii) the identity of those individuals who organized the group or who will provide
administrative services or otherwise influence or control the activities of the group;
(iii) the amount and nature of initial capitalization;
(iv) the coverages to be afforded; and
(v) the states in which the group intends to operate.
(b) Upon receipt of this information
,
 the commissioner shall forward the information to
the [
NAIC
] 
National Association of Insurance Commissioners
. Providing notification to the
[
NAIC
] 
National Association of Insurance Commissioners
 is in addition to, and may not be
sufficient to satisfy, the requirements of Section 
31A-15-204
 or any other sections of this part.
(5) The governance standards for risk retention groups are as follows:
(a) A risk retention group that exists as of May 10, 2016, shall be in compliance with
the governance standards described in this Subsection (5) by no later than May 10, 2017. A
risk retention group licensed on or after May 10, 2016, shall be in compliance with the
governance standards described in this Subsection (5) at the time of licensure.
(b) The board of directors of a risk retention group shall have a majority of independent
directors. If the risk retention group is a reciprocal:
(i) the attorney-in-fact is required to adhere to the same standards regarding
independence of operation and governance as imposed on the risk retention group's board of
directors and subscribers advisory committee under these standards; and
(ii) to the extent permissible under state law, service providers of a reciprocal risk
retention group shall contract with the risk retention group and not the attorney-in-fact.
(c) A director does not qualify as independent unless the board of directors
affirmatively determines that the director has no material relationship with the risk retention
group. Each risk retention group shall disclose these determinations to its domestic regulator,
at least annually. For this purpose, any person who is a direct or indirect owner of, or
subscriber in, the risk retention group or is an officer, director, or employee of the owner and
insured, is considered to be independent, unless some other position of the officer, director, or
employee constitutes a material relationship, as contemplated by Section 3901(a)(4)(E)(ii) of
the Liability Risk Retention Act.
(d) Material relationship of a person with the risk retention group includes the
following:
(i) A material relationship exists if the person receives in any one 12-month period
compensation or payment of any other item of value by the person, a member of the person's
immediate family, or a business with which the person is affiliated, from the risk retention
group or a consultant or service provider to the risk retention group is greater than the greater
of the following as measured at the end of any fiscal quarter falling in the 12-month period:
(A) 5% of the risk retention group's gross written premium for the 12-month period; or
(B) 2% of the risk retention group's surplus.
(ii) The person or immediate family member of the person is not independent until one
year after the person's compensation from the risk retention group falls below the threshold
outlined in Subsection (5)(d)(i).
(iii) A material relationship exists if a director or an immediate family member of a
director is affiliated with or employed in a professional capacity by a present or former internal
or external auditor of the risk retention group.
(iv) The director or immediate family member of a director described in Subsection
(5)(d)(iii) is not independent until one year after the end of the affiliation, employment, or
auditing relationship.
(v) A material relationship exists if the director or immediate family member of a
director who is employed as an executive officer of another company where any of the risk
retention group's present executives serve on that other company's board of directors is not
independent until one year after the end of the service or the employment relationship.
(e) (i) The term of any material service provider contract with the risk retention group
may not exceed five years. A material service provider contract, or its renewal, shall require
the approval of the majority of the risk retention group's independent directors. The service
provider contract is considered material if the amount to be paid for the contract is greater than
or equal to the greater of:
(A) 5% of the risk retention group's annual gross written premium; or
(B) 2% of the risk retention group's surplus.
(ii) For purposes of Subsection (5)(e)(i), "service provider" includes a captive manager,
auditor, accountant, actuary, investment advisor, lawyer, managing general underwriter, or
other party responsible for underwriting, determining rates, collecting premiums, adjusting and
settling claims, or preparing financial statements. A reference to "lawyer" in this Subsection
(5)(e)(ii) does not include defense counsel retained by the risk retention group to defend
claims, unless the amount of fees paid to the lawyer is "material" as referenced in Section
(5)(e)(i).
(iii) A service provider contract meeting the definition of material relationship
contained in Section (5)(d) may not be entered into unless the risk retention group has, at least
days before entering into the service provider contract, notified the commissioner in writing
of its intention to enter into the transaction and the commissioner has not disapproved it within
the 30-day period.
(iv) The risk retention group's board of directors shall have the right to terminate any
service provider, audit contract, or actuarial contract at any time for cause after providing
adequate notice as defined in the contract.
(f) The risk retention group's board of directors shall adopt a written policy in the plan
of operation as approved by the board that requires the board to:
(i) assure that an owner of the risk retention group receive evidence of ownership
interest;
(ii) develop a set of governance standards applicable to the risk retention group;
(iii) oversee the evaluation of the risk retention group's management including the
performance of the captive manager, managing general underwriter, or one or more other
parties responsible for underwriting, determining rates, collecting premiums, adjusting or
settling claims, or preparing financial statements;
(iv) review and approve the amount to be paid for all material service providers; and
(v) review and approve at least annually:
(A) the risk retention group's goals and objectives relevant to the compensation of
officers and service providers;
(B) the officers' and service providers' performance in light of those goals and
objectives; and
(C) the continued engagement of the officers and material service providers.
(g) (i) A risk retention group shall have an audit committee composed of at least three
independent board members as defined in Subsection (5)(c). A non-independent board
member may participate in the activities of the audit committee, if invited by the members of
the audit committee, but cannot be a member of the audit committee.
(ii) The audit committee shall have a written charter that defines the audit committee's
purpose, which, at a minimum, shall be to:
(A) assist the board's oversight of the integrity of the financial statements, the
compliance with legal and regulatory requirements, and the qualifications, independence, and
performance of the independent auditor and actuary;
(B) discuss the annual audited financial statements and quarterly financial statements
with management;
(C) discuss the annual audited financial statements with its independent auditor and, if
advisable, discuss its quarterly financial statements with its independent auditor;
(D) discuss policies with respect to risk assessment and risk management;
(E) meet separately and periodically, either directly or through a designated
representative of the committee, with management and the independent auditor;
(F) review with the independent auditor any audit problems or difficulties and
management's response;
(G) set clear hiring policies of the risk retention group as to the hiring of employees or
former employees of the independent auditor;
(H) require the external auditor to rotate the lead or coordinating audit partner having
primary responsibility for the risk retention group's audit as well as the audit partner
responsible for reviewing that audit so that neither individual performs audit services for more
than five consecutive fiscal years; and
(I) report regularly to the board of directors.
(iii) The domestic regulator may waive the requirement to establish an audit committee
composed of independent board members if the risk retention group is able to demonstrate to
the domestic regulator that it is impracticable to do so and the risk retention group's board of
directors itself is otherwise able to accomplish the purposes of an audit committee, as described
in this Section (5)(g).
(h) The board of directors shall adopt and disclose governance standards, where
"disclose" means making such information available through election, including posting the
information on the risk retention group's website or other means, and providing such
information to owners upon request, which shall include:
(i) a process by which the directors are elected by the owners;
(ii) director qualification standards;
(iii) director responsibilities;
(iv) director access to management and, as necessary and appropriate, independent
advisors;
(v) director compensation;
(vi) director orientation and continuing education;
(vii) the policies and procedures that are followed for management succession; and
(viii) the policies and procedures that are followed for annual performance evaluation
of the board.
(i) The board of directors shall adopt and disclose a code of business conduct and
ethics for directors, officers, and employees and promptly disclose to the board of directors any
waivers of the code for directors or executive officers, which shall include the following topics:
(i) conflicts of interest;
(ii) matters covered under the corporate opportunities doctrine under the state of
domicile;
(iii) confidentiality;
(iv) fair dealing;
(v) protection and proper use of risk retention group assets;
(vi) compliance with all applicable laws, rules, and regulations; and
(vii) requiring the reporting of any illegal or unethical behavior that affects the
operation of the risk retention group.
(j) A captive manager, president, or chief executive officer of a risk retention group
shall promptly notify the domestic regulator in writing if the captive manager, president, or
chief executive officer becomes aware of any material non-compliance with any of the
governance standards in this Subsection (5).
Section 10. Section 
31A-15-204
 is amended to read:
31A-15-204.
Risk retention groups not chartered in this state -- Designation of
commissioner as agent -- Compliance with unfair claims settlement practices act --
Deceptive, false, or fraudulent practices -- Examination regarding financial condition --
Prohibitions -- Penalties -- Operation prior to enactment of this part.
(1) Risk retention groups chartered and licensed in other states and seeking to do
business as a risk retention group in this state shall comply with the following:
(a) Before offering insurance in this state a risk retention group shall submit to the
commissioner:
(i) a statement identifying the states in which the group is chartered and licensed as a
liability insurance company, its charter date, its principal place of business, and any other
information, including information on its membership, the commissioner may require to verify
that the group is a qualified risk retention group as defined in [
Subsection
] 
Section
31A-15-202
[
(11)
]; and
(ii) a copy of its plan of operations or feasibility study and revisions of the plan or
study submitted to the state in which the risk retention group is chartered and licensed, except a
plan or study is not required for any line or classification of liability insurance that:
(A) was defined in the Product Liability Risk Retention Act of 1981 before October 27,
1986; and
(B) was offered before that date by any risk retention group that had been chartered
and operating for not less than three years before that date.
(b) The risk retention group shall submit to the commissioner a copy of any revision to
its plan or study required by Subsection 
31A-15-203
[
(2)
]
(3)
 at the same time it submits the
revision of its chartering state.
(c) The risk retention group shall submit, on a form approved by the commissioner, a
statement of registration and a notice designating the commissioner as agent for the purpose of
receiving service of legal documents or process.
(d) The risk retention group shall pay annual license fees required by Section
31A-3-103
.
(2) Any risk retention group doing business in this state shall submit to the
commissioner:
(a) a copy of the group's financial statement submitted to the state in which the risk
retention group is chartered and licensed, which shall be certified by an independent public
accountant and shall contain a statement of opinion on loss and loss adjustment expense
reserves made by a member of the American Academy of Actuaries or a loss reserve specialist
qualified under criteria approved by the commissioner;
(b) a copy of each examination of the risk retention group as certified by the
commissioner or public official conducting the examination;
(c) if the commissioner requests, a copy of any information or document pertaining to
any outside audit performed with respect to the risk retention group; and
(d) any other information required to verify the group's continuing qualification as a
risk retention group within the definition in [
Subsection
] 
Section
31A-15-202
[
(11)
].
(3) (a) Each risk retention group shall pay premium taxes and taxes on premiums of
direct business for risks resident or located within this state, and shall report to the Utah State
Tax Commission the net premiums written for risks resident or located within this state. Each
risk retention group shall be subject to taxation, and any applicable fines and penalties related
to taxation, on the same basis as a foreign admitted insurer.
(b) To the extent licensed producers are utilized pursuant to Section 
31A-15-212
, they
shall report to the commissioner the premiums for direct business for all risks resident or
located within this state that the producers have placed with, or on behalf of, a risk retention
group not chartered in this state.
(c) To the extent that insurance producers are utilized pursuant to Section 
31A-15-212
they shall keep a complete and separate record of all policies procured from each risk retention
group. The record shall be open to examination by the commissioner, as provided under
Section 
31A-23a-412
. These records shall include the following for each policy and each kind
of insurance provided under each policy:
(i) the limit of liability;
(ii) the time period covered;
(iii) the effective date;
(iv) the name of the risk retention group that issued the policy;
(v) the gross premium charged;
(vi) the amount of any returned premiums; and
(vii) additional information required by the insurance commissioner.
(4) Each risk retention group and its agents and representatives shall comply with
:
(a)
 the Unfair Claims Settlement Practices Act, including Section 
31A-15-207
[
, Title
31A,
]
;
(b)
 Chapter 26, Part 3, Claim Practices[
,
]
;
 and
(c)
 any other provision of law relating to claims settlement practices.
(5) Each risk retention group shall comply with the laws of this state regarding
deceptive, false, and fraudulent acts, practices regulated under [
Title 31A,
] Chapter 23a, Part 4,
Marketing Practices, and any other provision of law relating to deceptive, false, or fraudulent
practices. The commissioner may only obtain an injunction regarding the conduct described in
this subsection from a court of competent jurisdiction.
(6) If the commissioner of the jurisdiction in which the group is chartered and licensed
has not initiated an examination or does not initiate an examination within 60 days after a
request by the commissioner of this state, the risk retention group shall submit to an
examination by the commissioner of this state to determine its financial condition. Any
examination conducted under this subsection shall be coordinated to avoid unjustified
repetition and shall be conducted in an expeditious manner and in accordance with the
[
NAIC's
] 
National Association of Insurance Commissioner's
 Examiner Handbook.
(7) Each application form for insurance from a risk retention group and each policy and
certificate issued by a risk retention group shall contain the following notice in ten-point type
on its front and declaration pages:
"NOTICE
This policy is issued by your risk retention group. Your risk retention group may not be
subject to all of the insurance laws and regulations of your state. State insurance insolvency
guaranty funds are not available for your risk retention group."
(8) The following acts by a risk retention group are prohibited:
(a) the solicitation or sale of insurance by a risk retention group to any person who is
not eligible for membership in the group; and
(b) the solicitation or sale of insurance by, or operation of, a risk retention group that is
in hazardous financial condition or financially impaired.
(9) A risk retention group may not do business in this state if an insurance company is
directly or indirectly a member or owner of the risk retention group, unless all members of the
group are insurance companies.
(10) The terms of any insurance policy issued by a risk retention group may not
provide, or be construed to provide, coverage prohibited generally by statute of this state or
declared unlawful by the Utah Supreme Court.
(11) A risk retention group not chartered in this state and doing business in this state
shall comply with a lawful order issued in a voluntary dissolution proceeding or in a
delinquency proceeding commenced by any state's insurance commissioner if there has been a
finding of financial impairment after an examination under Subsection (6).
(12) A risk retention group that violates any provision of this part is subject to fines
and penalties applicable to licensed insurers generally, including revocation of its right to do
business in this state.
(13) In addition to complying with the requirements of this section, each risk retention
group operating in this state before the effective date of this part shall comply with Subsection
(1)(a) within 30 days after the effective date of this part.
Section 11. Section 
31A-15-206.5
 is enacted to read:
 31A-15-206.5.
Countersignatures not required.
A policy of insurance issued to a risk retention group or any member of the risk
retention group may not be required to be countersigned.
Section 12. Section 
31A-15-208
 is amended to read:
31A-15-208.
Purchasing groups -- Notice and registration requirements.
