Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 39 Fifth Substitute (2018GS)

Sponsor

Rep. Dunnigan, J.

Final action

Governor Signed 3/20/2018

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• defines terms and modifies defined terms;
• adds provisions that a warrantor is required to disclose in a vehicle protection product warranty;
• repeals the requirement that the fixed amount of reimbursement under a vehicle protection product warranty is uniform for all warranty holders of the same vehicle protection product warranty;
• addresses the requirements for filing a binder for a health benefit plan or dental policy with the commissioner;
• modifies the date on which the commissioner presents an annual evaluation of the state's health insurance market;
• classifies certain records related to an examination as protected records;
• modifies the membership of the Title and Escrow Commission;
• modifies provisions related to the Captive Insurance Restricted Account;
• enacts and consolidates provisions related to an offer of qualified health insurance coverage that certain contractors and subcontractors are required to obtain and maintain;
• amends the threshold at which certain contractors and subcontractors become subject to certain health care-related requirements;
• modifies the process by which the commissioner determines an applicant's ability to provide proposed health care services under Title 31A, Chapter 8, Health Maintenance Organizations and Limited Health Plans;
• modifies the requirements for a nonadmitted insurer to be listed on the commissioner's "reliable" list;
• provides the circumstances under which the commissioner must hold a hearing on a merger or other acquisition of an insurer;

Every vote on this bill

Bill text

INSURANCE MODIFICATIONS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: James A. Dunnigan
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill modifies provisions related to insurance.
Highlighted Provisions:
This bill:
▸ defines terms and modifies defined terms;
▸ adds provisions that a warrantor is required to disclose in a vehicle protection
product warranty;
▸ repeals the requirement that the fixed amount of reimbursement under a vehicle
protection product warranty is uniform for all warranty holders of the same vehicle
protection product warranty;
▸ addresses the requirements for filing a binder for a health benefit plan or dental
policy with the commissioner;
▸ modifies the date on which the commissioner presents an annual evaluation of the
state's health insurance market;
▸ classifies certain records related to an examination as protected records;
▸ modifies the membership of the Title and Escrow Commission;
▸ modifies provisions related to the Captive Insurance Restricted Account;
▸ enacts and consolidates provisions related to an offer of qualified health insurance
coverage that certain contractors and subcontractors are required to obtain and
maintain;
▸ amends the threshold at which certain contractors and subcontractors become
subject to certain health care-related requirements;
▸ modifies the process by which the commissioner determines an applicant's ability to
provide proposed health care services under Title 31A, Chapter 8, Health
Maintenance Organizations and Limited Health Plans;
▸ modifies the requirements for a nonadmitted insurer to be listed on the
commissioner's "reliable" list;
▸ provides the circumstances under which the commissioner must hold a hearing on a
merger or other acquisition of an insurer;
▸ amends the deadline for holding a hearing on a merger or other acquisition of an
insurer;
▸ allows an insurer to terminate coverage of a spouse of an insured under an accident
and health insurance policy in the event of legal separation;
▸ prohibits an insured from charging any additional amount for electing to extend
group coverage;
▸ addresses the timing of open enrollment for individuals who extend or are eligible
to extend group coverage;
▸ addresses the commissioner's authority to take action against a person who has had
an insurance license or other professional or occupational license denied,
suspended, revoked, or surrendered to resolve an administrative action;
▸ addresses the circumstances under which an individual title insurance producer or
agency title insurance producer may do escrow involving real property transactions;
▸ provides that the commissioner may take action against a licensee if the
commissioner finds that the licensee is convicted of a misdemeanor involving fraud,
misrepresentation, theft, or dishonesty;
▸ modifies the training and continuing education requirements for certain licensees;
▸ amends provisions related to the effect of an insurer's insolvency;
▸ clarifies the process by which the state designates the essential health benefits for
the state;
▸ repeals certain sections of the Insurance Code;
▸ modifies the workers' compensation advisory council's reporting requirements;
▸ authorizes the Labor Commission to use funds from the Industrial Accident
Restricted Account for specific purposes; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
17B-2a-818.5
, as last amended by Laws of Utah 2016, Chapters 20 and 355
19-1-206
, as last amended by Laws of Utah 2016, Chapters 20 and 355
26-18-402
, as last amended by Laws of Utah 2013, Chapter 278
26-40-115
, as last amended by Laws of Utah 2016, Chapter 20
31A-1-301
, as last amended by Laws of Utah 2017, Chapter 292
31A-2-201.1
, as last amended by Laws of Utah 2008, Chapter 382
31A-2-201.2
, as last amended by Laws of Utah 2017, Chapter 292
31A-2-204
, as last amended by Laws of Utah 2008, Chapter 382
31A-2-403
, as last amended by Laws of Utah 2015, Chapter 330
31A-3-303
, as last amended by Laws of Utah 2011, Chapters 62 and 275
31A-3-304
, as last amended by Laws of Utah 2017, Chapter 168
31A-6a-101
, as last amended by Laws of Utah 2017, Chapter 27
31A-6a-104
, as last amended by Laws of Utah 2016, Chapter 138
31A-6a-105
, as last amended by Laws of Utah 2015, Chapter 244
31A-8-104
, as last amended by Laws of Utah 1997, Chapter 185
31A-8a-102
, as last amended by Laws of Utah 2013, Chapters 104 and 135
31A-15-103
, as last amended by Laws of Utah 2017, Chapter 363
31A-16-103
, as last amended by Laws of Utah 2015, Chapter 244
31A-22-612
, as last amended by Laws of Utah 2015, Chapter 244
31A-22-618.6
, as last amended by Laws of Utah 2017, Chapter 168 and renumbered
and amended by Laws of Utah 2017, Chapter 292
31A-22-629
, as last amended by Laws of Utah 2012, Chapter 253
31A-22-701
, as last amended by Laws of Utah 2017, Chapter 168
31A-22-722
, as last amended by Laws of Utah 2013, Chapter 319
31A-23a-107
, as last amended by Laws of Utah 2012, Chapter 253
31A-23a-109
, as last amended by Laws of Utah 2012, Chapter 253
31A-23a-111
, as last amended by Laws of Utah 2017, Chapter 168
31A-23a-208
, as enacted by Laws of Utah 2013, Chapter 341
31A-23a-406
, as last amended by Laws of Utah 2013, Chapter 319
31A-23b-102
, as last amended by Laws of Utah 2017, Chapter 168
31A-23b-202.5
, as last amended by Laws of Utah 2017, Chapter 168
31A-23b-204
, as enacted by Laws of Utah 2013, Chapter 341
31A-23b-205
, as last amended by Laws of Utah 2014, Chapters 290, 300, 425 and last
amended by Coordination Clause, Laws of Utah 2014, Chapters 300, and 425
31A-23b-206
, as last amended by Laws of Utah 2015, Chapter 244
31A-25-204
, as enacted by Laws of Utah 1985, Chapter 242
31A-25-206
, as last amended by Laws of Utah 2001, Chapter 116
31A-26-102
, as last amended by Laws of Utah 2014, Chapters 290 and 300
31A-26-205
, as last amended by Laws of Utah 1986, Chapter 204
31A-26-208
, as last amended by Laws of Utah 2011, Chapter 284
31A-27a-111
, as enacted by Laws of Utah 2007, Chapter 309
31A-27a-608
, as enacted by Laws of Utah 2007, Chapter 309
31A-30-210
, as enacted by Laws of Utah 2010, Chapter 229
31A-43-303
, as last amended by Laws of Utah 2014, Chapters 290 and 300
34A-2-107
, as last amended by Laws of Utah 2017, Chapters 18 and 363
34A-2-705
, as last amended by Laws of Utah 2011, Chapter 328
63A-5-205
, as last amended by Laws of Utah 2016, Chapters 20 and 355
63C-9-403
, as last amended by Laws of Utah 2016, Chapters 20 and 355
63G-2-305
, as last amended by Laws of Utah 2017, Chapters 374, 382, and 415
72-6-107.5
, as last amended by Laws of Utah 2016, Chapters 20 and 355
79-2-404
, as last amended by Laws of Utah 2016, Chapters 20 and 355
ENACTS:
31A-45-403
, Utah Code Annotated 1953
63A-5-205.5
, Utah Code Annotated 1953
REPEALS AND REENACTS:
31A-6a-111
, as enacted by Laws of Utah 2015, Chapter 244
REPEALS:
31A-22-722.5
, as last amended by Laws of Utah 2011, Chapters 297 and 340
31A-30-209
, as last amended by Laws of Utah 2016, Chapter 138
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
17B-2a-818.5
 is amended to read:
17B-2a-818.5.
Contracting powers of public transit districts -- Health insurance
coverage.
(1) [
For purposes of
] 
As used in
 this section:
(a) "Aggregate" means the sum of all contracts, change orders, and modifications
related to a single project.
(b) "Change order" means the same as that term is defined in Section 
63G-6a-103
.
[
(a)
] 
(c)
 "Employee" means
, as defined in Section 
34A-2-104
,
 an "employee,"
"worker," or "operative" [
as defined in Section 
34A-2-104
] who:
(i) works at least 30 hours per calendar week; and
(ii) meets employer eligibility waiting requirements for health care insurance
,
 which
may not exceed the first day of the calendar month following 60 days [
from the date of hire
]
after the day on which the individual is hired
.
[
(b)
] 
(d)
 "Health benefit plan" means the same as that term is defined in Section
31A-1-301
.
[
(c)
] 
(e)
 "Qualified health insurance coverage" means the same as that term is defined
in Section 
26-40-115
.