(1) A purchasing group that intends to do business in this state shall, [
prior to
] 
before
doing business, furnish 
reasonable
 notice to the insurance commissioner 
in this state. The
notice shall be on forms prescribed by the National Association of Insurance Commissioners
and shall
:
(a) [
identifying
] 
identify
 the state in which the [
purchasing
] group is domiciled;
(b) [
identifying any state
] 
identify the other states
 in which the [
purchasing
] group
intends to do business;
(c) [
specifying
] 
specify
 the lines and classifications of liability insurance that the
[
purchasing
] group intends to purchase;
(d) [
identifying the insurers
] 
identify the one or more insurance companies
 from which
the group intends to purchase its insurance and the domicile of the insurers;
(e) [
specifying
] 
specify
 the method by which, and [
any
] 
the one or more
 persons
, if
any,
 through whom, insurance will be offered to [
group
] 
its
 members whose risks are resident
or located in this state;
(f) [
identifying
] 
identify
 the principal place of business of the [
purchasing
] group; and
(g) [
providing any
] 
provide any
 other information 
as may be
 required by the
commissioner to verify that the [
purchasing
] group is a 
qualified
 "purchasing group," as
defined in Section 
31A-15-202
.
(2) A purchasing group shall notify the commissioner of a change in an item listed in
Subsection (1) within 10 days of the change.
(3) (a) A purchasing group shall annually register with the commissioner and pay a
filing fee.
(b) A purchasing group shall designate the commissioner as its agent solely for the
purpose of receiving service of legal documents or process.
(c) The registration and fee requirements of this Subsection (3) do not apply to a
purchasing group that only purchases insurance that was authorized under the Product Liability
Risk Retention Act of 1981, and that:
(i) in any state of the United States:
(A) was domiciled before April 1, 1986; and
(B) is domiciled after October 27, 1986;
(ii) (A) before October 27, 1986, purchased insurance from an insurer licensed in any
state; and
(B) since October 27, 1986, purchased its insurance from an insurer licensed in any
state; or
(iii) was a purchasing group under the requirements of the Product Liability Risk
Retention Act of 1981 before October 27, 1986.
(4) [
A
] 
Each
 purchasing group that is required to give notice under Subsection (1) shall
also furnish 
the
 information required by the commissioner to:
(a) verify that the entity qualifies as a purchasing group;
(b) determine where the purchasing group is located; and
(c) determine appropriate tax treatment of the purchasing group.
Section 13. Section 
31A-15-209
 is amended to read:
31A-15-209.
Restrictions on purchasing groups.
[
(1) A purchasing group which obtains liability insurance from an insurer not admitted
in this state or from a risk retention group shall inform each of the group members which have
a risk resident or located in this state that the risk is not protected by an insurance insolvency
guaranty fund in this state, and that the risk retention group or insurer may not be subject to all
insurance laws and regulations of this state.
]
(1) A purchasing group may not purchase insurance from a risk retention group that is
not chartered in a state or from an insurer not admitted in the state in which the purchasing
group is located, unless the purchase is effected through a licensed producer acting pursuant to
the surplus lines laws and regulations of the state in which the purchasing group is located.
(2) A purchasing group that obtains liability insurance from an insurer not admitted in
this state or a risk retention group shall inform each of the members of the purchasing group or
risk retention group that have a risk resident or located in this state that:
(a) the risk is not protected by an insurance insolvency guaranty fund in this state; and
(b) the risk retention group or insurer may not be subject to all insurance laws and
regulations of this state.
[
(2)
] 
(3) (a)
 A purchasing group may not purchase insurance providing for a deductible
or self-insured retention applicable to the group as a whole[
; however,
]
.
(b) Notwithstanding Subsection (3)(a),
 coverage may provide for a deductible or
self-insured retention applicable to individual members.
[
(3)
] 
(4)
 Purchases of insurance by purchasing groups are subject to the same standards
regarding aggregate limits which are applicable to all purchases of group insurance.
Section 14. Section 
31A-15-212
 is amended to read:
31A-15-212.
Duty of producers to obtain license -- Risk retention groups --
Purchasing groups.
(1) A person may do the following only if [
he
] 
the person
 is licensed as an insurance
[
agent or broker
] 
producer
 or is exempt from licensure under [
Title 31A,
] Chapter 23a,
Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries:
(a) solicit, negotiate, or procure liability insurance in this state from a risk retention
group;
(b) solicit, negotiate, or procure liability insurance in this state for a purchasing group
from an authorized insurer or a risk retention group; and
(c) solicit, negotiate, or procure liability insurance coverage in this state for any
member of a purchasing group under a purchasing group's policy.
[
(2) A person may solicit, negotiate, or procure liability insurance from an insurer not
authorized to do business in this state on behalf of a purchasing group located in this state only
if he is licensed as a surplus lines producer or is exempt from licensure under Title 31A,
Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance
Intermediaries.
]
[
(3) The requirement of residence in this state does not apply for purposes of acting as
a producer for a risk retention group or purchasing group under Subsections (1) and (2).
]
[
(4) On business placed with a risk retention group or written through a purchasing
group, each person licensed under this title shall provide to each prospective insured the notice
required by Subsection 
31A-15-204
(7) in the case of a risk retention group, and by Subsection
31A-15-209
(1) in the case of a purchasing group.
]
[
(5) Solicitation for membership in a purchasing group is not of itself a solicitation for
insurance.
]
(2) (a) A person may not act or aid in any manner in soliciting, negotiating, or
procuring liability insurance in this state for a purchasing group from an authorized insurer or a
risk retention group chartered in a state unless that person is licensed as an insurance producer,
or is exempt from licensure under Chapter 23a, Insurance Marketing - Licensing Producers,
Consultants, and Reinsurance Intermediaries.
(b) A person may not act or aid in any manner in soliciting, negotiating, or procuring
liability insurance coverage in this state for any member of a purchasing group under a
purchasing group's policy unless that person is licensed as an insurance producer, or is exempt
from licensure under Chapter 23a, Insurance Marketing - Licensing Producers, Consultants,
and Reinsurance Intermediaries.
(c) A person may not act or aid in any manner in soliciting, negotiating, or procuring
liability insurance from an insurer not authorized to do business in this state on behalf of a
purchasing group located in this state unless that person is licensed as a surplus lines producer
or excess lines producer or is exempt from licensure under Chapter 23a, Insurance Marketing -
Licensing Producers, Consultants, and Reinsurance Intermediaries.
(3) For purposes of acting as a producer for a risk retention group or purchasing group
pursuant to Subsections (1) and (2), the requirement of residence in this state does not apply.
(4) A person licensed pursuant to Chapter 23a, Insurance Marketing - Licensing
Producers, Consultants, and Reinsurance Intermediaries, on business placed with a risk
retention group or written through a purchasing group, shall inform each prospective insured of
the provisions of the notice required by Subsection 
31A-15-204
(7) in the case of a purchasing
group.
Section 15. Section 
31A-15-213.5
 is enacted to read:
 31A-15-213.5.
Rulemaking.
In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commissioner may make and from time to time amend rules relating to risk retention groups as
may be necessary or desirable to carry out this part.
Section 16. Section 
31A-17-404
 is amended to read:
31A-17-404.
Credit allowed a domestic ceding insurer against reserves for
reinsurance.
(1) A domestic ceding insurer is allowed credit for reinsurance as either an asset or a
reduction from liability for reinsurance ceded only if the reinsurer meets the requirements of
Subsection (3), (4), (5), (6), [
or
] (7), 
or (8),
 subject to the following:
(a) Credit is allowed under Subsection (3), (4), or (5) only with respect to a cession of a
kind or class of business that the assuming insurer is licensed or otherwise permitted to write or
assume:
(i) in its state of domicile; or
(ii) in the case of a United States branch of an alien assuming insurer, in the state
through which it is entered and licensed to transact insurance or reinsurance.
(b) Credit is allowed under Subsection (5) or (6) only if the applicable requirements of
Subsection [
(8)
] 
(9)
 are met.
(2) A domestic ceding insurer is allowed credit for reinsurance ceded:
(a) only if the reinsurance is payable in a manner consistent with Section 
31A-22-1201
;
(b) only to the extent that the accounting:
(i) is consistent with the terms of the reinsurance contract; and
(ii) clearly reflects:
(A) the amount and nature of risk transferred; and
(B) liability, including contingent liability, of the ceding insurer;
(c) only to the extent the reinsurance contract shifts insurance policy risk from the
ceding insurer to the assuming reinsurer in fact and not merely in form; and
(d) only if the reinsurance contract contains a provision placing on the reinsurer the
credit risk of all dealings with intermediaries regarding the reinsurance contract.
(3) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
assuming insurer that is licensed to transact insurance or reinsurance in this state.
(4) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
assuming insurer that is accredited 
by the commissioner
 as a reinsurer in this state.
(b) An insurer is accredited as a reinsurer if the insurer:
(i) files with the commissioner evidence of the insurer's submission to this state's
jurisdiction;
(ii) submits to the commissioner's authority to examine the insurer's books and records;
(iii) (A) is licensed to transact insurance or reinsurance in at least one state; or
(B) in the case of a United States branch of an alien assuming insurer, is entered
through and licensed to transact insurance or reinsurance in at least one state;
(iv) files annually with the commissioner a copy of the insurer's:
(A) annual statement filed with the insurance department of its state of domicile; and
(B) most recent audited financial statement; and
(v) (A) (I) has not had its accreditation denied by the commissioner within 90 days of
the day on which the insurer submits the information required by this Subsection (4); and
(II) maintains a surplus with regard to policyholders in an amount not less than
$20,000,000; or
(B) (I) has its accreditation approved by the commissioner; and
(II) maintains a surplus with regard to policyholders in an amount less than
$20,000,000.
(c) Credit may not be allowed a domestic ceding insurer if the assuming insurer's
accreditation is revoked by the commissioner after a notice and hearing.
(5) (a) A domestic ceding insurer is allowed a credit if:
(i) the reinsurance is ceded to an assuming insurer that is:
(A) domiciled in a state meeting the requirements of Subsection (5)(a)(ii); or
(B) in the case of a United States branch of an alien assuming insurer, is entered
through a state meeting the requirements of Subsection (5)(a)(ii);
(ii) the state described in Subsection (5)(a)(i) employs standards regarding credit for
reinsurance substantially similar to those applicable under this section; and
(iii) the assuming insurer or United States branch of an alien assuming insurer:
(A) maintains a surplus with regard to policyholders in an amount not less than
$20,000,000; and
(B) submits to the authority of the commissioner to examine its books and records.
(b) The requirements of Subsections (5)(a)(i) and (ii) do not apply to reinsurance ceded
and assumed pursuant to a pooling arrangement among insurers in the same holding company
system.
(6) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
assuming insurer that maintains a trust fund:
(i) created in accordance with rules made by the commissioner; and
(ii) in a qualified United States financial institution for the payment of a valid claim of:
(A) a United States ceding insurer of the assuming insurer;
(B) an assign of the United States ceding insurer; and
(C) a successor in interest to the United States ceding insurer.
(b) To enable the commissioner to determine the sufficiency of the trust fund described
in Subsection (6)(a), the assuming insurer shall:
(i) report annually to the commissioner information substantially the same as that
required to be reported on the National Association of Insurance Commissioners Annual
Statement form by a licensed insurer; and
(ii) (A) submit to examination of its books and records by the commissioner; and
(B) pay the cost of an examination.
(c) (i) Credit for reinsurance may not be granted under this Subsection (6) unless the
form of the trust and any amendment to the trust is approved by:
(A) the commissioner of the state where the trust is domiciled; or
(B) the commissioner of another state who, pursuant to the terms of the trust
instrument, accepts principal regulatory oversight of the trust.
(ii) The form of the trust and an amendment to the trust shall be filed with the
commissioner of every state in which a ceding insurer beneficiary of the trust is domiciled.
(iii) The trust instrument shall provide that a contested claim is valid and enforceable
upon the final order of a court of competent jurisdiction in the United States.
(iv) The trust shall vest legal title to its assets in its one or more trustees for the benefit
of:
(A) a United States ceding insurer of the assuming insurer;
(B) an assign of the United States ceding insurer; or
(C) a successor in interest to the United States ceding insurer.
(v) The trust and the assuming insurer are subject to examination as determined by the
commissioner.
(vi) The trust shall remain in effect for as long as the assuming insurer has an
outstanding obligation due under a reinsurance agreement subject to the trust.
(vii) No later than February 28 of each year, the trustee of the trust shall:
(A) report to the commissioner in writing the balance of the trust;
(B) list the trust's investments at the end of the preceding calendar year; and
(C) (I) certify the date of termination of the trust, if so planned; or
(II) certify that the trust will not expire prior to the following December 31.
(d) The following requirements apply to the following categories of assuming insurer:
(i) For a single assuming insurer:
(A) the trust fund shall consist of funds in trust in an amount not less than the assuming
insurer's liabilities attributable to reinsurance ceded by United States ceding insurers; and
(B) the assuming insurer shall maintain a trusteed surplus of not less than
$20,000,000[
.
]
, except as provided in Subsection (6)(d)(ii).
(ii) (A) At any time after the assuming insurer has permanently discontinued
underwriting new business secured by the trust for at least three full years, the commissioner
with principal regulatory oversight of the trust may authorize a reduction in the required
trusteed surplus, but only after a finding, based on an assessment of the risk, that the new
required surplus level is adequate for the protection of United States ceding insurers,
policyholders, and claimants in light of reasonably foreseeable adverse loss development.
(B) The risk assessment may involve an actuarial review, including an independent
analysis of reserves and cash flows, and shall consider all material risk factors, including, when
applicable, the lines of business involved, the stability of the incurred loss estimates, and the
effect of the surplus requirements on the assuming insurer's liquidity or solvency.
(C) The minimum required trusteed surplus may not be reduced to an amount less than
30% of the assuming insurer's liabilities attributable to reinsurance ceded by United States
ceding insurers covered by the trust.
[
(ii)
] 
(iii)
 For a group acting as assuming insurer, including incorporated and individual
unincorporated underwriters:
(A) for reinsurance ceded under a reinsurance agreement with an inception,
amendment, or renewal date on or after August 1, 1995, the trust shall consist of a trusteed
account in an amount not less than the [
group's
] 
respective underwriters'
 several liabilities
attributable to business ceded by the one or more United States domiciled ceding insurers to [
a
member
] 
an underwriter
 of the group;
(B) for reinsurance ceded under a reinsurance agreement with an inception date on or
before July 31, 1995, and not amended or renewed after July 31, 1995, notwithstanding the
other provisions of this chapter, the trust shall consist of a trusteed account in an amount not
less than the [
group's
] 
respective underwriters'
 several insurance and reinsurance liabilities
attributable to business written in the United States;
(C) in addition to a trust described in Subsection (6)(d)[
(ii)
]
(iii)
(A) or (B), the group
shall maintain in trust a trusteed surplus of which $100,000,000 is held jointly for the benefit of
the one or more United States domiciled ceding insurers of a member of the group for all years
of account;
(D) the incorporated members of the group:
(I) may not be engaged in a business other than underwriting as a member of the group;
and
(II) are subject to the same level of regulation and solvency control by the group's
domiciliary regulator as are the unincorporated members; and
(E) within 90 days after the day on which the group's financial statements are due to be
filed with the group's domiciliary regulator, the group shall provide to the commissioner:
(I) an annual certification by the group's domiciliary regulator of the solvency of each
underwriter member; or
(II) if a certification is unavailable, a financial statement, prepared by an independent
public accountant, of each underwriter member of the group.