[
(d)
] 
(f)
 "Subcontractor" means the same as that term is defined in Section 
63A-5-208
.
[
(2) (a) Except as provided in Subsection (3), this section applies to a design or
construction contract entered into by the public transit district on or after July 1, 2009, and to a
prime contractor or to a subcontractor in accordance with Subsection (2)(b).
]
[
(b) (i) A prime contractor is subject to this section if the prime contract is in the
amount of $2,000,000 or greater at the original execution of the contract.
]
[
(ii) A subcontractor is subject to this section if a subcontract is in the amount of
$1,000,000 or greater at the original execution of the contract.
]
[
(3) This section does not apply if:
]
(2) Except as provided in Subsection (3), the requirements of this section apply to:
(a) a contractor of a design or construction contract entered into by the public transit
district on or after July 1, 2009, if the prime contract is in an aggregate amount equal to or
greater than $2,000,000; and
(b) a subcontractor of a contractor of a design or construction contract entered into by
the public transit district on or after July 1, 2009, if the subcontract is in an aggregate amount
equal to or greater than $1,000,000.
(3) The requirements of this section do not apply to a contractor or subcontractor
described in Subsection (2) if:
(a) the application of this section jeopardizes the receipt of federal funds;
(b) the contract is a sole source contract; or
(c) the contract is an emergency procurement.
[
(4) (a) This section does not apply to a change order as defined in Section
63G-6a-103
, or a modification to a contract, when the contract does not meet the initial
threshold required by Subsection (2).
]
[
(b)
] 
(4)
 A person [
who
] 
that
 intentionally uses change orders [
or
]
,
 contract
modifications
, or multiple contracts
 to circumvent the requirements of [
Subsection (2)
] 
this
section
 is guilty of an infraction.
(5) (a) A contractor subject to [
Subsection (2)
] 
the requirements of this section
 shall
demonstrate to the public transit district that the contractor has and will maintain an offer of
qualified health insurance coverage for the contractor's employees and the employee's
dependents during the duration of the contract[
.
] 
by submitting to the public transit district a
written statement that:
[
(b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
shall:
]
(i) the contractor offers qualified health insurance coverage that complies with Section
26-40-115
;
(ii) is from:
(A) an actuary selected by the contractor or the contractor's insurer; or
(B) an underwriter who is responsible for developing the employer group's premium
rates; and
(iii) was created within one year before the day on which the statement is submitted.
(b) A contractor that is subject to the requirements of this section shall:
(i) place a requirement in [
the subcontract that the subcontractor
] 
each of the
contractor's subcontracts that a subcontractor that is subject to the requirements of this section
shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
employees and the employees' [
dependants
] 
dependents
 during the duration of the subcontract;
and
[
(ii) certify to the public transit district that the subcontractor has and will maintain an
offer of qualified health insurance coverage for the subcontractor's employees and the
employees' dependents during the duration of the prime contract.
]
(ii) obtain from a subcontractor that is subject to the requirements of this section a
written statement that:
(A) the subcontractor offers qualified health insurance coverage that complies with
Section 
26-40-115
;
(B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
underwriter who is responsible for developing the employer group's premium rates; and
(C) was created within one year before the day on which the contractor obtains the
statement.
(c) (i) (A) A contractor [
who fails to meet the requirements of
] 
that fails to maintain an
offer of qualified health insurance coverage as described in
 Subsection (5)(a) during the
duration of the contract is subject to penalties in accordance with an ordinance adopted by the
public transit district under Subsection (6).
(B) A contractor is not subject to penalties for the failure of a subcontractor to [
meet
the requirements of
] 
obtain and maintain an offer of qualified health insurance coverage
described in
 Subsection (5)(b)
(i)
.
(ii) (A) A subcontractor [
who fails to meet the requirements of
] 
that fails to obtain and
maintain an offer of qualified health insurance coverage described in
 Subsection (5)(b)
(i)
during the duration of the [
contract
] 
subcontract
 is subject to penalties in accordance with an
ordinance adopted by the public transit district under Subsection (6).
(B) A subcontractor is not subject to penalties for the failure of a contractor to [
meet
the requirements of
] 
maintain an offer of qualified health insurance coverage described in
Subsection (5)(a).
(6) The public transit district shall adopt ordinances:
(a) in coordination with:
(i) the Department of Environmental Quality in accordance with Section 
19-1-206
;
(ii) the Department of Natural Resources in accordance with Section 
79-2-404
;
(iii) the State Building Board in accordance with Section [
63A-5-205
] 
63A-5-205.5
;
(iv) the State Capitol Preservation Board in accordance with Section 
63C-9-403
; and
(v) the Department of Transportation in accordance with Section 
72-6-107.5
; and
(b) that establish:
(i) the requirements and procedures a contractor 
and a subcontractor
 shall follow to
demonstrate [
to the public transit district
] compliance with this section [
that shall include
]
,
including
:
[
(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
time of the execution of each initial contract described in Subsection (2)(b);
]
[
(B) that the contractor's
]
(A) that a contractor or subcontractor's
 compliance 
with this section
 is subject to an
audit by the public transit district or the Office of the Legislative Auditor General; [
and
]
[
(C) that the actuarially equivalent determination required for the qualified health
insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
department or division with a written statement of actuarial equivalency, which is no more than
one year old, regarding the contractor's offer of qualified health coverage from an actuary
selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
developing the employer group's premium rates;
]
(B) that a contractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(a); and
(C) that a subcontractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(b)(ii);
(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
violates the provisions of this section, which may include:
(A) a three-month suspension of the contractor or subcontractor from entering into
future contracts with the public transit district upon the first violation;
(B) a six-month suspension of the contractor or subcontractor from entering into future
contracts with the public transit district upon the second violation;
(C) an action for debarment of the contractor or subcontractor in accordance with
Section 
63G-6a-904
 upon the third or subsequent violation; and
(D) monetary penalties which may not exceed 50% of the amount necessary to
purchase qualified health insurance coverage for employees and dependents of employees of
the contractor or subcontractor who were not offered qualified health insurance coverage
during the duration of the contract; and
(iii) a website on which the district shall post the commercially equivalent benchmark,
for the qualified health insurance coverage identified in Subsection (1)[
(c)
]
(e)
, that is provided
by the Department of Health, in accordance with Subsection 
26-40-115
(2).
(7) (a) (i) In addition to the penalties imposed under Subsection (6)(b)(ii), a contractor
or subcontractor who intentionally violates the provisions of this section [
shall be
] 
is
 liable to
the employee for health care costs that would have been covered by qualified health insurance
coverage.
(ii) An employer has an affirmative defense to a cause of action under Subsection
(7)(a)(i) if:
(A) the employer relied in good faith on a written statement [
of actuarial equivalency
provided by an:
] 
described in Subsection (5)(a) or (5)(b)(ii); or
[
(I) actuary; or
]
[
(II) underwriter who is responsible for developing the employer group's premium
rates; or
]
(B) a department or division determines that compliance with this section is not
required under the provisions of Subsection (3) [
or (4)
].
(b) An employee has a private right of action only against the employee's employer to
enforce the provisions of this Subsection (7).
(8) Any penalties imposed and collected under this section shall be deposited into the
Medicaid Restricted Account created in Section 
26-18-402
.
(9) The failure of a contractor or subcontractor to provide qualified health insurance
coverage as required by this section:
(a) may not be the basis for a protest or other action from a prospective bidder, offeror,
or contractor under
:
(i)
 Section 
63G-6a-1602
;
 or
(ii)
 any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
(b) may not be used by the procurement entity or a prospective bidder, offeror, or
contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
or construction.
Section 2. Section 
19-1-206
 is amended to read:
19-1-206.
Contracting powers of department -- Health insurance coverage.
(1) [
For purposes of
] 
As used in
 this section:
(a) "Aggregate" means the sum of all contracts, change orders, and modifications
related to a single project.
(b) "Change order" means the same as that term is defined in Section 
63G-6a-103
.
[
(a)
] 
(c)
 "Employee" means
, as defined in Section 
34A-2-104
,
 an "employee,"
"worker," or "operative" [
as defined in Section 
34A-2-104
] who:
(i) works at least 30 hours per calendar week; and
(ii) meets employer eligibility waiting requirements for health care insurance
,
 which
may not exceed the first day of the calendar month following 60 days [
from the date of hire
]
after the day on which the individual is hired
.
[
(b)
] 
(d)
 "Health benefit plan" means the same as that term is defined in Section
31A-1-301
.
[
(c)
] 
(e)
 "Qualified health insurance coverage" means the same as that term is defined
in Section 
26-40-115
.
[
(d)
] 
(f)
 "Subcontractor" means the same as that term is defined in Section 
63A-5-208
.
[
(2) (a) Except as provided in Subsection (3), this section applies to a design or
construction contract entered into by or delegated to the department or a division or board of
the department on or after July 1, 2009, and to a prime contractor or subcontractor in
accordance with Subsection (2)(b).
]
[
(b) (i) A prime contractor is subject to this section if the prime contract is in the
amount of $2,000,000 or greater at the original execution of the contract.
]
[
(ii) A subcontractor is subject to this section if a subcontract is in the amount of
$1,000,000 or greater at the original execution of the contract.
]
(2) Except as provided in Subsection (3), the requirements of this section apply to:
(a) a contractor of a design or construction contract entered into by, or delegated to, the
department, or a division or board of the department, on or after July 1, 2009, if the prime
contract is in an aggregate amount equal to or greater than $2,000,000; and
(b) a subcontractor of a contractor of a design or construction contract entered into by,
or delegated to, the department, or a division or board of the department, on or after July 1,
2009, if the subcontract is in an aggregate amount equal to or greater than $1,000,000.