[
(iii)
] 
(iv)
 For a group of incorporated underwriters under common administration, the
group shall:
(A) have continuously transacted an insurance business outside the United States for at
least three years immediately preceding the day on which the group makes application for
accreditation;
(B) maintain aggregate policyholders' surplus of at least $10,000,000,000;
(C) maintain a trust fund in an amount not less than the group's several liabilities
attributable to business ceded by the one or more United States domiciled ceding insurers to a
member of the group pursuant to a reinsurance contract issued in the name of the group;
(D) in addition to complying with the other provisions of this Subsection
(6)(d)[
(iii)
]
(iv)
, maintain a joint trusteed surplus of which $100,000,000 is held jointly for the
benefit of the one or more United States domiciled ceding insurers of a member of the group as
additional security for these liabilities; and
(E) within 90 days after the day on which the group's financial statements are due to be
filed with the group's domiciliary regulator, make available to the commissioner:
(I) an annual certification of each underwriter member's solvency by the member's
domiciliary regulator; and
(II) a financial statement of each underwriter member of the group prepared by an
independent public accountant.
(7) If reinsurance is ceded to an assuming insurer not meeting the requirements of
Subsection (3), (4), (5), or (6), a domestic ceding insurer is allowed credit only as to the
insurance of a risk located in a jurisdiction where the reinsurance is required by applicable law
or regulation of that jurisdiction.
(8) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
assuming insurer that secures its obligations in accordance with this Subsection (8):
(a) The insurer shall be certified by the commissioner as a reinsurer in this state.
(b) To be eligible for certification, the assuming insurer shall:
(i) be domiciled and licensed to transact insurance or reinsurance in a qualified
jurisdiction, as determined by the commissioner pursuant to Subsection (8)(d);
(ii) maintain minimum capital and surplus, or its equivalent, in an amount to be
determined by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
3, Utah Administrative Rulemaking Act;
(iii) maintain financial strength ratings from two or more rating agencies considered
acceptable by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
3, Utah Administrative Rulemaking Act;
(iv) agree to:
(A) submit to the jurisdiction of this state;
(B) appoint the commissioner as its agent for service of process in this state;
(C) provide security for 100% of the assuming insurer's liabilities attributable to
reinsurance ceded by United States ceding insurers if it resists enforcement of a final United
States judgment;
(D) agree to meet applicable information filing requirements as determined by the
commissioner including an application for certification, a renewal and on an ongoing basis; and
(E) any other requirements for certification considered relevant by the commissioner.
(c) An association, including incorporated and individual unincorporated underwriters,
may be a certified reinsurer. To be eligible for certification, in addition to satisfying
requirements of Subsections (8)(a) and (b), the association:
(i) shall satisfy its minimum capital and surplus requirements through the capital and
surplus equivalents, net of liabilities, of the association and its members, which shall include a
joint central fund that may be applied to any unsatisfied obligation of the association or any of
its members in an amount determined by the commissioner to provide adequate protection;
(ii) may not have incorporated members of the association engaged in any business
other than underwriting as a member of the association;
(iii) shall be subject to the same level of regulation and solvency control of the
incorporated members of the association by the association's domiciliary regulator as are the
unincorporated members; and
(iv) within 90 days after its financial statements are due to be filed with the
association's domiciliary regulator provide:
(A) to the commissioner an annual certification by the association's domiciliary
regulator of the solvency of each underwriter member; or
(B) if a certification is unavailable, financial statements prepared by independent
public accountants, of each underwriter member of the association.
(d) The commissioner shall create and publish a list of qualified jurisdictions under
which an assuming insurer licensed and domiciled in the jurisdiction is eligible to be
considered for certification by the commissioner as a certified reinsurer.
(i) To determine whether the domiciliary jurisdiction of a non-United States assuming
insurer is eligible to be recognized as a qualified jurisdiction, the commissioner:
(A) shall evaluate the appropriateness and effectiveness of the reinsurance supervisory
system of the jurisdiction, both initially and on an ongoing basis;
(B) shall consider the rights, the benefits, and the extent of reciprocal recognition
afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the
United States;
(C) shall require the qualified jurisdiction to share information and cooperate with the
commissioner with respect to all certified reinsurers domiciled within that jurisdiction; and
(D) may not recognize a jurisdiction as a qualified jurisdiction if the commissioner has
determined that the jurisdiction does not adequately and promptly enforce final United States
judgments and arbitration awards.
(ii) The commissioner may consider additional factors in determining a qualified
jurisdiction.
(iii) A list of qualified jurisdictions shall be published through the National
Association of Insurance Commissioners' Committee Process and the commissioner shall:
(A) consider this list in determining qualified jurisdictions; and
(B) if the commissioner approves a jurisdiction as qualified that does not appear on the
National Association of Insurance Commissioner's list of qualified jurisdictions, provide
thoroughly documented justification in accordance with criteria to be developed by rule made
in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(iv) United States jurisdictions that meet the requirement for accreditation under the
National Association of Insurance Commissioners' financial standards and accreditation
program shall be recognized as qualified jurisdictions.
(v) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction,
the commissioner may suspend the reinsurer's certification indefinitely, in lieu of revocation.
(e) The commissioner shall:
(i) assign a rating to each certified reinsurer, giving due consideration to the financial
strength ratings that have been assigned by rating agencies considered acceptable to the
commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act; and
(ii) publish a list of all certified reinsurers and their ratings.
(f) A certified reinsurer shall secure obligations assumed from United States ceding
insurers under this Subsection (8) at a level consistent with its rating, as specified in rules made
by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act.
(i) For a domestic ceding insurer to qualify for full financial statement credit for
reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a
form acceptable to the commissioner and consistent with Section 
31A-17-404.1
, or in a
multibeneficiary trust in accordance with Subsections (5), (6), and (7), except as otherwise
provided in this Subsection (8).
(ii) If a certified reinsurer maintains a trust to fully secure its obligations subject to
Subsections (5), (6), and (7), and chooses to secure its obligations incurred as a certified
reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate
trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a
certified reinsurer with reduced security as permitted by this Subsection (8) or comparable laws
of other United States jurisdictions and for its obligations subject to Subsections (5), (6), and
(7).
(iii) It shall be a condition to the grant of certification under this Subsection (8) that the
certified reinsurer shall have bound itself, by the language of the trust and agreement with the
commissioner with principal regulatory oversight of the trust account, to fund, upon
termination of the trust account, out of the remaining surplus of the trust, any deficiency of any
other the trust account.
(iv) The minimum trusteed surplus requirements provided in Subsections (5), (6), and
(7) are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer
for the purpose of securing obligations incurred under this Subsection (8), except that the trust
shall maintain a minimum trusteed surplus of $10,000,000.
(v) With respect to obligations incurred by a certified reinsurer under this Subsection
(8), if the security is insufficient, the commissioner:
(A) shall reduce the allowable credit by an amount proportionate to the deficiency; and
(B) may impose further reductions in allowable credit upon finding that there is a
material risk that the certified reinsurer's obligations will not be paid in full when due.
(vi) For purposes of this Subsection (8), a certified reinsurer whose certification has
been terminated for any reason shall be treated as a certified reinsurer required to secure 100%
of its obligations.
(A) As used in this Subsection (8), the term "terminated" refers to revocation,
suspension, voluntary surrender, and inactive status.
(B) If the commissioner continues to assign a higher rating as permitted by other
provisions of this section, the requirement under this Subsection (8)(f)(vi) does not apply to a
certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.
(g) If an applicant for certification has been certified as a reinsurer in a National
Association of Insurance Commissioners' accredited jurisdiction, the commissioner may:
(i) defer to that jurisdiction's certification;
(ii) defer to the rating assigned by that jurisdiction; and
(iii) consider such reinsurer to be a certified reinsurer in this state.
(h) (i) A certified reinsurer that ceases to assume new business in this state may request
to maintain its certification in inactive status in order to continue to qualify for a reduction in
security for its in-force business.
(ii) An inactive certified reinsurer shall continue to comply with all applicable
requirements of this Subsection (8).
(iii) The commissioner shall assign a rating to a reinsurer that qualifies under this
Subsection (8)(h), that takes into account, if relevant, the reasons why the reinsurer is not
assuming new business.
[
(8)
] 
(9)
 Reinsurance credit may not be allowed a domestic ceding insurer unless the
assuming insurer under the reinsurance contract submits to the jurisdiction of Utah courts by:
(a) (i) being an admitted insurer; and
(ii) submitting to jurisdiction under Section 
31A-2-309
;
(b) having irrevocably appointed the commissioner as the domestic ceding insurer's
agent for service of process in an action arising out of or in connection with the reinsurance,
which appointment is made under Section 
31A-2-309
; or
(c) agreeing in the reinsurance contract:
(i) that if the assuming insurer fails to perform its obligations under the terms of the
reinsurance contract, the assuming insurer, at the request of the ceding insurer, shall:
(A) submit to the jurisdiction of a court of competent jurisdiction in a state of the
United States;
(B) comply with all requirements necessary to give the court jurisdiction; and
(C) abide by the final decision of the court or of an appellate court in the event of an
appeal; and
(ii) to designate the commissioner or a specific attorney licensed to practice law in this
state as its attorney upon whom may be served lawful process in an action, suit, or proceeding
instituted by or on behalf of the ceding company.
[
(9)
] 
(10)
 Submitting to the jurisdiction of Utah courts under Subsection [
(8)
] 
(9)
 does
not override a duty or right of a party under the reinsurance contract, including a requirement
that the parties arbitrate their disputes.
[
(10)
] 
(11)
 If an assuming insurer does not meet the requirements of Subsection (3),
(4), or (5), the credit permitted by Subsection (6) 
or (8)
 may not be allowed unless the
assuming insurer agrees in the trust instrument to the following conditions:
(a) (i) Notwithstanding any other provision in the trust instrument, if an event
described in Subsection [
(10)
] 
(11)
(a)(ii) occurs the trustee shall comply with:
(A) an order of the commissioner with regulatory oversight over the trust; or
(B) an order of a court of competent jurisdiction directing the trustee to transfer to the
commissioner with regulatory oversight all of the assets of the trust fund.
(ii) This Subsection [
(10)
] 
(11)
(a) applies if:
(A) the trust fund is inadequate because the trust contains an amount less than the
amount required by Subsection (6)(d); or
(B) the grantor of the trust is:
(I) declared insolvent; or
(II) placed into receivership, rehabilitation, liquidation, or similar proceeding under the
laws of its state or country of domicile.
(b) The assets of a trust fund described in Subsection [
(10)
] 
(11)
(a) shall be distributed
by and a claim shall be filed with and valued by the commissioner with regulatory oversight in
accordance with the laws of the state in which the trust is domiciled that are applicable to the
liquidation of a domestic insurance company.
(c) If the commissioner with regulatory oversight determines that the assets of the trust
fund, or any part of the assets, are not necessary to satisfy the claims of the one or more United
States ceding insurers of the grantor of the trust, the assets, or a part of the assets, shall be
returned by the commissioner with regulatory oversight to the trustee for distribution in
accordance with the trust instrument.
(d) A grantor shall waive any right otherwise available to it under United States law
that is inconsistent with this Subsection [
(10)
] 
(11)
.
(12) If an accredited or certified reinsurer ceases to meet the requirements for
accreditation or certification, the commissioner may suspend or revoke the reinsurer's
accreditation or certification.
(a) The commissioner shall give the reinsurer notice and opportunity for hearing.
(b) The suspension or revocation may not take effect until after the commissioner's
order after a hearing, unless:
(i) the reinsurer waives its right to hearing;
(ii) the commissioner's order is based on:
(A) regulatory action by the reinsurer's domiciliary jurisdiction; or
(B) the voluntary surrender or termination of the reinsurer's eligibility to transact
insurance or reinsurance business in its domiciliary jurisdiction or primary certifying state
under Subsection (8)(g); or
(iii) the commissioner's finding that an emergency requires immediate action and a
court of competent jurisdiction has not stayed the commissioner's action.
(c) While a reinsurer's accreditation or certification is suspended, no reinsurance
contract issued or renewed after the effective date of the suspension qualifies for credit except
to the extent that the reinsurer's obligations under the contract are secured in accordance with
Section 
31A-17-404.1
.
(d) If a reinsurer's accreditation or certification is revoked, no credit for reinsurance
may be granted after the effective date of the revocation except to the extent that the reinsurer's
obligations under the contract are secured in accordance with Subsection (8)(f) or Section
31A-17-404.1
.
(13) (a) A ceding insurer shall take steps to manage its reinsurance recoverables
proportionate to its own book of business.
(b) (i) A domestic ceding insurer shall notify the commissioner within 30 days after
reinsurance recoverables from any single assuming insurer, or group of affiliated assuming
insurers:
(A) exceeds 50% of the domestic ceding insurer's last reported surplus to
policyholders; or
(B) after it is determined that reinsurance recoverables from any single assuming
insurer, or group of affiliated assuming insurers, is likely to exceed 50% of the domestic ceding
insurer's last reported surplus to policyholders.
(ii) The notification required by Subsection (13)(b)(i) shall demonstrate that the
exposure is safely managed by the domestic ceding insurer.
(c) A ceding insurer shall take steps to diversify its reinsurance program.
(d) (i) A domestic ceding insurer shall notify the commissioner within 30 days after
ceding or being likely to cede more than 20% of the ceding insurer's gross written premium in
the prior calendar year to any:
(A) single assuming insurer; or
(B) group of affiliated assuming insurers.
(ii) The notification shall demonstrate that the exposure is safely managed by the
domestic ceding insurer.
Section 17. Section 
31A-17-404.1
 is amended to read:
31A-17-404.1.
Asset or reduction from liability for reinsurance ceded by a
domestic insurer to other assuming insurers.
(1) (a) An asset or a reduction from liability for reinsurance ceded by a domestic
insurer to an assuming insurer that does not meet the requirements of Section 
31A-17-404
 is
allowed in an amount not exceeding the liabilities carried by the ceding insurer.
(b) A reduction described in Subsection (1)(a) shall be in the amount of funds held by
or on behalf of the ceding insurer, including funds held in trust for the ceding insurer:
(i) that are held:
(A) under a reinsurance contract with the assuming insurer; and
(B) as security for the payment of obligations under the reinsurance contract; and
(ii) if the security is held:
(A) in the United States subject to withdrawal solely by, and under the exclusive
control of, the ceding insurer; or
(B) in the case of a trust, in a qualified United States financial institution.