(3) This section does not apply to contracts entered into by the department or a division
or board of the department if:
(a) the application of this section jeopardizes the receipt of federal funds;
(b) the contract or agreement is between:
(i) the department or a division or board of the department; and
(ii) (A) another agency of the state;
(B) the federal government;
(C) another state;
(D) an interstate agency;
(E) a political subdivision of this state; or
(F) a political subdivision of another state;
(c) the executive director determines that applying the requirements of this section to a
particular contract interferes with the effective response to an immediate health and safety
threat from the environment; or
(d) the contract is:
(i) a sole source contract; or
(ii) an emergency procurement.
[
(4) (a) This section does not apply to a change order as defined in Section
63G-6a-103
, or a modification to a contract, when the contract does not meet the initial
threshold required by Subsection (2).
]
[
(b)
] 
(4)
 A person [
who
] 
that
 intentionally uses change orders [
or
]
,
 contract
modifications
, or multiple contracts
 to circumvent the requirements of [
Subsection (2)
] 
this
section
 is guilty of an infraction.
(5) (a) A contractor subject to [
Subsection (2)
] 
the requirements of this section
 shall
demonstrate to the executive director that the contractor has and will maintain an offer of
qualified health insurance coverage for the contractor's employees and the employees'
dependents during the duration of the contract[
.
] 
by submitting to the executive director a
written statement that:
[
(b) If a subcontractor of the contractor is subject to Subsection (2), the contractor
shall:
]
(i) the contractor offers qualified health insurance coverage that complies with Section
26-40-115
;
(ii) is from:
(A) an actuary selected by the contractor or the contractor's insurer; or
(B) an underwriter who is responsible for developing the employer group's premium
rates; and
(iii) was created within one year before the day on which the statement is submitted.
(b) A contractor that is subject to the requirements of this section shall:
(i) place a requirement in [
the subcontract that the subcontractor
] 
each of the
contractor's subcontracts that a subcontractor that is subject to the requirements of this section
shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
employees and the employees' [
dependants
] 
dependents
 during the duration of the subcontract;
and
[
(ii) certify to the executive director that the subcontractor has and will maintain an
offer of qualified health insurance coverage for the subcontractor's employees and the
employees' dependents during the duration of the prime contract.
]
(ii) obtain from a subcontractor that is subject to the requirements of this section a
written statement that:
(A) the subcontractor offers qualified health insurance coverage that complies with
Section 
26-40-115
;
(B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
underwriter who is responsible for developing the employer group's premium rates; and
(C) was created within one year before the day on which the contractor obtains the
statement.
(c) (i) (A) A contractor [
who fails to comply with
] 
that fails to maintain an offer of
qualified health insurance coverage described in
 Subsection (5)(a) during the duration of the
contract is subject to penalties in accordance with administrative rules adopted by the
department under Subsection (6).
(B) A contractor is not subject to penalties for the failure of a subcontractor to [
meet
the requirements of
] 
obtain and maintain an offer of qualified health insurance coverage
described in
 Subsection (5)(b)
(i)
.
(ii) (A) A subcontractor [
who fails to meet the requirements of
] 
that fails to obtain and
maintain an offer of qualified health insurance coverage described in
 Subsection (5)(b) during
the duration of the [
contract
] 
subcontract
 is subject to penalties in accordance with
administrative rules adopted by the department under Subsection (6).
(B) A subcontractor is not subject to penalties for the failure of a contractor to [
meet
the requirements of
] 
maintain an offer of qualified health insurance coverage described in
Subsection (5)(a).
(6) The department shall adopt administrative rules:
(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(b) in coordination with:
(i) a public transit district in accordance with Section 
17B-2a-818.5
;
(ii) the Department of Natural Resources in accordance with Section 
79-2-404
;
(iii) the State Building Board in accordance with Section [
63A-5-205
] 
63A-5-205.5
;
(iv) the State Capitol Preservation Board in accordance with Section 
63C-9-403
;
(v) the Department of Transportation in accordance with Section 
72-6-107.5
; and
(vi) the Legislature's Administrative Rules Review Committee; and
(c) that establish:
(i) the requirements and procedures a contractor 
and a subcontractor
 shall follow to
demonstrate [
to the public transit district
] compliance with this section [
that shall include
]
,
including
:
[
(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
time of the execution of each initial contract described in Subsection (2)(b);
]
[
(B) that the contractor's
]
(A) that a contractor or subcontractor's
 compliance 
with this section
 is subject to an
audit by the department or the Office of the Legislative Auditor General; [
and
]
[
(C) that the actuarially equivalent determination required for the qualified health
insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
department or division with a written statement of actuarial equivalency, which is no more than
one year old, regarding the contractor's offer of qualified health coverage from an actuary
selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
developing the employer group's premium rates;
]
(B) that a contractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(a); and
(C) that a subcontractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(b)(ii);
(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
violates the provisions of this section, which may include:
(A) a three-month suspension of the contractor or subcontractor from entering into
future contracts with the state upon the first violation;
(B) a six-month suspension of the contractor or subcontractor from entering into future
contracts with the state upon the second violation;
(C) an action for debarment of the contractor or subcontractor in accordance with
Section 
63G-6a-904
 upon the third or subsequent violation; and
(D) notwithstanding Section 
19-1-303
, monetary penalties which may not exceed 50%
of the amount necessary to purchase qualified health insurance coverage for an employee and
the dependents of an employee of the contractor or subcontractor who was not offered qualified
health insurance coverage during the duration of the contract; and
(iii) a website on which the department shall post the commercially equivalent
benchmark, for the qualified health insurance coverage identified in Subsection (1)[
(c)
]
(e)
, that
is provided by the Department of Health, in accordance with Subsection 
26-40-115
(2).
(7) (a) (i) In addition to the penalties imposed under Subsection (6)(c)
(ii)
, a contractor
or subcontractor who intentionally violates the provisions of this section [
shall be
] 
is
 liable to
the employee for health care costs that would have been covered by qualified health insurance
coverage.
(ii) An employer has an affirmative defense to a cause of action under Subsection
(7)(a)(i) if:
(A) the employer relied in good faith on a written statement [
of actuarial equivalency
provided by:
] 
described in Subsection (5)(a) or (5)(b)(ii); or
[
(I) an actuary; or
]
[
(II) an underwriter who is responsible for developing the employer group's premium
rates; or
]
(B) the department determines that compliance with this section is not required under
the provisions of Subsection (3) [
or (4)
].
(b) An employee has a private right of action only against the employee's employer to
enforce the provisions of this Subsection (7).
(8) Any penalties imposed and collected under this section shall be deposited into the
Medicaid Restricted Account created in Section 
26-18-402
.
(9) The failure of a contractor or subcontractor to provide qualified health insurance
coverage as required by this section:
(a) may not be the basis for a protest or other action from a prospective bidder, offeror,
or contractor under
:
(i)
 Section 
63G-6a-1602
;
 or
(ii)
 any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
(b) may not be used by the procurement entity or a prospective bidder, offeror, or
contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
or construction.
Section 3. Section 
26-18-402
 is amended to read:
26-18-402.
Medicaid Restricted Account.
(1) There is created a restricted account in the General Fund known as the Medicaid
Restricted Account.
(2) (a) Except as provided in Subsection (3), the following shall be deposited into the
Medicaid Restricted Account:
(i) any general funds appropriated to the department for the state plan for medical
assistance or for the Division of Health Care Financing that are not expended by the
department in the fiscal year for which the general funds were appropriated and which are not
otherwise designated as nonlapsing shall lapse into the Medicaid Restricted Account;
(ii) any unused state funds that are associated with the Medicaid program, as defined in
Section 
26-18-2
, from the Department of Workforce Services and the Department of Human
Services; and
(iii) any penalties imposed and collected under:
(A) Section 
17B-2a-818.5
;
(B) Section 
19-1-206
;
[
(C) Section 
63A-5-205
;
]
(C) Subsection 
63A-5-205.5
;
(D) Section 
63C-9-403
;
(E) Section 
72-6-107.5
; or
(F) Section 
79-2-404
.
(b) The account shall earn interest and all interest earned shall be deposited into the
account.
(c) The Legislature may appropriate money in the restricted account to fund programs
that expand medical assistance coverage and private health insurance plans to low income
persons who have not traditionally been served by Medicaid, including the Utah Children's
Health Insurance Program created in Chapter 40, Utah Children's Health Insurance Act.
(3) For fiscal years 2008-09, 2009-10, 2010-11, 2011-12, and 2012-13 the following
funds are nonlapsing:
(a) any general funds appropriated to the department for the state plan for medical
assistance, or for the Division of Health Care Financing that are not expended by the
department in the fiscal year in which the general funds were appropriated; and
(b) funds described in Subsection (2)(a)(ii).
Section 4. Section 
26-40-115
 is amended to read:
26-40-115.
State contractor -- Employee and dependent health benefit plan
coverage.
(1) For purposes of Sections 
17B-2a-818.5
, 
19-1-206
, [
63A-5-205
] 
63A-5-205.5
,
63C-9-403
, 
72-6-107.5
, and 
79-2-404
, "qualified health insurance coverage" means, at the time
the contract is entered into or renewed:
(a) a health benefit plan and employer contribution level with a combined actuarial
value at least actuarially equivalent to the combined actuarial value of the benchmark plan
determined by the program under Subsection 
26-40-106
(1), and a contribution level at which
the employer pays at least 50% of the premium for the employee and the dependents of the
employee who reside or work in the state; or
(b) a federally qualified high deductible health plan that, at a minimum:
(i) has a deductible that is:
(A) the lowest deductible permitted for a federally qualified high deductible health
plan; or
(B) a deductible that is higher than the lowest deductible permitted for a federally
qualified high deductible health plan, but includes an employer contribution to a health savings
account in a dollar amount at least equal to the dollar amount difference between the lowest
deductible permitted for a federally qualified high deductible plan and the deductible for the
employer offered federally qualified high deductible plan;
(ii) has an out-of-pocket maximum that does not exceed three times the amount of the
annual deductible; and
(iii) provides that the employer pays 60% of the premium for the employee and the
dependents of the employee who work or reside in the state.
(2) The department shall:
(a) on or before July 1, 2016:
(i) determine the commercial equivalent of the benchmark plan described in Subsection
(1)(a); and
(ii) post the commercially equivalent benchmark plan described in Subsection (2)(a)(i)
on the department's website, noting the date posted; and
(b) update the posted commercially equivalent benchmark plan annually and at the
time of any change in the benchmark.
Section 5. 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.
(d) For purposes of a national licensing registry, "accident and health insurance" is the
same as "accident and health or sickness 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" means the same as that term is defined in Subsection [
(170)
] 
(171)
.
(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" means the same as that term is defined in Subsection
[
(91)
] 
(92)
.
(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) "Mutual" or "mutual corporation" means a mutual insurance corporation.
(c) "Stock corporation" means a stock 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" means the same as that term is defined in
Subsection [
(82)
] 
(83)
.
(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:
(A) a sole proprietor;
(B) a partner in a partnership; or
(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) (a) "Enrollee" means:
(i) a policyholder;
(ii) a certificate holder;
(iii) a subscriber; or
(iv) a covered individual:
(A) who has entered into a contract with an organization for health care; or
(B) on whose behalf an arrangement for health care has been made.
(b) "Enrollee" includes an insured.
(58) "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.
(59) "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
.
(60) (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.
(61) "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.
(62) (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.
(63) "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.
(64) "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.
(65) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
a position of public or private trust.
(66) (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 (66)(a).
(67) "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.
(68) "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.
(69) "Foreign insurer" means an insurer domiciled outside of this state, including an
alien insurer.
(70) (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.
(71) "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.
(72) "General lines of authority" include:
(a) the general lines of insurance in Subsection (73);
(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.
(73) "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.
(74) "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.
(75) (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.
(76) "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.
(77) (a) "Health benefit plan" means, except as provided in Subsection (77)(b), a
policy, contract, certificate, or agreement offered or issued by a health carrier to provide,
deliver, arrange for, pay for, or reimburse any of the costs of health care.
(b) "Health benefit plan" does not include:
(i) coverage only for accident or disability income insurance, or any combination
thereof;
(ii) coverage issued as a supplement to liability insurance;
(iii) liability insurance, including general liability insurance and automobile liability
insurance;
(iv) workers' compensation or similar insurance;
(v) automobile medical payment insurance;
(vi) credit-only insurance;
(vii) coverage for on-site medical clinics;
(viii) other similar insurance coverage, specified in federal regulations issued pursuant
to Pub. L. No. 104-191, under which benefits for health care services are secondary or
incidental to other insurance benefits;
(ix) the following benefits if they are provided under a separate policy, certificate, or
contract of insurance or are otherwise not an integral part of the plan:
(A) limited scope dental or vision benefits;
(B) benefits for long-term care, nursing home care, home health care,
community-based care, or any combination thereof; or
(C) other similar limited benefits, specified in federal regulations issued pursuant to
Pub. L. No. 104-191;
(x) the following benefits if the benefits are provided under a separate policy,
certificate, or contract of insurance, there is no coordination between the provision of benefits
and any exclusion of benefits under any health plan, and the benefits are paid with respect to an
event without regard to whether benefits are provided under any health plan:
(A) coverage only for specified disease or illness; or
(B) hospital indemnity or other fixed indemnity insurance; and
(xi) the following if offered as a separate policy, certificate, or contract of insurance:
(A) Medicare supplemental health insurance as defined under the Social Security Act,
42 U.S.C. Sec. 1395ss(g)(1);
(B) coverage supplemental to the coverage provided under United States Code, Title
10, Chapter 55, Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS); or
(C) similar supplemental coverage provided to coverage under a group health insurance
plan.
(78) "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.
(79) (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.
(80) "Health care provider" means the same as that term is defined in Section
78B-3-403
.
(81) "Health insurance exchange" means an exchange as defined in 45 C.F.R. Sec.
155.20.
[
(81)
] 
(82)
 "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.
[
(82)
] 
(83)
 "Income replacement insurance" or "disability income insurance" means
insurance written to provide payments to replace income lost from accident or sickness.
[
(83)
] 
(84)
 "Indemnity" means the payment of an amount to offset all or part of an
insured loss.
[
(84)
] 
(85)
 "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.
[
(85)
] 
(86)
 "Independently procured insurance" means insurance procured under
Section 
31A-15-104
.
[
(86)
] 
(87)
 "Individual" means a natural person.
[
(87)
] 
(88)
 "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.
[
(88)
] 
(89)
 "Insolvency" 
or "insolvent"
 means that:
(a) an insurer is unable to pay [
its debts or meet its obligations as the debts and
obligations mature
] 
the insurer's obligations as the obligations are due
;
(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
] 
insurer's admitted assets
are less than the insurer's liabilities
.
[
(89)
] 
(90)
 (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.
[
(90)
] 
(91)
 "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.
[
(91)
] 
(92)
 "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
[
(120)
] 
(121)
;
(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
[
(91)
] 
(92)
(a) through (h) in a manner designed to evade this title.
[
(92)
] 
(93)
 "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.
[
(93)
] 
(94)
 "Insurance holding company system" means a group of two or more
affiliated persons, at least one of whom is an insurer.
[
(94)
] 
(95)
 (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."
[
(95)
] 
(96)
 (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 [
(95)
] 
(96)
(a):
(i) applies only to this title;
(ii) does not define the meaning of "insured" as used in an insurance policy or
certificate; and
(iii) includes an enrollee.
[
(96)
] 
(97)
 (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;
(v) a person purporting or intending to do an insurance business as a principal on that
person's own account; and
(vi) a health maintenance organization.
(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
.
[
(97)
] 
(98)
 "Interinsurance exchange" means the same as that term is defined in
Subsection [
(152)
] 
(153)
.
[
(98)
] 
(99)
 "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.
[
(99)
] 
(100)
 (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:
(i) employed an average of at least 51 employees on business days during the preceding
calendar year; and
(ii) employs at least 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).
[
(100)
] 
(101)
 "Late enrollee," with respect to an employer health benefit plan, means
an individual whose enrollment is a late enrollment.
[
(101)
] 
(102)
 "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.
[
(102)
] 
(103)
 (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.
[
(103)
] 
(104)
 (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) medical malpractice insurance;
(B) professional liability insurance; and
(C) 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) medical malpractice insurance;
(B) professional liability insurance; and
(C) 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.
[
(104)
] 
(105)
 (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.
[
(105)
] 
(106)
 (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.
[
(106)
] 
(107)
 "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.
[
(107)
] 
(108)
 "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.
[
(108)
] 
(109)
 "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.
[
(109)
] 
(110)
 "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.
[
(110)
] 
(111)
 "Limited lines authority" includes the lines of insurance listed in
Subsection [
(109)
] 
(110)
.
[
(111)
] 
(112)
 "Limited lines producer" means a person who sells, solicits, or negotiates
limited lines insurance.
[
(112)
] 
(113)
 (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 [
(112)
] 
(113)
(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.
[
(113)
] 
(114)
 "Managed care organization" means a person:
(a) licensed as a health maintenance organization under Chapter 8, Health Maintenance
Organizations and Limited Health Plans; or
(b) (i) licensed under:
(A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(B) Chapter 7, Nonprofit Health Service Insurance Corporations; or
(C) Chapter 14, Foreign Insurers; and
(ii) that requires an enrollee to use, or offers incentives, including financial incentives,
for an enrollee to use, network providers.
[
(114)
] 
(115)
 "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.
[
(115)
] 
(116)
 "Member" means a person having membership rights in an insurance
corporation.
[
(116)
] 
(117)
 "Minimum capital" or "minimum required capital" means the capital that
must be constantly maintained by a stock insurance corporation as required by statute.
[
(117)
] 
(118)
 "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.
[
(118)
] 
(119)
 "Mortgage guaranty insurance" means surety insurance under which a
mortgagee or other creditor is indemnified against losses caused by the default of a debtor.
[
(119)
] 
(120)
 "Mortgage life insurance" means insurance on the life of a debtor in
connection with an extension of credit that pays if the debtor dies.
[
(120)
] 
(121)
 "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 [
(120)
] 
(121)
(b)(iii)(A) through
(D); or
(F) other services given in Subsections 
31A-11-102
(1)(b) through (f).
[
(121)
] 
(122)
 "Mutual" means a mutual insurance corporation.
[
(122)
] 
(123)
 "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.
[
(123)
] 
(124)
 "Network provider" means a health care provider who has an agreement
with a managed care organization to provide health care services to an enrollee with an
expectation of receiving payment, other than coinsurance, copayments, or deductibles, directly
from the managed care organization.
[
(124)
] 
(125)
 "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.
[
(125)
] 
(126)
 "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.
[
(126)
] 
(127)
 "Order" means an order of the commissioner.
[
(127)
] 
(128)
 "Outline of coverage" means a summary that explains an accident and
health insurance policy.
[
(128)
] 
(129)
 "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.
[
(129)
] 
(130)
 "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.
[
(130)
] 
(131)
 "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.