(2) Security described in Subsection (1) may be in the form of:
(a) cash;
(b) a security:
(i) listed by the Securities Valuation Office of the National Association of Insurance
Commissioners
, including those considered exempt from filing as defined by the Purposes and
Procedures Manual of the Securities Valuation Office
; and
(ii) qualifying as an admitted asset;
(c) subject to Subsection (3), a clean, irrevocable, unconditional letter of credit, issued
or confirmed by a qualified United States financial institution:
(i) effective no later than December 31 of the year for which the filing is being made;
and
(ii) in the possession of, or in trust for, the ceding [
company
] 
insurer
 on or before the
filing date of its annual statement; or
(d) another form of security acceptable to the commissioner.
(3) Notwithstanding an issuing or confirming institution's subsequent failure to meet an
applicable standard of acceptability, a letter of credit described in Subsection (2) that meets the
applicable standards of issuer acceptability as of the day on which it is issued or confirmed
shall continue to be acceptable as security until the sooner of the day on which the letter of
credit expires, is extended, is renewed, is modified, or is amended.
Section 18. Section 
31A-17-404.3
 is amended to read:
31A-17-404.3.
Rules.
(1)
 In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
this chapter, the commissioner may make rules prescribing:
[
(1)
] 
(a)
 the form of a letter of credit required under this chapter;
[
(2)
] 
(b)
 the requirements for a trust or trust instrument required by this chapter;
[
(3)
] 
(c)
 the procedures for licensing and accrediting; [
and
]
[
(4)
] 
(d)
 minimum capital and surplus requirements[
.
]
;
(e) additional requirements relating to calculation of credit allowed a domestic ceding
insurer against reserves for reinsurance under Section 
31A-17-404
; and
(f) additional requirements relating to calculation of asset reduction from liability for
reinsurance ceded by a domestic insurer to other ceding insurers under Section 
31A-17-404.1
.
(2) A rule made pursuant to Subsection (1)(e) or (f) may apply to reinsurance relating
to:
(a) a life insurance policy with guaranteed nonlevel gross premiums or guaranteed
nonlevel benefits;
(b) a universal life insurance policy with provisions resulting in the ability of a
policyholder to keep a policy in force over a secondary guarantee period;
(c) a variable annuity with guaranteed death or living benefits;
(d) a long-term care insurance policy; or
(e) such other life and health insurance or annuity product as to which the National
Association of Insurance Commissioners adopts model regulatory requirements with respect
for credit for reinsurance.
(3) A rule adopted pursuant to Subsection (1)(e) or (f) may apply to a treaty containing:
(a) a policy issued on or after January 1, 2015; and
(b) a policy issued before January 1, 2015, if risk pertaining to the policy is ceded in
connection with the treaty, either in whole or in part, on or after January 1, 2015.
(4) A rule adopted pursuant to Subsection (1)(e) or (f) may require the ceding insurer,
in calculating the amounts or forms of security required to be held under rules made under this
section, to use the Valuation Manual adopted by the National Association of Insurance
Commissioners under Section 11B(1) of the National Association of Insurance Commissioners
Standard Valuation Law, including all amendments adopted by the National Association of
Insurance Commissioners and in effect on the date as of which the calculation is made, to the
extent applicable.
(5) A rule adopted pursuant to Subsection (1)(e) or (f) may not apply to cessions to an
assuming insurer that:
(a) is certified in this state or, if this state has not adopted provisions substantially
equivalent to Section 2E of the Credit for Reinsurance Model Law, certified in a minimum of
five other states; or
(b) maintains at least $250,000,000 in capital and surplus when determined in
accordance with the National Association of Insurance Commissioners Accounting Practices
and Procedures Manual, including all amendments thereto adopted by the National Association
of Insurance Commissioners, excluding the impact of any permitted or prescribed practices and
is:
(i) licensed in at least 26 states; or
(ii) licensed in at least 10 states, and licensed or accredited in a total of at least 35
states.
(6) The authority to adopt rules pursuant to Subsection (1)(e) or (f) does not otherwise
limit the commissioner's general authority to make rules pursuant to Subsection (1).
Section 19. Section 
31A-22-202
 is amended to read:
31A-22-202.
Protection of third-party claimants.
(1)
 [
No
] 
An
 insurance contract insuring against loss or damage through legal liability
for the bodily injury or death by accident of any person, or for damage to the property of any
person
,
 may 
not
 be retroactively abrogated to the detriment of any third-party claimant by any
agreement between the insurer and insured after the occurrence of any injury, death, or damage
for which the insured may be liable. This attempted abrogation is void.
(2) A motor vehicle liability policy may be rescinded or cancelled as to an insured for
fraud, material misrepresentation, or any reason allowable under the law.
(3) A motor vehicle liability policy may not be rescinded for fraud or material
misrepresentation, as to minimum liability coverage limits under Section 
31A-22-304
, to the
detriment of a third party for a loss otherwise covered by the policy.
Section 20. Section 
31A-22-603
 is amended to read:
31A-22-603.
Persons insured under an individual accident and health policy.
A policy of individual accident and health insurance may insure only one person, except
that originally or by subsequent amendment, upon the application of an adult policyholder, a
policy may insure any two or more eligible members of the policyholder's family, including
[
husband, wife
] 
spouse
, dependent children, and any other person dependent upon the
policyholder.
Section 21. Section 
31A-22-715
 is amended to read:
31A-22-715.
Alcohol and drug dependency treatment.
(1)
 [
Each group accident and health insurance policy shall contain an optional rider
allowing certificate holders to obtain
] 
An insurer offering a health benefit plan providing
coverage for alcohol or drug dependency treatment [
in programs
] 
may require an inpatient
facility to be
 licensed by
:
(a) (i)
 the Department of Human Services, under Title 62A, Chapter 2, Licensure of
Programs and Facilities[
, inpatient hospitals accredited by the joint commission on the
accreditation of hospitals, or facilities licensed by
]
; or
(ii)
 the Department of Health[
.
]
; or
(b) for an inpatient facility located outside the state, a state agency similar to one
described in Subsection (1)(a).
(2) For inpatient coverage provided pursuant to Subsection (1), an insurer may require
an inpatient facility to be accredited by the following:
(a) the joint commission; and
(b) one other nationally recognized accrediting agency.
Section 22. Section 
31A-22-1201
 is amended to read:
31A-22-1201.
Assumption agreement.
(1) Subject to Subsection (2), a credit for reinsurance ceded under Section
31A-17-404
[
,
] 
or
31A-17-404.1
[
, or 
31A-17-404.2
,
] is not allowed unless, in addition to
meeting the requirements of Section 
31A-17-404
[
,
] 
or
31A-17-404.1
[
, or 
31A-17-404.2
], the
reinsurance agreement provides in substance that if the ceding insurer is insolvent, the
reinsurance is payable by the assuming insurer:
(a) on the basis of the liability of the ceding insurer under the contract or contracts
reinsured;
(b) without diminution because of the insolvency of the ceding insurer; and
(c) directly to the ceding insurer or to its domiciliary liquidator or receiver.
(2) Subsection (1) applies except if:
(a) a contract specifically provides another payee of the insurance in the event of the
insolvency of the ceding insurer; or
(b) the assuming insurer, with the consent of the one or more direct insureds, assumes
the policy obligations of the ceding insurer:
(i) as direct obligations of the assuming insurer to the payees under the policies; and
(ii) in substitution for the obligations of the ceding insurer to the payees.
Section 23. Section 
31A-23a-111
 is amended to read:
31A-23a-111.
Revoking, suspending, surrendering, lapsing, limiting, or otherwise
terminating a license -- Rulemaking for renewal or reinstatement.
(1) A license type issued under this chapter remains in force until:
(a) revoked or suspended under Subsection (5);
(b) surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action;
(c) the licensee dies or is adjudicated incompetent as defined under:
(i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
(ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
Minors;
(d) lapsed under Section 
31A-23a-113
; or
(e) voluntarily surrendered.
(2) The following may be reinstated within one year after the day on which the license
is no longer in force:
(a) a lapsed license; or
(b) a voluntarily surrendered license, except that a voluntarily surrendered license may
not be reinstated after the license period in which the license is voluntarily surrendered.
(3) Unless otherwise stated in a written agreement for the voluntary surrender of a
license, submission and acceptance of a voluntary surrender of a license does not prevent the
department from pursuing additional disciplinary or other action authorized under:
(a) this title; or
(b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(4) A line of authority issued under this chapter remains in force until:
(a) the qualifications pertaining to a line of authority are no longer met by the licensee;
or
(b) the supporting license type:
(i) is revoked or suspended under Subsection (5);
(ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action;
(iii) lapses under Section 
31A-23a-113
; or
(iv) is voluntarily surrendered; or
(c) the licensee dies or is adjudicated incompetent as defined under:
(i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
(ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
Minors.
(5) (a) If the commissioner makes a finding under Subsection (5)(b), as part of an
adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
commissioner may:
(i) revoke:
(A) a license; or
(B) a line of authority;
(ii) suspend for a specified period of 12 months or less:
(A) a license; or
(B) a line of authority;
(iii) limit in whole or in part:
(A) a license; or
(B) a line of authority; or
(iv) deny a license application.
(b) The commissioner may take an action described in Subsection (5)(a) if the
commissioner finds that the licensee:
(i) is unqualified for a license or line of authority under Section 
31A-23a-104
,
31A-23a-105
, or 
31A-23a-107
;
(ii) violates:
(A) an insurance statute;
(B) a rule that is valid under Subsection 
31A-2-201
(3); or
(C) an order that is valid under Subsection 
31A-2-201
(4);
(iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
delinquency proceedings in any state;
(iv) fails to pay a final judgment rendered against the person in this state within 60
days after the day on which the judgment became final;
(v) fails to meet the same good faith obligations in claims settlement that is required of
admitted insurers;
(vi) is affiliated with and under the same general management or interlocking
directorate or ownership as another insurance producer that transacts business in this state
without a license;
(vii) refuses:
(A) to be examined; or
(B) to produce its accounts, records, and files for examination;
(viii) has an officer who refuses to:
(A) give information with respect to the insurance producer's affairs; or
(B) perform any other legal obligation as to an examination;
(ix) provides information in the license application that is:
(A) incorrect;
(B) misleading;
(C) incomplete; or
(D) materially untrue;
(x) violates an insurance law, valid rule, or valid order of another [
state's insurance
department
] 
regulatory agency in any jurisdiction
;
(xi) obtains or attempts to obtain a license through misrepresentation or fraud;
(xii) improperly withholds, misappropriates, or converts money or properties received
in the course of doing insurance business;
(xiii) intentionally misrepresents the terms of an actual or proposed:
(A) insurance contract;
(B) application for insurance; or
(C) life settlement;
(xiv) is convicted of a felony;
(xv) admits or is found to have committed an insurance unfair trade practice or fraud;
(xvi) in the conduct of business in this state or elsewhere:
(A) uses fraudulent, coercive, or dishonest practices; or
(B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
(xvii) has an insurance license, or its equivalent, denied, suspended, or revoked in
another state, province, district, or territory;
(xviii) forges another's name to:
(A) an application for insurance; or
(B) a document related to an insurance transaction;
(xix) improperly uses notes or another reference material to complete an examination
for an insurance license;
(xx) knowingly accepts insurance business from an individual who is not licensed;
(xxi) fails to comply with an administrative or court order imposing a child support
obligation;
(xxii) fails to:
(A) pay state income tax; or
(B) comply with an administrative or court order directing payment of state income
tax;
(xxiii) violates or permits others to violate the federal Violent Crime Control and Law
Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and therefore under 18 U.S.C. Sec. 1033 is
prohibited from engaging in the business of insurance; or
(xxiv) engages in a method or practice in the conduct of business that endangers the
legitimate interests of customers and the public.
(c) For purposes of this section, if a license is held by an agency, both the agency itself
and any individual designated under the license are considered to be the holders of the license.
(d) If an individual designated under the agency license commits an act or fails to
perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
the commissioner may suspend, revoke, or limit the license of:
(i) the individual;
(ii) the agency, if the agency:
(A) is reckless or negligent in its supervision of the individual; or
(B) knowingly participates in the act or failure to act that is the ground for suspending,
revoking, or limiting the license; or
(iii) (A) the individual; and
(B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
(6) A licensee under this chapter is subject to the penalties for acting as a licensee
without a license if:
(a) the licensee's license is:
(i) revoked;
(ii) suspended;
(iii) limited;
(iv) surrendered in lieu of administrative action;
(v) lapsed; or
(vi) voluntarily surrendered; and
(b) the licensee:
(i) continues to act as a licensee; or
(ii) violates the terms of the license limitation.
(7) A licensee under this chapter shall immediately report to the commissioner:
(a) a revocation, suspension, or limitation of the person's license in another state, the
District of Columbia, or a territory of the United States;
(b) the imposition of a disciplinary sanction imposed on that person by another state,
the District of Columbia, or a territory of the United States; or
(c) a judgment or injunction entered against that person on the basis of conduct
involving:
(i) fraud;
(ii) deceit;
(iii) misrepresentation; or
(iv) a violation of an insurance law or rule.
(8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
license in lieu of administrative action may specify a time, not to exceed five years, within
which the former licensee may not apply for a new license.
(b) If no time is specified in an order or agreement described in Subsection (8)(a), the
former licensee may not apply for a new license for five years from the day on which the order
or agreement is made without the express approval by the commissioner.
(9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
a license issued under this part if so ordered by a court.
(10) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
Section 24. Section 
31A-23a-202
 is amended to read:
31A-23a-202.
Continuing education requirements.
(1) Pursuant to this section, the commissioner shall by rule prescribe the continuing
education requirements for a producer and a consultant.
(2) (a) The commissioner may not state a continuing education requirement in terms of
formal education.
(b) The commissioner may state a continuing education requirement in terms of hours
of insurance-related instruction received.
(c) Insurance-related formal education may be a substitute, in whole or in part, for the
hours required under Subsection (2)(b).
(3) (a) The commissioner shall impose continuing education requirements in
accordance with a two-year licensing period in which the licensee meets the requirements of
this Subsection (3).
(b) (i) Except as provided in this section, the continuing education requirements shall
require:
(A) that a licensee complete 24 credit hours of continuing education for every two-year
licensing period;
(B) that 3 of the 24 credit hours described in Subsection (3)(b)(i)(A) be ethics courses;
and
(C) that the licensee complete at least half of the required hours through classroom
hours of insurance-related instruction.
(ii) An hour of continuing education in accordance with Subsection (3)(b)(i) may be
obtained through:
(A) classroom attendance;
(B) home study;
(C) watching a video recording;
(D) experience credit; or
(E) another method provided by rule.
(iii) (A) Notwithstanding Subsections (3)(b)(i)(A) and (B), an individual title insurance
producer is required to complete 12 credit hours of continuing education for every two-year
licensing period, with 3 of the credit hours being ethics courses unless the individual title
insurance producer is licensed in this state as an individual title insurance producer for 20 or
more consecutive years.
(B) If an individual title insurance producer is licensed in this state as an individual
title insurance producer for 20 or more consecutive years, the individual title insurance
producer is required to complete 6 credit hours of continuing education for every two-year
licensing period, with 3 of the credit hours being ethics courses.
(C) Notwithstanding Subsection (3)(b)(iii)(A) or (B), an individual title insurance
producer is considered to have met the continuing education requirements imposed under
Subsection (3)(b)(iii)(A) or (B) if 
at the time of license renewal
 the individual title insurance
producer:
(I) 
provides the department evidence that the individual title insurance producer
 is an
active member in good standing with the Utah State Bar;
(II) is in compliance with the continuing education requirements of the Utah State Bar;
and
(III) if requested by the department, provides the department evidence that the
individual title insurance producer complied with the continuing education requirements of the
Utah State Bar.
(c) A licensee may obtain continuing education hours at any time during the two-year
licensing period.
(d) (i) A licensee is exempt from continuing education requirements under this section
if:
(A) the licensee was first licensed before December 31, 1982;
(B) the license does not have a continuous lapse for a period of more than one year,
except for a license for which the licensee has had an exemption approved before May 11,
2011;
(C) the licensee requests an exemption from the department; and
(D) the department approves the exemption.
(ii) If the department approves the exemption under Subsection (3)(d)(i), the licensee is
not required to apply again for the exemption.
(e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commissioner shall, by rule:
(i) publish a list of insurance professional designations whose continuing education
requirements can be used to meet the requirements for continuing education under Subsection
(3)(b);
(ii) authorize a continuing education provider or a state or national professional
producer or consultant association to:
(A) offer a qualified program for a license type or line of authority on a geographically
accessible basis; and
(B) collect a reasonable fee for funding and administration of a continuing education
program, subject to the review and approval of the commissioner; and
(iii) provide that membership by a producer or consultant in a state or national
professional producer or consultant association is considered a substitute for the equivalent of
two hours for each year during which the producer or consultant is a member of the
professional association, except that the commissioner may not give more than two hours of
continuing education credit in a year regardless of the number of professional associations of
which the producer or consultant is a member.
(f) A fee permitted under Subsection (3)(e)(ii)(B) that is charged for attendance at a
professional producer or consultant association program may be less for an association
member, on the basis of the member's affiliation expense, but shall preserve the right of a
nonmember to attend without affiliation.
(4) The commissioner shall approve a continuing education provider or 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 set the processes and procedures for continuing education provider
registration and course approval.
(6) The requirements of this section apply only to a producer or consultant who is an
individual.
(7) A nonresident producer or consultant is considered to have satisfied this state's
continuing education requirements if the nonresident producer or consultant satisfies the
nonresident producer's or consultant's home state's continuing education requirements for a
licensed insurance producer or consultant.
(8) A producer or consultant subject to this section shall keep documentation of
completing the continuing education requirements of this section for two years after the end of
the two-year licensing period to which the continuing education applies.
Section 25. Section 
31A-23a-206
 is amended to read:
31A-23a-206.
Special requirements for variable contracts line of authority.
(1) Before applying for a variable contracts line of authority:
(a) a producer shall be licensed under Section 
61-1-3
 as a:
(i) broker-dealer; or
(ii) broker-dealer agent; and
(b) a consultant shall be licensed under Section 
61-1-3
 as an:
(i) investment adviser; or
(ii) investment adviser representative.
(2) A producer's or consultant's variable contracts line of authority is [
revoked
]
canceled
 on the day the producer's or consultant's securities related license under Section
61-1-3
 is no longer [
valid
] 
active
.
Section 26. Section 
31A-23a-410
 is amended to read:
31A-23a-410.
Insurer's liability if insured pays premium to a licensee or group
policyholder.
(1) Subject to Subsections (2) and (5), as between the insurer and the insured, the
insurer is considered to have received the premium and is liable to the insured for losses
covered by the insurance and for any unearned premiums upon cancellation of the insurance if
an insurer, including a surplus lines insurer:
(a) assumes a risk; and
(b) the premium for that insurance is received by:
(i) a licensee who placed the insurance;
(ii) a group policyholder;
(iii) an employer who deducts part or all of the premium from an employee's wages or
salary; or
(iv) an employer who pays all or part of the premium for an employee.
(2) Subsection (1) does not apply if:
(a) the insured pays a licensee, knowing the licensee does not intend to submit the
premium to the insurer; or
(b) the insured has premium withheld from the insured's wages or salary knowing the
employer does not intend to submit it to the insurer.
(3) (a) In the case of [
an employer
] 
a group policyholder
 who has received the premium
[
by deducting all or part of it from the wages or salaries of the certificate holders
], the insurer
may terminate its liability by giving notice of coverage termination to:
(i) the certificate holders;
(ii) the policyholder; and
(iii) the producer, if any, for the policy.
(b) The insurer may not send the notice required by Subsection (3)(a) to a certificate
holder before 20 days after the day on which premium is due and unpaid.
(c) The liability of the insurer for the losses covered by the insurance terminates at the
later of:
(i) the last day of the coverage period for which premium has been [
withheld
] 
received
by the [
employer
] 
group policyholder
;
(ii) 10 days after the date the insurer mails notice to the certificate holder that coverage
has terminated; or
(iii) if the insurer fails to provide notice as required by this Subsection (3), 45 days
from the last date for which premium is received.
(4) Despite [
an employer's
] 
a group policyholder's
 collection of premium under
Subsection (1), the responsibility of an insurer to continue to cover the losses covered by the
insurance to group policy certificate holders terminates upon the effective date of notice from
the policyholder that:
(a) coverage of a similar kind and quality has been obtained from another insurer; or
(b) the policyholder is electing to voluntarily terminate the certificate holder's coverage
and has given the [
employees
] 
certificate holder's
 notice of the termination.
(5) If the insurer is obligated to pay a claim pursuant to this section, the licensee or
[
employer
] 
group policyholder
 who received the premium and failed to forward it is obligated
to the insurer for the entire unpaid premium due under the policy together with reasonable
expenses of suit and reasonable attorney fees.
(6) If, under an employee health insurance plan, an employee builds up credit for future
coverage because the employee has not used the policy protection, or in some other way, the
insurer is obligated to the employee for that future coverage earned while the policy was in full
effect.
(7) (a) Notwithstanding that an insurer is liable for losses as provided in this section,
this section applies only to apportion the liability for the losses described in this section.
(b) This section does not:
(i) extend a policy or coverage beyond its date of termination; or
(ii) alter or amend a provision of a policy.
Section 27. Section 
31A-23a-501
 is amended to read:
31A-23a-501.
Licensee compensation.
(1) As used in this section:
(a) "Commission compensation" includes funds paid to or credited for the benefit of a
licensee from:
(i) commission amounts deducted from insurance premiums on insurance sold by or
placed through the licensee;
(ii) commission amounts received from an insurer or another licensee as a result of the
sale or placement of insurance; or
(iii) overrides, bonuses, contingent bonuses, or contingent commissions received from
an insurer or another licensee as a result of the sale or placement of insurance.
(b) (i) "Compensation from an insurer or third party administrator" means
commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
gifts, prizes, or any other form of valuable consideration:
(A) whether or not payable pursuant to a written agreement; and
(B) received from:
(I) an insurer; or
(II) a third party to the transaction for the sale or placement of insurance.
(ii) "Compensation from an insurer or third party administrator" does not mean
compensation from a customer that is:
(A) a fee or pass-through costs as provided in Subsection (1)(e); or
(B) a fee or amount collected by or paid to the producer that does not exceed an
amount established by the commissioner by administrative rule.
(c) (i) "Customer" means:
(A) the person signing the application or submission for insurance; or
(B) the authorized representative of the insured actually negotiating the placement of
insurance with the producer.
(ii) "Customer" does not mean a person who is a participant or beneficiary of:
(A) an employee benefit plan; or
(B) a group or blanket insurance policy or group annuity contract sold, solicited, or
negotiated by the producer or affiliate.
(d) (i) "Noncommission compensation" includes all funds paid to or credited for the
benefit of a licensee other than commission compensation.
(ii) "Noncommission compensation" does not include charges for pass-through costs
incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
(e) "Pass-through costs" include:
(i) costs for copying documents to be submitted to the insurer; and
(ii) bank costs for processing cash or credit card payments.
(2) A licensee may receive from an insured or from a person purchasing an insurance
policy, noncommission compensation if the noncommission compensation is stated on a
separate, written disclosure.
(a) The disclosure required by this Subsection (2) shall:
(i) include the signature of the insured or prospective insured acknowledging the
noncommission compensation;
(ii) clearly specify:
(A) the amount of any known noncommission compensation; and
(B) the type and amount, if known, of any potential and contingent noncommission
compensation; and
(iii) be provided to the insured or prospective insured before the performance of the
service.
(b) Noncommission compensation shall be:
(i) limited to actual or reasonable expenses incurred for services; and
(ii) uniformly applied to all insureds or prospective insureds in a class or classes of
business or for a specific service or services.
(c) A copy of the signed disclosure required by this Subsection (2) shall be maintained
by any licensee who collects or receives the noncommission compensation or any portion of
the noncommission compensation.
(d) All accounting records relating to noncommission compensation shall be
maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
(3) (a) A licensee may receive noncommission compensation when acting as a
producer for the insured in connection with the actual sale or placement of insurance if:
(i) the producer and the insured have agreed on the producer's noncommission
compensation; and
(ii) the producer has disclosed to the insured the existence and source of any other
compensation that accrues to the producer as a result of the transaction.
(b) The disclosure required by this Subsection (3) shall:
(i) include the signature of the insured or prospective insured acknowledging the
noncommission compensation;
(ii) clearly specify:
(A) the amount of any known noncommission compensation;
(B) the type and amount, if known, of any potential and contingent noncommission
compensation; and
(C) the existence and source of any other compensation; and
(iii) be provided to the insured or prospective insured before the performance of the
service.
(c) The following additional noncommission compensation is authorized:
(i) compensation received by a producer of a compensated corporate surety who under
procedures approved by a rule or order of the commissioner is paid by surety bond principal
debtors for extra services;
(ii) compensation received by an insurance producer who is also licensed as a public
adjuster under Section 
31A-26-203
, for services performed for an insured in connection with a
claim adjustment, so long as the producer does not receive or is not promised compensation for
aiding in the claim adjustment prior to the occurrence of the claim;
(iii) compensation received by a consultant as a consulting fee, provided the consultant
complies with the requirements of Section 
31A-23a-401
; or
(iv) other compensation arrangements approved by the commissioner after a finding
that they do not violate Section 
31A-23a-401
 and are not harmful to the public.
(d) Subject to Section 
31A-23a-402.5
, a producer for the insured may receive
compensation from an insured through an insurer, for the negotiation and sale of a health
benefit plan, if there is a separate written agreement between the insured and the licensee for
the compensation. An insurer who passes through the compensation from the insured to the
licensee under this Subsection (3)(d) is not providing direct or indirect compensation or
commission compensation to the licensee.
(4) (a) For purposes of this Subsection (4):
(i) "Large customer" means an employer who, with respect to a calendar year and to a
plan year:
(A) employed an average of at least 100 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.
(ii) "Producer" includes:
(A) a producer;
(B) an affiliate of a producer; or
(C) a consultant.
(b) A producer may not accept or receive any compensation from an insurer or third
party administrator for the initial placement of a health benefit plan, other than a hospital
confinement indemnity policy, unless prior to a large customer's initial purchase of the health
benefit plan the producer discloses in writing to the large customer that the producer will
receive compensation from the insurer or third party administrator for the placement of
insurance, including the amount or type of compensation known to the producer at the time of
the disclosure.
(c) A producer shall:
(i) obtain the large customer's signed acknowledgment that the disclosure under
Subsection (4)(b) was made to the large customer; or
(ii) (A) sign a statement that the disclosure required by Subsection (4)(b) was made to
the large customer; and
(B) keep the signed statement on file in the producer's office while the health benefit
plan placed with the large customer is in force.
(d) A licensee who collects or receives any part of the compensation from an insurer or
third party administrator in a manner that facilitates an audit shall, while the health benefit plan
placed with the large customer is in force, maintain a copy of:
(i) the signed acknowledgment described in Subsection (4)(c)(i); or
(ii) the signed statement described in Subsection (4)(c)(ii).
(e) Subsection (4)(c) does not apply to:
(i) a person licensed as a producer who acts only as an intermediary between an insurer
and the customer's producer, including a managing general agent; or
(ii) the placement of insurance in a secondary or residual market.
(f) (i) A producer shall provide to a large customer listed in this Subsection (4)(f) an
annual accounting, as defined by rule made by the department in accordance with Title 63G,
Chapter 3, Utah Administrative Rulemaking Act, of all amounts the producer receives in
commission compensation from an insurer or third party administrator as a result of the sale or
placement of [
insurance
] 
a health benefit plan
 to a large customer that is:
(A) the state;
(B) a political subdivision or instrumentality of the state or a combination thereof
primarily engaged in educational activities or the administration or servicing of educational
activities, including the State Board of Education and its instrumentalities, an institution of
higher education and its branches, a school district and its instrumentalities, a vocational and
technical school, and an entity arising out of a consolidation agreement between entities
described under this Subsection (4)(f)(i)(B);
(C) a county, city, town, local district under Title 17B, Limited Purpose Local
Government Entities - Local Districts, special service district under Title 17D, Chapter 1,
Special Service District Act, an entity created by an interlocal cooperation agreement under
Title 11, Chapter 13, Interlocal Cooperation Act, or any other governmental entity designated
in statute as a political subdivision of the state; or
(D) a quasi-public corporation, that has the same meaning as defined in Section
63E-1-102
.
(ii) The department shall pattern the annual accounting required by this Subsection
(4)(f) on the insurance related information on Internal Revenue Service Form 5500 and its
relevant attachments.
(g) At the request of the department, a producer shall provide the department a copy of:
(i) a disclosure required by this Subsection (4); or
(ii) an Internal Revenue Service Form 5500 and its relevant attachments.
(5) This section does not alter the right of any licensee to recover from an insured the
amount of any premium due for insurance effected by or through that licensee or to charge a
reasonable rate of interest upon past-due accounts.
(6) This section does not apply to bail bond producers or bail enforcement agents as
defined in Section 
31A-35-102
.
(7) A licensee may not receive noncommission compensation from an insured or
enrollee for providing a service or engaging in an act that is required to be provided or
performed in order to receive commission compensation, except for the surplus lines
transactions that do not receive commissions.
Section 28. Section 
31A-23b-401
 is amended to read:
31A-23b-401.
Revoking, suspending, surrendering, lapsing, limiting, or otherwise
terminating a license -- Rulemaking for renewal or reinstatement.
(1) A license as a navigator under this chapter remains in force until:
(a) revoked or suspended under Subsection (4);
(b) surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action;
(c) the licensee dies or is adjudicated incompetent as defined under:
(i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
(ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
Minors;
(d) lapsed under this section; or
(e) voluntarily surrendered.