[
(131)
] 
(132)
 "Personal lines insurance" means property and casualty insurance
coverage sold for primarily noncommercial purposes to:
(a) an individual; or
(b) a family.
[
(132)
] 
(133)
 "Plan sponsor" means the same as that term is defined in 29 U.S.C. Sec.
1002(16)(B).
[
(133)
] 
(134)
 "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 [
(133)
] 
(134)
(a) or (b), the calendar year.
[
(134)
] 
(135)
 (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.
[
(135)
] 
(136)
 "Policyholder" means a person who controls a policy, binder, or oral
contract by ownership, premium payment, or otherwise.
[
(136)
] 
(137)
 "Policy illustration" means a presentation or depiction that includes
nonguaranteed elements of a policy of life insurance over a period of years.
[
(137)
] 
(138)
 "Policy summary" means a synopsis describing the elements of a life
insurance policy.
[
(138)
] 
(139)
 "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.
[
(139)
] 
(140)
 "Preexisting condition," with respect to [
a health benefit plan
] 
health care
insurance
:
(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.
[
(140)
] 
(141)
 (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.
[
(141)
] 
(142)
 "Principal officers" for a corporation means the officers designated under
Subsection 
31A-5-203
(3).
[
(142)
] 
(143)
 "Proceeding" includes an action or special statutory proceeding.
[
(143)
] 
(144)
 "Professional liability insurance" means insurance against legal liability
incident to the practice of a profession and provision of a professional service.
[
(144)
] 
(145)
 (a) Except as provided in Subsection [
(144)
] 
(145)
(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.
[
(145)
] 
(146)
 "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.
[
(146)
] 
(147)
 "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.
[
(147)
] 
(148)
 (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.
[
(148)
] 
(149)
 (a) Except as provided in Subsection [
(148)
] 
(149)
(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.
[
(149)
] 
(150)
 "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.
[
(150)
] 
(151)
 (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.
[
(151)
] 
(152)
 "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.
[
(152)
] 
(153)
 "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.
[
(153)
] 
(154)
 "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."
[
(154)
] 
(155)
 "Reinsurer" means a person licensed in this state as an insurer with the
authority to assume reinsurance.
[
(155)
] 
(156)
 "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.
[
(156)
] 
(157)
 (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.
[
(157)
] 
(158)
 "Rider" means an endorsement to:
(a) an insurance policy; or
(b) an insurance certificate.
[
(158)
] 
(159)
 "Secondary medical condition" means a complication related to an
exclusion from coverage in accident and health insurance.
[
(159)
] 
(160)
 (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 [
(159)
] 
(160)
(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.
[
(160)
] 
(161)
 "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 [
(160)
] 
(161)
.
[
(161)
] 
(162)
 (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 [
(161)
] 
(162)
, "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.
[
(162)
] 
(163)
 "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.
[
(163)
] 
(164)
 "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.
[
(164)
] 
(165)
 "Significant break in coverage" means a period of 63 consecutive days
during each of which an individual does not have creditable coverage.
[
(165)
] 
(166)
 (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:
(i) 
(A)
 employed at least one [
employee
] but not more than 50 
eligible
 employees on
business days during the preceding calendar year; [
and
] 
or
(B) if the employer did not exist for the entirety of the preceding calendar year,
reasonably expects to employ an average of at least one but not more than 50 eligible
employees on business days during the current calendar year;
(ii) employs at least one employee on the first day of the plan year[
.
]
; and
[
(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).
]
(iii) for an employer who has common ownership with one or more other employers, is
treated as a single employer under 26 U.S.C. Sec. 414(b), (c), (m), or (o).
[
(c)
] 
(b)
 "Small employer" does not include a sole proprietor that does not employ at
least one employee.
[
(166)
] 
(167)
 "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.
[
(167)
] 
(168)
 (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.
[
(168)
] 
(169)
 Subject to Subsection [
(89)
] 
(90)
(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.
[
(169)
] 
(170)
 (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).
[
(170)
] 
(171)
 "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.
[
(171)
] 
(172)
 "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.
[
(172)
] 
(173)
 "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
.
[
(173)
] 
(174)
 (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.
[
(174)
] 
(175)
 (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.
[
(175)
] 
(176)
 "Underwrite" means the authority to accept or reject risk on behalf of the
insurer.
[
(176)
] 
(177)
 "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 [
(144)
] 
(145)
.
[
(177)
] 
(178)
 "Voting security" means a security with voting rights, and includes a
security convertible into a security with a voting right associated with the security.
[
(178)
] 
(179)
 "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.
[
(179)
] 
(180)
 "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 6. Section 
31A-2-201.1
 is amended to read:
31A-2-201.1.
General filing requirements.
Except as otherwise provided in this title, the commissioner may set by rule made in
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, specific
requirements for filing any of the following required by this title:
(1) a form;
(2) a rate; [
or
]
(3) a report[
.
]
; or
(4) a binder for a health benefit plan or dental policy.
Section 7. Section 
31A-2-201.2
 is amended to read:
31A-2-201.2.
Evaluation of health insurance market.
(1) Each year the commissioner shall:
(a) conduct an evaluation of the state's health insurance market;
(b) report the findings of the evaluation to the Health and Human Services Interim
Committee before [
October
] 
December
of each year; and
(c) publish the findings of the evaluation on the department website.
(2) The evaluation required by this section shall:
(a) analyze the effectiveness of the insurance regulations and statutes in promoting a
healthy, competitive health insurance market that meets the needs of the state, and includes an
analysis of:
(i) the availability and marketing of individual and group products;
(ii) rate changes;
(iii) coverage and demographic changes;
(iv) benefit trends;
(v) market share changes; and
(vi) accessibility;
(b) assess complaint ratios and trends within the health insurance market, which
assessment shall include complaint data from the Office of Consumer Health Assistance within
the department;
(c) contain recommendations for action to improve the overall effectiveness of the
health insurance market, administrative rules, and statutes; and
(d) include claims loss ratio data for each health insurance company doing business in
the state.
(3) When preparing the evaluation and report required by this section, the
commissioner may seek the input of insurers, employers, insured persons, providers, and others
with an interest in the health insurance market.
(4) The commissioner may adopt administrative rules for the purpose of collecting the
data required by this section, taking into account the business confidentiality of the insurers.
(5) Records submitted to the commissioner under this section shall be maintained by
the commissioner as protected records under Title 63G, Chapter 2, Government Records
Access and Management Act.
Section 8. Section 
31A-2-204
 is amended to read:
31A-2-204.
Conducting examinations.
(1) As used in this section, "work papers" means a record that is created or relied upon:
(a) during the course of an examination conducted under Section 
31A-2-203
; or
(b) in drafting an examination report.
[
(1)
] 
(2)
 (a) For each examination under Section 
31A-2-203
, the commissioner shall
issue an order:
(i) stating the scope of the examination; and
(ii) designating the examiner in charge.
(b) The commissioner need not give advance notice of an examination to an examinee.
(c) The examiner in charge shall give the examinee a copy of the order issued under
this Subsection [
(1)
] 
(2)
.
(d) (i) The commissioner may alter the scope or nature of an examination at any time
without advance notice to the examinee.
(ii) If the commissioner amends an order described in this Subsection [
(1)
] 
(2)
, the
commissioner shall provide a copy of any amended order to the examinee.
(e) Statements in the commissioner's examination order concerning examination scope
are for the examiner's guidance only.
(f) Examining relevant matters not mentioned in an order issued under this Subsection
[
(1)
] 
(2)
 is not a violation of this title.
[
(2)
] 
(3)
 The commissioner shall, whenever practicable, cooperate with the insurance
regulators of other states by conducting joint examinations of:
(a) multistate insurers doing business in this state; or
(b) other multistate licensees doing business in this state.
[
(3)
] 
(4)
 An examiner authorized by the commissioner shall, when necessary to the
purposes of the examination, have access at all reasonable hours to the premises and to any
books, records, files, securities, documents, or property of:
(a) the examinee; and
(b) any of the following if the premises, books, records, files, securities, documents, or
property relate to the affairs of the examinee:
(i) an officer of the examinee;
(ii) any other person who:
(A) has executive authority over the examinee; or
(B) is in charge of any segment of the examinee's affairs; or
(iii) any affiliate of the examinee under Subsection 
31A-2-203
(1)(b).
[
(4)
] 
(5)
 (a) The officers, employees, and agents of the examinee and of persons under
Subsection 
31A-2-203
(1)(b) shall comply with every reasonable request of the examiners for
assistance in any matter relating to the examination.
(b) A person may not obstruct or interfere with the examination except by legal
process.
[
(5)
] 
(6)
 If the commissioner finds the accounts or records to be inadequate for proper
examination of the condition and affairs of the examinee or improperly kept or posted, the
commissioner may employ experts to rewrite, post, or balance the accounts or records at the
expense of the examinee.
[
(6)
] 
(7)
 (a) The examiner in charge of an examination shall make a report of the
examination no later than 60 days after the completion of the examination that shall include:
(i) the information and analysis ordered under Subsection [
(1)
] 
(2)
; and
(ii) the examiner's recommendations.
(b) At the option of the examiner in charge, preparation of the report may include
conferences with the examinee or representatives of the examinee.
(c) The report is confidential until the report becomes a public document under
Subsection [
(7)
] 
(8)
, except the commissioner may use information from the report as a basis
for action under Chapter 27a, Insurer Receivership Act.
[
(7)
] 
(8)
 (a) The commissioner shall serve a copy of the examination report described
in Subsection [
(6)
] 
(7)
 upon the examinee.
(b) Within 20 days after service, the examinee shall:
(i) accept the examination report as written; or
(ii) request agency action to modify the examination report.
(c) The report is considered accepted under this Subsection [
(7)
] 
(8)
 if the examinee
does not file a request for agency action to modify the report within 20 days after service of the
report.
(d) If the examination report is accepted:
(i) the examination report immediately becomes a public document; and
(ii) the commissioner shall distribute the examination report to all jurisdictions in
which the examinee is authorized to do business.
(e) (i) Any adjudicative proceeding held as a result of the examinee's request for
agency action shall, upon the examinee's demand, be closed to the public, except that the
commissioner need not exclude any participating examiner from this closed hearing.
(ii) Within 20 days after the hearing held under this Subsection [
(7)
] 
(8)
(e), the
commissioner shall:
(A) adopt the examination report with any necessary modifications; and
(B) serve a copy of the adopted report upon the examinee.
(iii) Unless the examinee seeks judicial relief, the adopted examination report:
(A) shall become a public document 10 days after service; and
(B) may be distributed as described in this section.
(f) Notwithstanding Title 63G, Chapter 4, Administrative Procedures Act, to the extent
that this section is in conflict with Title 63G, Chapter 4, Administrative Procedures Act, this
section governs:
(i) a request for agency action under this section; or
(ii) adjudicative proceeding under this section.
[
(8)
] 
(9)
 The examinee shall promptly furnish copies of the adopted examination report
described in Subsection [
(7)
] 
(8)
 to each member of the examinee's board.
[
(9)
] 
(10)
 After an examination report becomes a public document under Subsection
[
(7)
] 
(8)
, the commissioner may furnish, without cost or at a reasonable price set under Section
31A-3-103
, a copy of the examination report to interested persons, including:
(a) a member of the board of the examinee; or
(b) one or more newspapers in this state.
[
(10)
] 
(11)
 (a) In a proceeding by or against the examinee, or any officer or agent of the
examinee, the examination report as adopted by the commissioner is admissible as evidence of
the facts stated in the report.
(b) In any proceeding commenced under Chapter 27a, Insurer Receivership Act, the
examination report, whether adopted by the commissioner or not, is admissible as evidence of
the facts stated in the examination report.
(12) Work papers are protected records under Title 63G, Chapter 2, Government
Records Access and Management Act.
Section 9. Section 
31A-2-403
 is amended to read:
31A-2-403.
Title and Escrow Commission created.
(1) (a) Subject to Subsection (1)(b), there is created within the department the Title and
Escrow Commission that is comprised of five members appointed by the governor with the
consent of the Senate as follows:
(i) 
except as provided in Subsection (1)(c),
 two members shall be employees of a title
insurer;
(ii) two members shall:
(A) be employees of a Utah agency title insurance producer;
(B) be or have been licensed under the title insurance line of authority;
(C) as of the day on which the member is appointed, be or have been licensed with the
title examination or escrow subline of authority for at least five years; and
(D) as of the day on which the member is appointed, not be from the same county as
another member appointed under this Subsection (1)(a)(ii); and
(iii) one member shall be a member of the general public from any county in the state.
(b) No more than one commission member may be appointed from a single company
or an affiliate or subsidiary of the company.
(c) If the governor is unable to identify more than one individual who is an employee
of a title insurer and willing to serve as a member of the commission, the commission shall
include the following members in lieu of the members described in Subsection (1)(a)(i):
(i) one member who is an employee of a title insurer; and
(ii) one member who is an employee of a Utah agency title insurance producer.
(2) (a) Subject to Subsection (2)(c), a commission member shall file with the
commissioner a disclosure of any position of employment or ownership interest that the
commission member has with respect to a person that is subject to the jurisdiction of the
commissioner.
(b) The disclosure statement required by this Subsection (2) shall be:
(i) filed by no later than the day on which the person begins that person's appointment;
and
(ii) amended when a significant change occurs in any matter required to be disclosed
under this Subsection (2).
(c) A commission member is not required to disclose an ownership interest that the
commission member has if the ownership interest is in a publicly traded company or held as
part of a mutual fund, trust, or similar investment.
(3) (a) Except as required by Subsection (3)(b), as terms of current commission
members expire, the governor shall appoint each new commission member to a four-year term
ending on June 30.
(b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
time of appointment, adjust the length of terms to ensure that the terms of the commission
members are staggered so that approximately half of the members appointed under Subsection
(1)(a)(i) and half of the members appointed under Subsection (1)(a)(ii) are appointed every two
years.
(c) A commission member may not serve more than one consecutive term.
(d) When a vacancy occurs in the membership for any reason, the governor, with the
consent of the Senate, shall appoint a replacement for the unexpired term.
(e) Notwithstanding the other provisions of this Subsection (3), a commission member
serves until a successor is appointed by the governor with the consent of the Senate.
(4) A commission member may not receive compensation or benefits for the
commission member's service, but may receive per diem and travel expenses in accordance
with:
(a) Section 
63A-3-106
;
(b) Section 
63A-3-107
; and
(c) rules made by the Division of Finance pursuant to Sections 
63A-3-106
 and
63A-3-107
.
(5) Members of the commission shall annually select one commission member to serve
as chair.
(6) (a) The commission shall meet at least monthly. Notwithstanding Section
52-4-207
, a commission member shall physically attend a regularly scheduled monthly meeting
of the commission and may not attend through electronic means. A commission member may
attend subcommittee meetings, emergency meetings, or other not regularly scheduled meetings
electronically in accordance with Section 
52-4-207
.
(b) The commissioner may call additional meetings:
(i) at the commissioner's discretion;
(ii) upon the request of the chair of the commission; or
(iii) upon the written request of three or more commission members.
(c) (i) Three commission members constitute a quorum for the transaction of business.
(ii) The action of a majority of the commission members when a quorum is present is
the action of the commission.
(7) The commissioner shall staff the commission.
Section 10. Section 
31A-3-303
 is amended to read:
31A-3-303.
Payment of tax.
(1) (a) An insurer, the producers involved in the transaction, and the policyholder are
jointly and severally liable for the payment of the taxes required under Section 
31A-3-301
.
(b) The policyholder's liability for payment of the premium tax under Section
31A-3-301
 ends when the policyholder pays the tax to a producer or an insurer.
(c) The insurer and the producers involved in the transaction are jointly and severally
liable for the payment of the additional tax required under Section 
31A-3-302
.
(d) Except for the tax under Section 
31A-3-302
, the policyholder shall pay a tax under
this part and shall be billed specifically for the tax when billed for the premium.
(e) Except for the tax imposed under Section 
31A-3-302
, absorption of the tax by the
producer or insurer is an unfair method of competition under Sections 
31A-23a-402
 and
31A-23a-402.5
.
(2) (a) The commissioner shall by rule prescribe accounting and reporting forms and
procedures for insurers, producers, and policyholders to use in determining the amount of taxes
owed under this part, and the manner and time of payment.
(b) If a tax is not paid within the time prescribed under the commissioner's rule, a
penalty shall be imposed of 25% of the tax due, plus 1-1/2% per month from the time of
default until full payment of the tax.
(3) Upon making a record of its actions, and upon reasonable cause shown, the
commissioner may waive, reduce, or compromise any of the penalties or interest imposed
under this part.
[
(4) Subject to Section 
31A-3-305
, if a policy covers risks that are only partially
located in this state, for computation of tax under this part the premium shall be reasonably
allocated among the states on the basis of risk locations. However, the premiums with respect
to surplus lines insurance received in this state by a surplus lines producer or charged on
policies written or negotiated in or from this state are taxable in full under this part, subject to a
credit for any tax actually paid in another state to the extent of a reasonable allocation on the
basis of risk locations.
]
(4) When Utah is the home state, premiums for surplus lines insurance are taxable in
full.
(5) Subject to Section 
31A-3-305
, the premium taxes collected under this part by a
producer or by an insurer are the property of this state.
(6) If the property of a producer is seized under any process in a court in this state, or if
a producer's business is suspended by the action of creditors or put into the hands of an
assignee, receiver, or trustee, the taxes and penalties due this state under this part are preferred
claims and the state is to that extent a preferred creditor.
Section 11. Section 
31A-3-304
 is amended to read:
31A-3-304.
Annual fees -- Other taxes or fees prohibited -- Captive Insurance
Restricted Account.
(1) (a) A captive insurance company shall pay an annual fee imposed under this section
to obtain or renew a certificate of authority.
(b) The commissioner shall:
(i) determine the annual fee pursuant to Section 
31A-3-103
; and
(ii) consider whether the annual fee is competitive with fees imposed by other states on
captive insurance companies.
(2) A captive insurance company that fails to pay the fee required by this section is
subject to the relevant sanctions of this title.
(3) (a) A captive insurance company that pays one of the following fees is exempt from
Title 59, Chapter 7, Corporate Franchise and Income Taxes, and Title 59, Chapter 9, Taxation
of Admitted Insurers:
(i) a fee under this section;
(ii) a fee under Chapter 37, Captive Insurance Companies Act; or
(iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
Act.
(b) The state or a county, city, or town within the state may not levy or collect an
occupation tax or other fee or charge not described in Subsections (3)(a)(i) through (iii) against
a captive insurance company.
(c) The state may not levy, assess, or collect a withdrawal fee under Section 
31A-4-115
against a captive insurance company.
(4) A captive insurance company shall pay the fee imposed by this section to the
commissioner by June 1 of each year.
(5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
deposited into the Captive Insurance Restricted Account.
(b) There is created in the General Fund a restricted account known as the "Captive
Insurance Restricted Account."
(c) The Captive Insurance Restricted Account shall consist of the fees described in
Subsection (3)(a).