(2) The following may be reinstated within one year after the day on which the license
is no longer in force:
(a) a lapsed license; or
(b) a voluntarily surrendered license, except that a voluntarily surrendered license may
not be reinstated after the license period in which the license is voluntarily surrendered.
(3) Unless otherwise stated in a written agreement for the voluntary surrender of a
license, submission and acceptance of a voluntary surrender of a license does not prevent the
department from pursuing additional disciplinary or other action authorized under:
(a) this title; or
(b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
commissioner may:
(i) revoke a license;
(ii) suspend a license for a specified period of 12 months or less;
(iii) limit a license in whole or in part; or
(iv) deny a license application.
(b) The commissioner may take an action described in Subsection (4)(a) if the
commissioner finds that the licensee:
(i) is unqualified for a license under Section 
31A-23b-204
, 
31A-23b-205
, or
31A-23b-206
;
(ii) violated:
(A) an insurance statute;
(B) a rule that is valid under Subsection 
31A-2-201
(3); or
(C) an order that is valid under Subsection 
31A-2-201
(4);
(iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
delinquency proceedings in any state;
(iv) failed to pay a final judgment rendered against the person in this state within 60
days after the day on which the judgment became final;
(v) refused:
(A) to be examined; or
(B) to produce its accounts, records, and files for examination;
(vi) had an officer who refused to:
(A) give information with respect to the navigator's affairs; or
(B) perform any other legal obligation as to an examination;
(vii) provided information in the license application that is:
(A) incorrect;
(B) misleading;
(C) incomplete; or
(D) materially untrue;
(viii) violated an insurance law, valid rule, or valid order of another [
state's insurance
department
] 
regulatory agency in any jurisdiction
;
(ix) obtained or attempted to obtain a license through misrepresentation or fraud;
(x) improperly withheld, misappropriated, or converted money or properties received
in the course of doing insurance business;
(xi) intentionally misrepresented the terms of an actual or proposed:
(A) insurance contract;
(B) application for insurance; or
(C) application for public program;
(xii) is convicted of a felony;
(xiii) admitted or is found to have committed an insurance unfair trade practice or
fraud;
(xiv) in the conduct of business in this state or elsewhere:
(A) used fraudulent, coercive, or dishonest practices; or
(B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
(xv) had an insurance license, navigator license, or its equivalent, denied, suspended,
or revoked in another state, province, district, or territory;
(xvi) forged another's name to:
(A) an application for insurance;
(B) a document related to an insurance transaction;
(C) a document related to an application for a public program; or
(D) a document related to an application for premium subsidies;
(xvii) improperly used notes or another reference material to complete an examination
for a license;
(xviii) knowingly accepted insurance business from an individual who is not licensed;
(xix) failed to comply with an administrative or court order imposing a child support
obligation;
(xx) failed to:
(A) pay state income tax; or
(B) comply with an administrative or court order directing payment of state income
tax;
(xxi) violated or permitted others to violate the federal Violent Crime Control and Law
Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and therefore under 18 U.S.C. Sec. 1033 is
prohibited from engaging in the business of insurance; or
(xxii) engaged in a method or practice in the conduct of business that endangered the
legitimate interests of customers and the public.
(c) For purposes of this section, if a license is held by an agency, both the agency itself
and any individual designated under the license are considered to be the holders of the license.
(d) If an individual designated under the agency license commits an act or fails to
perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
the commissioner may suspend, revoke, or limit the license of:
(i) the individual;
(ii) the agency, if the agency:
(A) is reckless or negligent in its supervision of the individual; or
(B) knowingly participates in the act or failure to act that is the ground for suspending,
revoking, or limiting the license; or
(iii) (A) the individual; and
(B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
(5) A licensee under this chapter is subject to the penalties for acting as a licensee
without a license if:
(a) the licensee's license is:
(i) revoked;
(ii) suspended;
(iii) surrendered in lieu of administrative action;
(iv) lapsed; or
(v) voluntarily surrendered; and
(b) the licensee:
(i) continues to act as a licensee; or
(ii) violates the terms of the license limitation.
(6) A licensee under this chapter shall immediately report to the commissioner:
(a) a revocation, suspension, or limitation of the person's license in another state, the
District of Columbia, or a territory of the United States;
(b) the imposition of a disciplinary sanction imposed on that person by another state,
the District of Columbia, or a territory of the United States; or
(c) a judgment or injunction entered against that person on the basis of conduct
involving:
(i) fraud;
(ii) deceit;
(iii) misrepresentation; or
(iv) a violation of an insurance law or rule.
(7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
license in lieu of administrative action may specify a time, not to exceed five years, within
which the former licensee may not apply for a new license.
(b) If no time is specified in an order or agreement described in Subsection (7)(a), the
former licensee may not apply for a new license for five years from the day on which the order
or agreement is made without the express approval of the commissioner.
(8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
a license issued under this chapter if so ordered by a court.
(9) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
Section 29. Section 
31A-25-208
 is amended to read:
31A-25-208.
Revoking, suspending, surrendering, lapsing, limiting, or otherwise
terminating a license -- Rulemaking for renewal and reinstatement.
(1) A license type issued under this chapter remains in force until:
(a) revoked or suspended under Subsection (4);
(b) surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action;
(c) the licensee dies or is adjudicated incompetent as defined under:
(i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
(ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
Minors;
(d) lapsed under Section 
31A-25-210
; or
(e) voluntarily surrendered.
(2) The following may be reinstated within one year after the day on which the license
is no longer in force:
(a) a lapsed license; or
(b) a voluntarily surrendered license, except that a voluntarily surrendered license may
not be reinstated after the license period in which the license is voluntarily surrendered.
(3) Unless otherwise stated in a written agreement for the voluntary surrender of a
license, submission and acceptance of a voluntary surrender of a license does not prevent the
department from pursuing additional disciplinary or other action authorized under:
(a) this title; or
(b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
commissioner may:
(i) revoke a license;
(ii) suspend a license for a specified period of 12 months or less;
(iii) limit a license in whole or in part; or
(iv) deny a license application.
(b) The commissioner may take an action described in Subsection (4)(a) if the
commissioner finds that the licensee:
(i) is unqualified for a license under Section 
31A-25-202
, 
31A-25-203
, or 
31A-25-204
;
(ii) has violated:
(A) an insurance statute;
(B) a rule that is valid under Subsection 
31A-2-201
(3); or
(C) an order that is valid under Subsection 
31A-2-201
(4);
(iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
delinquency proceedings in any state;
(iv) fails to pay a final judgment rendered against the person in this state within 60
days after the day on which the judgment became final;
(v) fails to meet the same good faith obligations in claims settlement that is required of
admitted insurers;
(vi) is affiliated with and under the same general management or interlocking
directorate or ownership as another third party administrator that transacts business in this state
without a license;
(vii) refuses:
(A) to be examined; or
(B) to produce its accounts, records, and files for examination;
(viii) has an officer who refuses to:
(A) give information with respect to the third party administrator's affairs; or
(B) perform any other legal obligation as to an examination;
(ix) provides information in the license application that is:
(A) incorrect;
(B) misleading;
(C) incomplete; or
(D) materially untrue;
(x) has violated an insurance law, valid rule, or valid order of another [
state's insurance
department
] 
regulatory agency in any jurisdiction
;
(xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
(xii) has improperly withheld, misappropriated, or converted money or properties
received in the course of doing insurance business;
(xiii) has intentionally misrepresented the terms of an actual or proposed:
(A) insurance contract; or
(B) application for insurance;
(xiv) has been convicted of a felony;
(xv) has admitted or been found to have committed an insurance unfair trade practice
or fraud;
(xvi) in the conduct of business in this state or elsewhere has:
(A) used fraudulent, coercive, or dishonest practices; or
(B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
(xvii) has had an insurance license or its equivalent, denied, suspended, or revoked in
any other state, province, district, or territory;
(xviii) has forged another's name to:
(A) an application for insurance; or
(B) a document related to an insurance transaction;
(xix) has improperly used notes or any other reference material to complete an
examination for an insurance license;
(xx) has knowingly accepted insurance business from an individual who is not
licensed;
(xxi) has failed to comply with an administrative or court order imposing a child
support obligation;
(xxii) has failed to:
(A) pay state income tax; or
(B) comply with an administrative or court order directing payment of state income
tax;
(xxiii) has violated or permitted others to violate the federal Violent Crime Control and
Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and therefore under 18 U.S.C. Sec. 1033 is
prohibited from engaging in the business of insurance; or
(xxiv) has engaged in methods and practices in the conduct of business that endanger
the legitimate interests of customers and the public.
(c) For purposes of this section, if a license is held by an agency, both the agency itself
and any individual designated under the license are considered to be the holders of the agency
license.
(d) If an individual designated under the agency license commits an act or fails to
perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
the commissioner may suspend, revoke, or limit the license of:
(i) the individual;
(ii) the agency if the agency:
(A) is reckless or negligent in its supervision of the individual; or
(B) knowingly participated in the act or failure to act that is the ground for suspending,
revoking, or limiting the license; or
(iii) (A) the individual; and
(B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
(5) A licensee under this chapter is subject to the penalties for acting as a licensee
without a license if:
(a) the licensee's license is:
(i) revoked;
(ii) suspended;
(iii) limited;
(iv) surrendered in lieu of administrative action;
(v) lapsed; or
(vi) voluntarily surrendered; and
(b) the licensee:
(i) continues to act as a licensee; or
(ii) violates the terms of the license limitation.
(6) A licensee under this chapter shall immediately report to the commissioner:
(a) a revocation, suspension, or limitation of the person's license in any other state, the
District of Columbia, or a territory of the United States;
(b) the imposition of a disciplinary sanction imposed on that person by any other state,
the District of Columbia, or a territory of the United States; or
(c) a judgment or injunction entered against the person on the basis of conduct
involving:
(i) fraud;
(ii) deceit;
(iii) misrepresentation; or
(iv) a violation of an insurance law or rule.
(7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
license in lieu of administrative action may specify a time, not to exceed five years, within
which the former licensee may not apply for a new license.
(b) If no time is specified in the order or agreement described in Subsection (7)(a), the
former licensee may not apply for a new license for five years from the day on which the order
or agreement is made without the express approval of the commissioner.
(8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
a license issued under this part if so ordered by the court.
(9) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
Section 30. Section 
31A-26-213
 is amended to read:
31A-26-213.
Revoking, suspending, surrendering, lapsing, limiting, or otherwise
terminating a license -- Rulemaking for renewal or reinstatement.
(1) A license type issued under this chapter remains in force until:
(a) revoked or suspended under Subsection (5);
(b) surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action;
(c) the licensee dies or is adjudicated incompetent as defined under:
(i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
(ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
Minors;
(d) lapsed under Section 
31A-26-214.5
; or
(e) voluntarily surrendered.
(2) The following may be reinstated within one year after the day on which the license
is no longer in force:
(a) a lapsed license; or
(b) a voluntarily surrendered license, except that a voluntarily surrendered license may
not be reinstated after the license period in which it is voluntarily surrendered.
(3) Unless otherwise stated in a written agreement for the voluntary surrender of a
license, submission and acceptance of a voluntary surrender of a license does not prevent the
department from pursuing additional disciplinary or other action authorized under:
(a) this title; or
(b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(4) A license classification issued under this chapter remains in force until:
(a) the qualifications pertaining to a license classification are no longer met by the
licensee; or
(b) the supporting license type:
(i) is revoked or suspended under Subsection (5); or
(ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action.
(5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
commissioner may:
(i) revoke:
(A) a license; or
(B) a license classification;
(ii) suspend for a specified period of 12 months or less:
(A) a license; or
(B) a license classification;
(iii) limit in whole or in part:
(A) a license; or
(B) a license classification; or
(iv) deny a license application.
(b) The commissioner may take an action described in Subsection (5)(a) if the
commissioner finds that the licensee:
(i) is unqualified for a license or license classification under Section 
31A-26-202
,
31A-26-203
, 
31A-26-204
, or 
31A-26-205
;
(ii) has violated:
(A) an insurance statute;
(B) a rule that is valid under Subsection 
31A-2-201
(3); or
(C) an order that is valid under Subsection 
31A-2-201
(4);
(iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
delinquency proceedings in any state;
(iv) fails to pay a final judgment rendered against the person in this state within 60
days after the judgment became final;
(v) fails to meet the same good faith obligations in claims settlement that is required of
admitted insurers;
(vi) is affiliated with and under the same general management or interlocking
directorate or ownership as another insurance adjuster that transacts business in this state
without a license;
(vii) refuses:
(A) to be examined; or
(B) to produce its accounts, records, and files for examination;
(viii) has an officer who refuses to:
(A) give information with respect to the insurance adjuster's affairs; or
(B) perform any other legal obligation as to an examination;
(ix) provides information in the license application that is:
(A) incorrect;
(B) misleading;
(C) incomplete; or
(D) materially untrue;
(x) has violated an insurance law, valid rule, or valid order of another [
state's insurance
department
] 
regulatory agency in any jurisdiction
;
(xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
(xii) has improperly withheld, misappropriated, or converted money or properties
received in the course of doing insurance business;
(xiii) has intentionally misrepresented the terms of an actual or proposed:
(A) insurance contract; or
(B) application for insurance;
(xiv) has been convicted of a felony;
(xv) has admitted or been found to have committed an insurance unfair trade practice
or fraud;
(xvi) in the conduct of business in this state or elsewhere has:
(A) used fraudulent, coercive, or dishonest practices; or
(B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
(xvii) has had an insurance license, or its equivalent, denied, suspended, or revoked in
any other state, province, district, or territory;
(xviii) has forged another's name to:
(A) an application for insurance; or
(B) a document related to an insurance transaction;
(xix) has improperly used notes or any other reference material to complete an
examination for an insurance license;
(xx) has knowingly accepted insurance business from an individual who is not
licensed;
(xxi) has failed to comply with an administrative or court order imposing a child
support obligation;
(xxii) has failed to:
(A) pay state income tax; or
(B) comply with an administrative or court order directing payment of state income
tax;
(xxiii) has violated or permitted others to violate the federal Violent Crime Control and
Law Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and therefore under 18 U.S.C. Sec. 1033 is
prohibited from engaging in the business of insurance; or
(xxiv) has engaged in methods and practices in the conduct of business that endanger
the legitimate interests of customers and the public.
(c) For purposes of this section, if a license is held by an agency, both the agency itself
and any individual designated under the license are considered to be the holders of the license.
(d) If an individual designated under the agency license commits an act or fails to
perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
the commissioner may suspend, revoke, or limit the license of:
(i) the individual;
(ii) the agency, if the agency:
(A) is reckless or negligent in its supervision of the individual; or
(B) knowingly participated in the act or failure to act that is the ground for suspending,
revoking, or limiting the license; or
(iii) (A) the individual; and
(B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
(6) A licensee under this chapter is subject to the penalties for conducting an insurance
business without a license if:
(a) the licensee's license is:
(i) revoked;
(ii) suspended;
(iii) limited;
(iv) surrendered in lieu of administrative action;
(v) lapsed; or
(vi) voluntarily surrendered; and
(b) the licensee:
(i) continues to act as a licensee; or
(ii) violates the terms of the license limitation.