(d) The commissioner shall administer the Captive Insurance Restricted Account. 
Subject to appropriations by the Legislature, the commissioner shall use the money deposited
into the Captive Insurance Restricted Account to:
(i) administer and enforce:
(A) Chapter 37, Captive Insurance Companies Act; and
(B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
(ii) promote the captive insurance industry in Utah.
(e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
except that at the end of each fiscal year, money received by the commissioner in excess of the
following shall be treated as free revenue in the General Fund:
[
(i) for fiscal year 2015-2016, in excess of $1,250,000;
]
[
(ii) for fiscal year 2016-2017, in excess of $1,250,000; and
]
[
(iii)
] 
(i)
 for fiscal year 2017-2018 and subsequent fiscal years, in excess of
$1,850,000[
.
]
; and
(ii) for fiscal year 2018-2019 and subsequent fiscal years, in excess of $1,600,000.
Section 12. Section 
31A-6a-101
 is amended to read:
31A-6a-101.
Definitions.
As used in this chapter:
(1) (a) "Incidental cost" means a cost, incurred by a warranty holder in relation to a
vehicle protection product warranty, that is in addition to the cost of purchasing the warranty.
(b) "Incidental cost" includes an insurance policy deductible, a rental vehicle charge,
the difference between the actual value of the stolen vehicle at the time of theft and the cost of
a replacement vehicle, sales tax, a registration fee, a transaction fee, a mechanical inspection
fee, or damage a theft causes to a vehicle.
[
(1)
] 
(2)
 "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)
] 
(3)
 "Nonmanufacturers' parts" means replacement parts not made for or by the
original manufacturer of the goods commonly referred to as "after market parts."
[
(3)
] 
(4)
 (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)
] 
(5)
 (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, normal wear and tear, power surge or interruption, or
accidental damage from handling, with or without additional provision for incidental payment
of indemnity under limited circumstances, including towing, providing a rental car, providing
emergency road service, and covering food spoilage.
(b) "Service contract" does not include:
(i) mechanical breakdown insurance; or
(ii) a prepaid contract of limited duration that provides for scheduled maintenance
only, regardless of whether the contract is executed before, on, or after May 9, 2017.
(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)
] 
(6)
 "Service contract holder" or "contract holder" means a person who purchases a
service contract.
[
(6)
] 
(7)
 "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)
] 
(8)
 "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)
] 
(9)
 (a) "Vehicle protection product" means a device or system that is:
(i) installed on or applied to a motor vehicle; and
(ii) designed to
:
(A)
 prevent the theft of the vehicle[
.
]
; or
(B) if the vehicle is stolen, aid in the recovery 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)
] 
(10)
 "Vehicle protection product warranty" means a written agreement by a
warrantor that provides 
that
 if the vehicle protection product fails to prevent the theft of the
motor vehicle, [
that
] 
or aid in the recovery of the motor vehicle within a time period specified
in the warranty, not exceeding 30 days after the day on which the motor vehicle is reported
stolen,
 the warrantor will reimburse the warranty holder [
under the warranty in a fixed amount
]
for incidental costs
 specified in the warranty, not [
to exceed $5,000
] 
exceeding $5,000, or in a
specified fixed amount not exceeding $5,000
.
[
(10)
] 
(11)
 "Warrantor" means a person who is contractually obligated to the warranty
holder under the terms of a vehicle protection product warranty.
[
(11)
] 
(12)
 "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 13. 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."
; and
(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."
; and
(iii) as applicable:
(A) "The warrantor under this vehicle protection product warranty will reimburse the
warranty holder as specified in the warranty upon the theft of the vehicle."; or
(B) "The warrantor under this vehicle protection product warranty will reimburse the
warranty holder as specified in the warranty and at the end of the time period specified in the
warranty if, following the theft of the vehicle, the stolen vehicle is not recovered within a time
period specified in the warranty, not to exceed 30 days after the day on which the vehicle is
reported stolen."
(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 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) As used in this Subsection (8), "conspicuous statement" means a disclosure that:
(i) appears in all-caps, bold, and 14-point font; and
(ii) provides a space to be initialed by the consumer:
(A) immediately below the printed disclosure; and
(B) at or before the time the consumer purchases the vehicle protection product.
[
(8)
] 
(b)
 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."
(9) If a vehicle protection product warranty states that the warrantor will reimburse the
warranty holder for incidental costs, the vehicle protection product warranty shall state how
incidental costs paid under the warranty are calculated.
(10) If a vehicle protection product warranty states that the warrantor will reimburse
the warranty holder in a fixed amount, the vehicle protection product warranty shall state the
fixed amount.
Section 14. Section 
31A-6a-105
 is amended to read:
31A-6a-105.
Prohibited acts.
(1) Except as provided in Subsection 
31A-6a-104
(2), a service contract provider 
or
warrantor
 may not use in [
its
] 
the service contract provider or warrantor's
 name, a contract, or
literature:
(a) any of the following words:
(i) "insurance";
(ii) "casualty";
(iii) "surety";
(iv) "mutual"; or
(v) another word descriptive of the insurance, casualty, or surety business; or
(b) a name deceptively similar to the name or description of:
(i) an insurance or surety corporation; or
(ii) another service contract provider.
(2) A service contract provider [
or the
]
, a
 service contract provider's representative
, a
warrantor, or a warrantor's representative
 may not:
(a) make, permit, or cause to be made a false or misleading statement in connection
with the sale, offer to sell, or advertisement of a service contract 
or vehicle protection product
;
or
(b) deliberately omit a material statement that would be considered misleading if
omitted, in connection with the sale, offer to sell, or advertisement of a service contract 
or
vehicle protection product
.
(3) A bank, savings and loan association, insurance company, or other lending
institution may not require the purchase of a service contract as a condition of a loan.
(4) Except for a bank, savings and loan association, industrial bank, or credit union, a
service contract provider may not sell, or be the obligated party for:
(a) a guaranteed asset protection waiver, unless registered with the commissioner under
Chapter 6b, Guaranteed Asset Protection Waiver Act;
(b) a debt cancellation agreement, unless licensed by the commissioner; or
(c) a debt suspension agreement, unless licensed by the commissioner.
(5) A warrantor or [
its
] 
the warrantor's
 representative may not
:
(a)
 require the purchase of a vehicle protection product as a condition of the financing,
lease, or purchase of a motor vehicle[
.
]
; or
(b) sell a vehicle protection product to a consumer before providing the consumer, for
review, a copy of the vehicle protection product warranty that is filed with the Department of
Insurance.
Section 15. Section 
31A-6a-111
 is repealed and reenacted to read:
 31A-6a-111.
Vehicle protection product warranty requirements.
(1) A warrantor shall make a reimbursement promised under a vehicle protection
product warranty as specified in the warranty, regardless of, and not contingent upon, the
payment of a benefit provided for under the warranty holder's primary vehicle insurance or any
other contract.
(2) (a) If a vehicle protection product is represented as preventing the theft of a vehicle,
the vehicle protection product warranty shall, at a minimum, provide for reimbursement of
damage a theft causes to the motor vehicle up to $5,000, if the vehicle is recovered within the
time period specified in the warranty following the theft of the vehicle, not to exceed 30 days
after the day on which the vehicle is reported stolen.
(b) If a vehicle protection product is represented as aiding in the recovery of a stolen
vehicle, the vehicle protection product warranty shall provide for reimbursement of the vehicle
up to $5,000, if the vehicle is not recovered within the time period specified in the warranty
following the theft of the vehicle, not to exceed 30 days after the day on which the vehicle is
reported stolen.
Section 16. Section 
31A-8-104
 is amended to read:
31A-8-104.
Determination of ability to provide services.
(1) The commissioner may not issue a certificate of authority to an applicant for a
certificate of authority under this chapter unless the 
applicant demonstrates to the
commissioner [
has determined
] that the applicant has:
(a) [
demonstrated
] the willingness and potential ability to furnish the proposed health
care services in a manner to assure both availability and accessibility of adequate personnel and
facilities and continuity of service; 
and
(b) arrangements for an ongoing quality of health care assurance program concerning
health care processes and outcomes[
, established in accordance with rules adopted by the
director of the Department of Health based upon prevailing standards for quality assurance for
other forms of health care delivery in this state; and
]
.
[
(c) a procedure, established in accordance with rules of the director of the Department
of Health, to develop, compile, evaluate, and report statistics relating to the cost of its
operations, the pattern of utilization of its services, the availability and accessibility of its
services, and such other matters as may be reasonably required by the director of the
Department of Health.
]
[
(2) Upon receipt of an application for a certificate of authority under this chapter, the
commissioner shall transmit a copy of the application and accompanying documents to the
director of the Department of Health. Upon receipt of the application, the director of the
Department of Health shall review the application, investigate the surrounding facts and
circumstances, and make a finding concerning whether the applicant satisfies the requirements
of Subsection (1). The director of the Department of Health is considered to have found the
applicant to comply with Subsection (1) unless he delivers to the commissioner a finding of
noncompliance within 90 days after receiving the application from the commissioner.
]
[
(3) In determining whether the requirements of Subsection (1) are satisfied, the
commissioner shall rely on the findings of the director of the Department of Health delivered to
the commissioner in accordance with Subsection (2).
]
[
(4) A finding of noncompliance with Subsection (1) shall specify in what respects the
applicant is deficient in meeting the requirements of Subsection (1).
]
(2) (a) In accordance with Sections 
31A-2-203
 and 
31A-2-204
, the commissioner may
order an independent audit or examination by one or more technical experts to determine an
applicant's ability to provide the proposed health care services as described in Subsection (1).