(7) A licensee under this chapter shall immediately report to the commissioner:
(a) a revocation, suspension, or limitation of the person's license in any other state, the
District of Columbia, or a territory of the United States;
(b) the imposition of a disciplinary sanction imposed on that person by any other state,
the District of Columbia, or a territory of the United States; or
(c) a judgment or injunction entered against that person on the basis of conduct
involving:
(i) fraud;
(ii) deceit;
(iii) misrepresentation; or
(iv) a violation of an insurance law or rule.
(8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
license in lieu of administrative action may specify a time not to exceed five years within
which the former licensee may not apply for a new license.
(b) If no time is specified in the order or agreement described in Subsection (8)(a), the
former licensee may not apply for a new license for five years without the express approval of
the commissioner.
(9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
a license issued under this part if so ordered by a court.
(10) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
Section 31. Section 
31A-27a-601
 is amended to read:
31A-27a-601.
Filing of claims.
(1) (a) Subject to the other provisions of this Subsection (1), proof of a claim shall be
filed with the liquidator in the form required by Section 
31A-27a-602
 on or before the last day
for filing specified in the notice required under Section 
31A-27a-406
.
(b) The last day for filing specified in the notice may not be later than 18 months after
the day on which the order of liquidation is entered unless the receivership court, for good
cause shown, extends the time.
(c) Proof of a claim for the following does not need to be filed unless the liquidator
expressly requires filing of proof:
(i) cash surrender value in life insurance and annuities;
(ii) investment value in life insurance and annuities other than cash surrender value;
and
(iii) any other policy insuring the life of a person.
(d) Only upon application of the liquidator, the receivership court may allow
alternative procedures and requirements for the filing of proof of a claim or for allowing or
proving a claim.
(e) Upon application, if the receivership court dispenses with the requirements of filing
a proof of claim by a person, class, or group of persons, a proof of claim for that person, class,
or group is considered as being filed for all purposes, except that the receivership court's
waiver of proof of claim requirements may not impact guaranty association proof of claim
filing requirements or coverage determinations to the extent that the guaranty association
statute or filing requirements are inconsistent with the receivership court's waiver of proof.
(2) The liquidator may permit a claimant that makes a late filing to share ratably in
distributions, whether past or future, as if the claim were not filed late, to the extent that the
payment will not prejudice the orderly administration of the liquidation, under the following
circumstances:
(a) the eligibility to file a proof of claim was not known to the claimant, and the
claimant files a proof of claim within 90 days after the day on which the claimant first learns of
the eligibility;
(b) (i) a transfer to a creditor is:
(A) avoided under Section 
31A-27a-503
, 
31A-27a-504
, 
31A-27a-506
, or 
31A-27a-507
;
or
(B) voluntarily surrendered under Section 
31A-27a-509
; and
(ii) the filing satisfies the conditions of Section 
31A-27a-509
; or
(c) the valuation of security held by a secured creditor under Section 
31A-27a-610
shows a deficiency and the claim for the deficiency is filed within 30 days after the valuation.
(3) If a reinsurer's reinsurance contract terminates pursuant to Section 
31A-27a-513
:
(a) a claim filed by the receiver which arises from the termination may not be
considered late if the claim is filed within 90 days of the day on which the reinsurance contract
terminates; and
(b) the reinsurer shall receive a ratable share of distributions, whether past or future, as
if the claim described in Subsection (3)(a) is not late.
(4) Notwithstanding any other provision of this chapter, the liquidator may petition the
receivership court, subject to Section 
31A-27a-107
, to set a date certain after which no further
claims may be filed.
(5) A Class 1 claim pursuant to Subsection 
31A-27a-701
(2)(a) is not subject to the
claim filing provisions of this section.
Section 32. Section 
31A-27a-605
 is amended to read:
31A-27a-605.
Allowance of contingent and unliquidated claims.
(1) As used in this section, "claim" means a demand for payment pursuant to Section
31A-27a-601
 under the terms and conditions of a contract issued by the insurer as a result of a
known accident, casualty, disaster, loss, event, or occurrence.
(2) (a) A claim of an insured or third party may be allowed under Section
31A-27a-603
, regardless of the fact that it is contingent or unliquidated if:
(i) any contingency is removed in accordance with Subsection (3); and
(ii) the value of the claim is determined in accordance with Subsection (4).
(b) A claim is contingent if:
(i) the accident, casualty, disaster, loss, event, or occurrence insured, reinsured, or
bonded against occurs on or before the date fixed under Section [
31A-27a-601
] 
31A-27a-401
;
and
(ii) the act or event triggering the insurer's obligation to pay has not occurred as of [
the
]
that
 date [
fixed under Section 
31A-27a-401
].
(c) A claim is unliquidated if the insurer's obligation to pay is established, but the
amount of the claim has not been determined.
(3) (a) Unless the receivership court directs otherwise, a contingent claim may be
allowed if:
(i) the claimant presents proof of the insurer's obligation to pay reasonably satisfactory
to the liquidator; or
(ii) subject to Subsection (3)(b), the claim is based on a cause of action against an
insured of the insurer, and:
(A) it may be reasonably inferred from proof presented upon the claim that the
claimant would be able to obtain a judgment; and
(B) the person furnishes suitable proof.
(b) A contingent claim may not be allowed under Subsection (3)(a)(ii)(B) if the
receivership court for good cause shown shall otherwise direct that no further valid claims can
be made against the insurer arising out of the cause of action other than those already
presented.
(4) (a) An unliquidated claim may be allowed if its amount has been determined.
(b) If the amount of an unliquidated claim filed pursuant to Section 
31A-27a-601
remains undetermined, the valuation of the unliquidated claim may be made by estimate
whenever the liquidator determines that:
(i) liquidation of the claim would unduly delay the administration of the liquidation
proceeding; or
(ii) the administrative expense of processing and adjudicating the claim or group of
claims of a similar type would be unduly excessive when compared with the property that is
estimated to be available for distribution with respect to the claim.
(c) Any estimate shall be based on an accepted method of valuing a claim with
reasonable certainty at the claim's net present value, such as an actuarial evaluation.
(5) (a) Notwithstanding the other provisions of this section, a claim for the value or
breach of a life insurance policy, disability income insurance policy, long-term care insurance
policy, or annuity may not result in or serve as the basis of any liability of a reinsurer of the
insurer.
(b) A reinsurer's liability to the insurer shall be determined exclusively on the basis of
its contracts of reinsurance and Section 
31A-27a-513
.
(6) (a) The liquidator may petition the receivership court to set a date certain before
which all claims under this section shall be final.
(b) In addition to the notice requirements of Section 
31A-27a-107
, the liquidator shall
give notice of the filing of the petition to all claimants with claims that remain contingent or
unliquidated under this section.
Section 33. Section 
31A-30-116
 is amended to read:
31A-30-116.
Essential health benefits.
(1) For purposes of this section, the [
"Affordable Care Act" is as
] 
PPACA means the
same as that term is
 defined in Section [
31A-2-212
] 
31A-1-301
 and includes federal rules
related to the offering of essential health benefits.
(2) The state chooses to designate its own essential health benefits rather than accept a
federal determination of the essential health benefits required to be offered in the individual
and small group market for plans renewed or offered on or after January 1, 2014.
(3) (a) Subject to Subsections (3)(b) and (c), to the extent required by the [
Affordable
Care Act
] 
PPACA
, and after considering public testimony, the Legislature's Health System
Reform Task Force shall recommend to the commissioner, no later than September 1, 2012, a
benchmark plan for the state's essential health benefits based on:
(i) the largest plan by enrollment in any of the three largest small employer group
insurance products in the state's small employer group market;
(ii) any of the largest three state employee health benefit plans by enrollment;
(iii) the largest insured commercial non-Medicaid health maintenance organization
operating in the state; or
(iv) other benchmarks required or permitted by the [
Affordable Care Act
] 
PPACA
.
(b) Notwithstanding the provisions of Subsection 
63N-11-106
(2), based on the
recommendation of the task force under Subsection (3)(a), and within 30 days of the task force
recommendation, the commissioner shall adopt an emergency administrative rule that
designates the essential health benefits that shall be included in a plan offered or renewed on or
after January 1, 2014, in the small employer group and individual markets.
(c) The essential health benefit plan:
(i) shall not include a state mandate if the inclusion of the state mandate would require
the state to contribute to premium subsidies under the [
Affordable Care Act
] 
PPACA
; and
(ii) may add benefits in addition to the benefits included in a benchmark plan described
in Subsection (3)(b) if the additional benefits are mandated under the [
Affordable Care Act
]
PPACA
.
Section 34. Section 
31A-30-209
 is amended to read:
31A-30-209.
Insurance producers and the Health Insurance Exchange.
(1) A producer may be listed on the Health Insurance Exchange as a credentialed
producer if the producer is designated as a credentialed agent for the Health Insurance
Exchange in accordance with Subsection (2).
(2) A producer whose license under this title authorizes the producer to sell accident
and health insurance may be credentialed by the Health Insurance Exchange and may sell any
product on the Health Insurance Exchange, if the producer:
(a) is an appointed producer with:
(i) all carriers that offer a plan in the defined contribution market on the Health
Insurance Exchange; and
(ii) at least one carrier that offers a dental plan on the Health Insurance Exchange; and
(b) completes each year the Health Insurance Exchange training [
that includes training
on premium assistance programs
].
(3) A carrier shall appoint a producer to sell the carrier's products in the defined
contribution arrangement market of the Health Insurance Exchange, within 30 days of the
notice required in Subsection (3)(b), if:
(a) the producer is currently appointed by a majority of the carriers in the Health
Insurance Exchange to sell products either outside or inside of the Health Insurance Exchange;
and
(b) the producer informs the carrier that the producer is:
(i) applying to be appointed to the defined contribution arrangement market in the
Health Insurance Exchange;
(ii) appointed by a majority of the carriers in the defined contribution arrangement
market in the Health Insurance Exchange;
(iii) willing to complete training regarding the carrier's products offered on the defined
contribution arrangement market in the Health Insurance Exchange; and
(iv) willing to sign the contracts and business associate's agreements that the carrier
requires for appointed producers in the Health Insurance Exchange.
Section 35. Section 
31A-31-112
 is enacted to read:
 31A-31-112.
Insurance antifraud plan.
(1) An insurer, as defined in Section 
31A-31-102
, shall prepare, implement, and
maintain an insurance antifraud plan for its operations in this state.
(2) The insurance antifraud plan required by Subsection (1) shall outline specific
procedures, actions, and safeguards that include how the authorized insurer or health
maintenance organization will do each of the following:
(a) detect, investigate, and prevent all forms of insurance fraud, including:
(i) fraud involving its employees or agents;
(ii) fraud resulting from misrepresentations in the application, renewal, or rating of
insurance policies;
(iii) fraudulent claims; and
(iv) breach of security of its data processing systems;
(b) educate employees of fraud detection and the insurance antifraud plan;
(c) provide for fraud investigations, whether through the use of internal fraud
investigators or third-party contractors;
(d) report a suspected fraudulent insurance act, as described in Section 
31A-31-103
, to
the department as required by Section 
31A-31-110
; and
(e) pursue restitution for financial loss caused by insurance fraud.
(3) The commissioner may investigate and examine the records and operations of
authorized insurers and health maintenance organizations to determine if they have
implemented and complied with the insurance antifraud plan.
(4) The commissioner may:
(a) direct any modification to the insurance antifraud plan necessary to comply with the
requirements of this section; and
(b) require action to remedy substantial noncompliance with the insurance antifraud
plan.
Section 36. 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 
or foreign
 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
] 
captive insurance
company that is domiciled outside of
 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
, including an industrial insured
captive insurance company formed as a risk retention group captive in this state pursuant to the
provisions of the Federal Liability Risk Retention Act of 1986
;
(f) a special purpose captive insurance company; or
(g) a special purpose financial captive insurance company.
(9) "Commissioner" means 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.
(11) "Consolidated debt to total capital ratio" means the ratio of Subsection (11)(a) to
(b).
(a) This Subsection (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 (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 (11)(a); and
(ii) shareholders' equity determined in accordance with generally accepted accounting
principles for reporting to the United States Securities and Exchange Commission.
(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.
(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)(j):
(i) a pure captive insurance company; or
(ii) an industrial insured captive insurance company.
(14) "Department" means the Insurance Department.
(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.
(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.
(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. Sec. 3901
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.
(18) "Member organization" means a person that belongs to an association.
(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.
(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
.
(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.
(22) "Protected cell" means a separate account established and maintained by a
sponsored captive insurance company for one participant.
(23) "Pure captive insurance company" means a business entity that insures risks of a
parent or affiliate of the business entity.
(24) "Special purpose financial captive insurance company" is as defined in Section
31A-37a-102
.
(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.
(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.
(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 37. Section 
31A-37-103
 is amended to read:
31A-37-103.
Chapter exclusivity.
(1) Except as provided in Subsections (2) and (3) or otherwise provided in this chapter,
a provision of this title other than this chapter does not apply to a captive insurance company.
(2) To the extent that a provision of the following does not contradict this chapter, the
provision applies to a captive insurance company that receives a certificate of authority under
this chapter:
(a) Chapter 2, Administration of the Insurance Laws;
(b) Chapter 4, Insurers in General;
(c) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(d) Chapter 14, Foreign Insurers;
(e) Chapter 16, Insurance Holding Companies;
(f) Chapter 17, Determination of Financial Condition;
(g) Chapter 18, Investments;
(h) Chapter 19a, Utah Rate Regulation Act;
(i) Chapter 27, Delinquency Administrative Action Provisions; and
(j) Chapter 27a, Insurer Receivership Act.
(3) In addition to this chapter, and subject to Section 
31A-37a-103
:
(a) Chapter 37a, Special Purpose Financial Captive Insurance Company Act, applies to
a special purpose financial captive insurance company; and
(b) for purposes of a special purpose financial captive insurance company, a reference
in this chapter to "this chapter" includes a reference to Chapter 37a, Special Purpose Financial
Captive Insurance Company Act.
(4) In addition to this chapter, an industrial group captive insurance company formed
as a risk retention group captive is subject to Chapter 15, Part 2, Risk Retention Groups Act, to
the extent that this chapter is silent regarding regulation of risk retention groups conducting
business in the state.
Section 38. 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 $250,000;
(ii) in the case of an association captive insurance company incorporated as a stock
insurer, not less than $750,000;
(iii) in the case of an industrial insured captive insurance company incorporated as a
stock insurer, not less than $700,000;
(iv) in the case of a sponsored captive insurance company, not less than $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[
.
]
; or
(iii) marketable securities as determined by Subsections 
31A-18-105
(1) and (6).
(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[
.
]
; or
(iii) marketable securities as determined by Subsections 
31A-18-105
(1) and (6).
(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 39. 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 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
,
31A-17-404.1
, 
31A-17-404.3
, or 
31A-17-404.4
 or if the captive insurance company complies
with other requirements as the commissioner may establish by rule made in accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act
.
(b) Unless the reinsurer is in compliance with Section 
31A-17-404
, 
31A-17-404.1
,
31A-17-404.3
, or 
31A-17-404.4
 or a rule adopted under Subsection (2)(a),
 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 40. 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
] 
one
 of the executive officers of the captive insurance company.
(b) Except as provided in Section 
31A-37-204
, 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 
or foreign
 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 41. 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 five-year period.
(b) The five-year period described in Subsection (1)(a) shall be determined on the basis
of five full annual accounting periods of operation.
(c) The examination is to be made as of:
(i) December 31 of the full [
three-year
] 
five-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 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.
(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 42. Section 
31A-40-208
 is amended to read:
31A-40-208.
Benefit plan.
(1) A client and a professional employer organization licensed under this chapter shall
each be considered an employer for purposes of sponsoring a retirement or welfare benefit plan
for a covered employee.
(2) 
(a)
 A fully insured welfare benefit plan offered to a covered employee of a single
professional employer organization licensed under this chapter[
: (a)
] is to be treated as a single
employer welfare benefit plan for purposes of this title and rules made under this title[
;
]
.
[
(b) may not be considered an employer welfare fund or plan, as described in Section
31A-13-101
; and
]
[
(c)
] 
(b)
 The single professional employer organization that sponsors the fully insured
welfare plan is exempt from the registration requirements under this title for:
(i) an insurance provider; or
(ii) an employer welfare fund or plan.
(3) For purposes of Chapter 30, Individual, Small Employer, and Group Health
Insurance Act:
(a) a professional employer organization licensed under this chapter is considered the
employer of a covered employee; and
(b) all covered employees of one or more clients participating in a health benefit plan
sponsored by a single professional employer organization licensed under this chapter are
considered employees of that professional employer organization.
(4) A professional employer organization licensed under this chapter may offer to a
covered employee a health benefit plan that is not fully insured by an authorized insurer, only
if:
(a) the professional employer organization has operated as a professional employer
organization for at least one year before the day on which the professional employer
organization offers the health benefit plan; and
(b) the health benefit plan:
(i) is administered by a third-party administrator licensed to do business in this state;
(ii) holds all assets of the health benefit plan, including participant contributions, in a
trust account;
(iii) has and maintains reserves that are sound for the health benefit plan as determined
by an actuary who:
(A) uses generally accepted actuarial standards of practice; and
(B) is an independent qualified actuary, including not being an employee or covered
employee of the professional employer organization;
(iv) provides written notice to a covered employee participating in the health benefit
plan that the health benefit plan is self-insured or is not fully insured;
(v) consents to an audit:
(A) on a random basis; or
(B) upon a finding of a reasonable need by the commissioner; and
(vi) provides for continuation of coverage in compliance with Section 
31A-22-722
.
(5) The cost of an audit described in Subsection (4)(b)(v) shall be paid by the
sponsoring professional employer organization.
(6) A plan of a professional employer organization described in Subsection (4) that is
not fully insured:
(a) is subject to the requirements of this section; and
(b) is not subject to another licensure or approval requirement of this title.
Section 43. Section 
31A-41-202
 is amended to read:
31A-41-202.
Assessments.
(1) [
Beginning January 1, 2009, an
] 
An
 agency title insurance producer licensed under
this title shall pay an annual assessment determined by the commission by rule made in
accordance with Section 
31A-2-404
, except that the annual assessment:
(a) may not exceed $1,000; and
(b) shall be determined on the basis of title insurance premium volume.
(2) [
Beginning January 1, 2009, an
] 
An
 individual who applies for a license or renewal
of a license as an individual title insurance producer, shall pay in addition to any other fee
required by this title, an assessment not to exceed $20, as determined by the commission by
rule made in accordance with Section 
31A-2-404
, except that if the individual holds more than
one license, the total of all assessments under this Subsection (2) may not exceed $20 in a
fiscal year.
(3) (a) To be licensed as an agency title insurance producer [
on or after July 1, 2008
], a
person shall pay to the department an assessment of $1,000 before the day on which the person
is licensed as a title insurance agency.
(b) (i) [
By no later than July 15, 2008, the
] 
The
 department shall assess on [
an
] 
a
licensed
 agency title insurance producer [
licensed as of June 30, 2008,
] an amount equal to the
greater of:
(A) $1,000; or
(B) subject to Subsection (3)(b)(ii), 2% of the balance [
as of December 31, 2007,
] in
the agency title insurance producer's reserve account described in Subsection 
31A-23a-204
(3).
(ii) The department may assess on an agency title insurance producer an amount less
than 2% of the balance described in Subsection (3)(b)(i)(B) if:
(A) before issuing the assessments under this Subsection (3)(b) the department
determines that the total of all assessments under Subsection (3)(b)(i) will exceed $250,000;
(B) the amount assessed on the agency title insurance producer is not less than $1,000;
and
(C) the department reduces the assessment in a proportionate amount for agency title
insurance producers assessed on the basis of the 2% of the balance described in Subsection
(3)(b)(i)(B).
(iii) An agency title insurance producer assessed under this Subsection (3)(b) shall pay
the assessment by no later than August 1[
, 2008
].
(4) The department may not assess a title insurance licensee an assessment for
purposes of the fund if that assessment is not expressly provided for in this section.
Section 44. Section 
31A-41-301
 is amended to read:
31A-41-301.
Procedure for making a claim against the fund.
[
(1) (a) To bring a claim against the fund a person shall notify the department within 30
business days of the day on which the person files an action against a title insurance licensee
alleging the following related to a title insurance transaction:
]
[
(i) fraud;
]
[
(ii) misrepresentation; or
]
[
(iii) deceit.
]
[
(b) The notification required by Subsection (1)(a) shall be:
]
[
(i) in writing; and
]
[
(ii) signed by the person who provides the notice.
]
[
(c) Within 30 days of the day on which the department receives a notice under
Subsection (1)(a), the department may intervene in the action described in Subsection (1)(a).
]
[
(2) (a) Subject to the other provisions in this section, a person who provides the notice
required under Subsection (1) may maintain a claim against the fund if:
]
[
(i) in an action described in Subsection (1), the person obtains a final judgment in a
court of competent jurisdiction in this state against a title insurance licensee;
]
[
(ii) all proceedings including appeals related to the final judgment described in
Subsection (2)(a)(i) are at an end; and
]
[
(iii) the person files a verified petition in the court where the judgment is entered for
an order directing payment from the fund for the uncollected actual damages included in the
judgment and unpaid.
]
[
(b) A court may not direct the payment from the fund of:
]
[
(i) punitive damages;
]
[
(ii) attorney fees;
]
[
(iii) interest; or
]
[
(iv) court costs.
]
[
(c) Regardless of the number of claimants or parcels of real estate involved in a single
real estate transaction, the liability of the fund may not exceed:
]
[
(i) $15,000 for a single real estate transaction; or
]
[
(ii) $50,000 for all transactions of a title insurance license.
]
[
(d) A person shall:
]
[
(i) serve the verified petition required by Subsection (2)(a) on the department; and
]
[
(ii) file an affidavit of service with the court.
]
[
(3) (a) A court shall conduct a hearing on a petition filed with the court within 30 days
after the day on which the department is served.
]
[
(b) The person who files the petition may recover from the fund only if the person
shows all of the following:
]
(1) To recover from the fund, a person shall:
(a) obtain a final judgment against a title insurance licensee establishing that fraud,
misrepresentation, or deceit by the licensee in a real estate transaction proximately caused
economic harm to the person; and
(b) apply to the department to receive compensation for the economic harm from the
fund.
(2) An application under Subsection (1)(b) shall establish all of the following:
[
(i)
] 
(a)
 the [
person
] 
applicant
 is not a spouse of the judgment debtor or the personal
representative of the spouse;
[
(ii) the person complied with this chapter;
]
[
(iii)
] 
(b)
 the [
person
] 
applicant
 has obtained a final judgment in accordance with [
this
section indicating the amount of the judgment awarded
] 
Subsections (1)(a) and (3)
;
[
(iv)
] 
(c)
 [
the
] 
an
 amount 
is
 still [
owing
] 
owed
 on the judgment at the date of the
[
petition
] 
application
;
[
(v)
] 
(d)
 the [
person
] 
applicant
 has had a writ of execution issued under the judgment,
and the officer executing the writ has returned showing that:
[
(A)
] 
(i)
 no property subject to execution in satisfaction of the judgment could be
found; or
[
(B)
] 
(ii)
 the amount realized upon the execution levied against the property of the
judgment debtor is insufficient to satisfy the judgment;
[
(vi)
] 
(e)
 the [
person
] 
applicant
 has made reasonable searches and inquiries to ascertain
whether the judgment debtor has any interest in property, real or personal, that may satisfy the
judgment; and
[
(vii)
] 
(f)
 the [
person
] 
applicant
 has exercised reasonable diligence to secure payment
of the judgment from the assets of the judgment debtor.
[
(4) If the person described in Subsection (3) satisfies the court that it is not practicable
for the person to comply with one or more of the requirements in Subsections (3)(b)(v) through
(vii), the court may waive those requirements.
]
[
(5) (a) A judgment that is the basis for a claim against the fund may not have been
discharged in bankruptcy.
]
[
(b) If a bankruptcy proceeding is still open or is commenced during the pendency of
the claim, the person bringing a claim against the fund shall obtain an order from the
bankruptcy court declaring the judgement and debt to be nondischargeable.
]
(3) (a) A final judgment under Subsection (1)(a) does not include a default judgment
entered against a title insurance licensee. If grounds exist for a default judgment against a title
insurance licensee, the requirement of a final judgment may be satisfied by complying with
Section 
31A-41-302
.
(b) A final judgment under Subsection (1)(a) does not include a judgment that is
discharged in bankruptcy. If a bankruptcy proceeding is open or is commenced during the
pendency of an application under Subsection (1)(b) before the department or the court, the
applicant shall obtain an order from the bankruptcy court declaring the judgment and debt to be
non-dischargeable.
(4) The department may hold a hearing on the application filed pursuant to Subsection
(2). The hearing shall be an informal adjudicative proceeding under Title 63G, Chapter 4,
Administrative Procedures Act, with rights of appeal as provided in Title 63G, Chapter 4,
Administrative Procedures Act.
Section 45. Section 
31A-41-302
 is repealed and reenacted to read:
 31A-41-302.
Department may defend action in which title insurance licensee does
not appear or defend.
(1) In a lawsuit alleging that fraud, misrepresentation, or deceit by a title insurance
licensee in a real estate transaction proximately caused economic harm, if grounds arise for the
entry of a default judgment against the title insurance licensee, the plaintiff may petition the
court to join the department as a defendant in the lawsuit.
(2) After being served, the department may appear, conduct discovery, and otherwise
defend against any claim asserted against the title insurance licensee for which the fund may be
liable under this part. A judgment under this Subsection (2) may not be issued against the
department.
Section 46. Section 
31A-41-303
 is amended to read:
31A-41-303.
Determination and amount of fund liability.
(1)
 Subject to the requirements of this part, if the [
court
] 
department
 determines that a
claim should be levied against the fund, the [
court
] 
department
 shall enter an order [
directing
the department to pay from the fund
] 
that the fund pay
 that portion of the petitioner's judgment
that is [
payable
] 
eligible for payment
 from the fund.
(2) A payment from the fund may not compensate for punitive damages, attorney fees,
interest, or court costs.
(3) Regardless of the number of claimants or parcels of real estate involved in a single
transaction, the liability of the fund may not exceed:
(a) $15,000 for a single real estate transaction; or
(b) $50,000 for all transactions of a title insurance licensee.
Section 47. 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, [
] 
.
(2) Title 31A, Chapter 42, Defined Contribution Risk Adjuster Act, is repealed [
July 1,
] 
December 31, 2018
.
Section 48. 
Health Reform Task Force -- Creation -- Membership -- Interim rules
followed -- Compensation -- Staff.
(1) There is created the Health Reform Task Force consisting of the following 11
members:
(a) four members of the Senate appointed by the president of the Senate, no more than
three of whom may be from the same political party; and
(b) seven members of the House of Representatives appointed by the speaker of the
House of Representatives, no more than five of whom may be from the same political party.
(2) (a) The president of the Senate shall designate a member of the Senate appointed
under Subsection (1)(a) as a cochair of the task force.
(b) The speaker of the House of Representatives shall designate a member of the House
of Representatives appointed under Subsection (1)(b) as a cochair of the task force.
(3) In conducting its business, the task force shall comply with the rules of legislative
interim committees.
(4) Salaries and expenses of the members of the task force shall be paid in accordance
with Section 
36-2-2
 and Legislative Joint Rules, Title 5, Chapter 3, Legislator Compensation.
(5) The Office of Legislative Research and General Counsel shall provide staff support
to the task force.
Section 49. 
Duties -- Interim report.
(1) The task force shall review and make recommendations on the following issues:
(a) substance abuse and mental health;
(b) telehealth services;
(c) health professional licensing;
(d) regulation of health maintenance organizations and preferred provider
organizations;
(e) balanced billing for covered medical services;
(f) re-codification of the health insurance related parts of Title 31A, Insurance Code;
(g) the state Medicaid program; and
(h) the efficacy of managed care for dental services under Medicaid.
(2) A final report, including any proposed legislation, shall be presented to the
Business and Labor Interim Committee before November 30, 2016.
Section 50. 
Repealer.
This bill repeals:
Section 
31A-13-101
,
Scope.
Section 
31A-13-102
,
Regulation in general.
Section 
31A-13-103
,
Registration.
Section 
31A-13-104
,
Commissioner to file information.
Section 
31A-13-105
,
Reports to employers and employees.
Section 
31A-13-106
,
Annual accounting by insurance companies, service plans,
and corporate trustees and agents.
Section 
31A-13-107
,
Commissioner's remedies.
Section 
31A-13-108
,
Investments.
Section 
31A-13-109
,
Political activities.
Section 
31A-17-404.2
,
Credit allowed a foreign ceding insurer.
Section 51. 
Appropriation.
Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, for
the fiscal year beginning July 1, 2016, and ending June 30, 2017, the following sums of money
are appropriated from resources not otherwise appropriated, or reduced from amounts
previously appropriated, out of the funds or accounts indicated. These sums of money are in
addition to amounts previously appropriated for fiscal year 2016-2017.
To Legislature - Senate
From General Fund, one-time
$13,000
Schedule of Programs:
Administration $13,000
To Legislature - House of Representatives
From General Fund, one-time
$22,000
Schedule of Programs:
Administration $22,000
Section 52. 
Repeal date.
Uncodified Sections 48 and 49 that create the Health Reform Task Force are repealed
December 30, 2016.