(b) In accordance with Section 
31A-2-205
, an applicant shall reimburse the
commissioner for the reasonable cost of an independent audit or examination.
[
(5) An organization's certificate of authority issued under this chapter is conclusive
evidence of compliance with Subsection (1), as to the services authorized to be performed
under the certificate of authority, except in a proceeding by the state against the organization.
]
(3)
 Licensing under this chapter does not exempt an organization from any licensing
requirement applicable under Title 26, Chapter 21, Health Care Facility Licensing and
Inspection Act.
Section 17. Section 
31A-8a-102
 is amended to read:
31A-8a-102.
Definitions.
[
For purposes of
] 
As used in
 this chapter:
(1) "Fee" means any periodic charge for use of a discount program.
(2) "Health care provider" means a health care provider as defined in Section
78B-3-403
, with the exception of "licensed athletic trainer," who:
(a) is practicing within the scope of the provider's license; and
(b) has agreed either directly or indirectly, by contract or any other arrangement with a
health discount program operator, to provide a discount to enrollees of a health discount
program.
(3) (a) "Health discount program" means a business arrangement or contract in which a
person pays fees, dues, charges, or other consideration in exchange for a program that provides
access to health care providers who agree to provide a discount for health care services.
(b) "Health discount program" does not include a program that does not charge a
membership fee or require other consideration from the member to use the program's discounts
for health services.
(4) "Health discount program marketer" means a person, including a private label
entity, that markets, promotes, sells, or distributes a health discount program but does not
operate a health discount program.
(5) "Health discount program operator" means a person that provides a health discount
program by entering into a contract or agreement, directly or indirectly, with a person or
persons in this state who agree to provide discounts for health care services to enrollees of the
health discount program and determines the charge to members.
(6) "Marketing" means making or causing to be made any communication that contains
information that relates to a product or contract regulated under this chapter.
[
(6)
] 
(7)
 "Value-added benefit" means a discount offering with no additional charge
made by a health insurer or health maintenance organization that is licensed under this title, in
connection with existing contracts with the health insurer or health maintenance organization.
Section 18. Section 
31A-15-103
 is amended to read:
31A-15-103.
Surplus lines insurance -- Unauthorized insurers.
(1) Notwithstanding Section 
31A-15-102
, [
a foreign insurer that has not obtained a
certificate of authority to do business in this state under Section 
31A-14-202
 may negotiate for
and
] 
when this state is the home state as defined in Section 
31A-3-305
, a nonadmitted insurer
may
 make an insurance contract [
with
] 
for coverage of
 a person in this state and on a risk
located in this state, subject to the limitations and requirements of this section.
(2) (a) For a contract made under this section, the insurer may, in this state:
(i) inspect the risks to be insured;
(ii) collect premiums;
(iii) adjust losses; and
(iv) do another act reasonably incidental to the contract.
(b) An act described in Subsection (2)(a) may be done through:
(i) an employee; or
(ii) an independent contractor.
(3) (a) Subsections (1) and (2) do not permit a person to solicit business in this state on
behalf of an insurer that has no certificate of authority.
(b) Insurance placed with a nonadmitted insurer shall be placed [
with
] 
by
 a surplus
lines producer licensed under Chapter 23a, Insurance Marketing - Licensing Producers,
Consultants, and Reinsurance Intermediaries.
(c) The commissioner may by rule prescribe how a surplus lines producer may:
(i) pay or permit the payment, commission, or other remuneration on insurance placed
by the surplus lines producer under authority of the surplus lines producer's license to one
holding a license to act as an insurance producer; and
(ii) advertise the availability of the surplus lines producer's services in procuring, on
behalf of a person seeking insurance, a contract with a nonadmitted insurer.
(4) For a contract made under this section, a nonadmitted insurer is subject to Sections
31A-23a-402
, 
31A-23a-402.5
, and 
31A-23a-403
 and the rules adopted under those sections.
(5) A nonadmitted insurer may not issue workers' compensation insurance coverage to
an employer located in this state, except for stop loss coverage issued to an employer securing
workers' compensation under Subsection 
34A-2-201
(2).
(6) (a) The commissioner may by rule prohibit making a contract under Subsection (1)
for a specified class of insurance if authorized insurers provide an established market for the
class in this state that is adequate and reasonably competitive.
(b) The commissioner may by rule place a restriction or a limitation on and create
special procedures for making a contract under Subsection (1) for a specified class of insurance
if:
(i) there have been abuses of placements in the class; or
(ii) the policyholders in the class, because of limited financial resources, business
experience, or knowledge, cannot protect their own interests adequately.
(c) The commissioner may prohibit an individual insurer from making a contract under
Subsection (1) and all insurance producers from dealing with the insurer if:
(i) the insurer willfully violates:
(A) this section;
(B) Section 
31A-4-102
, 
31A-23a-402
, 
31A-23a-402.5
, or 
31A-26-303
; or
(C) a rule adopted under a section listed in Subsection (6)(c)(i)(A) or (B);
(ii) the insurer fails to pay the fees and taxes specified under Section 
31A-3-301
; or
(iii) the commissioner has reason to believe that the insurer is:
(A) in an unsound condition;
(B) operated in a fraudulent, dishonest, or incompetent manner; or
(C) in violation of the law of its domicile.
(d) (i) The commissioner may issue one or more lists of [
unauthorized
] 
nonadmitted
foreign insurers whose:
(A) solidity the commissioner doubts; or
(B) practices the commissioner considers objectionable.
(ii) The commissioner shall issue one or more lists of [
unauthorized
] 
nonadmitted
foreign insurers the commissioner considers to be reliable and solid.
(iii) In addition to the lists described in Subsections (6)(d)(i) and (ii), the commissioner
may issue other relevant evaluations of [
unauthorized
] 
nonadmitted
 insurers.
(iv) An action may not lie against the commissioner or an employee of the department
for a written or oral communication made in, or in connection with the issuance of, a list or
evaluation described in this Subsection (6)(d).
(e) A foreign [
unauthorized
] 
nonadmitted
 insurer shall be listed on the commissioner's
"reliable" list only if the [
unauthorized
] 
nonadmitted
 insurer:
(i) delivers a request to the commissioner to be on the list;
(ii) establishes satisfactory evidence of good reputation and financial integrity;
(iii) (A) delivers to the commissioner a copy of the [
unauthorized
] 
nonadmitted
insurer's current annual statement certified by the insurer[
; and
] 
and, each subsequent year,
delivers to the commissioner a copy of the nonadmitted insurer's annual statement within 60
days after the day on which the nonadmitted insurer files the annual statement with the
insurance regulatory authority where the nonadmitted insurer is domiciled; or
[
(B) continues each subsequent year to file its annual statements with the
commissioner within 60 days of the day on which it is filed with the insurance regulatory
authority where the insurer is domiciled;
]
(B) files the nonadmitted insurer's annual statements with the National Association of
Insurance Commissioners and the nonadmitted insurer's annual statements are available
electronically from the National Association of Insurance Commissioners;
(iv) (A) [
(I)
] is in substantial compliance with the solvency standards in Chapter 17,
Part 6, Risk-Based Capital, or maintains capital and surplus of at least $15,000,000, whichever
is greater; [
and
] 
or
[
(II) maintains in the United States an irrevocable trust fund in either a national bank or
a member of the Federal Reserve System, or maintains a deposit meeting the statutory deposit
requirements for insurers in the state where it is made, which trust fund or deposit:
]
[
(Aa) shall be in an amount not less than $2,500,000 for the protection of all of the
insurer's policyholders in the United States;
]
[
(Bb) may consist of cash, securities, or investments of substantially the same character
and quality as those which are "qualified assets" under Section 
31A-17-201
; and
]
[
(Cc) may include as part of the trust arrangement a letter of credit that qualifies as
acceptable security under Section 
31A-17-404.1
; or
]
(B) in the case of any "Lloyd's" or other similar incorporated or unincorporated group
of alien individual insurers, maintains a trust fund that:
(I) shall be in an amount not less than $50,000,000 as security to its full amount for all
policyholders and creditors in the United States of each member of the group;
(II) may consist of cash, securities, or investments of substantially the same character
and quality as those which are "qualified assets" under Section 
31A-17-201
; and
(III) may include as part of this trust arrangement a letter of credit that qualifies as
acceptable security under Section 
31A-17-404.1
; and
(v) for an alien insurer not domiciled in the United States or a territory of the United
States, is listed on the Quarterly Listing of Alien Insurers maintained by the National
Association of Insurance Commissioners International Insurers Department.
(7) (a) Subject to Subsection (7)(b), a surplus lines producer may not, either knowingly
or without reasonable investigation of the financial condition and general reputation of the
insurer, place insurance under this section with:
(i) a financially unsound insurer;
(ii) an insurer engaging in unfair practices; or
(iii) an otherwise substandard insurer.
(b) A surplus line producer may place insurance under this section with an insurer
described in Subsection (7)(a) if the surplus line producer:
(i) gives the applicant notice in writing of the known deficiencies of the insurer or the
limitations on the surplus line producer's investigation; and
(ii) explains the need to place the business with that insurer.
(c) A copy of the notice described in Subsection (7)(b) shall be kept in the office of the
surplus line producer for at least five years.
(d) To be financially sound, an insurer shall satisfy standards that are comparable to
those applied under the laws of this state to an authorized insurer.
(e) An insurer on the "doubtful or objectionable" list under Subsection (6)(d) or an
insurer not on the commissioner's "reliable" list under Subsection (6)(e) is presumed
substandard.
(8) (a) A policy issued under this section shall:
(i) include a description of the subject of the insurance; and
(ii) indicate:
(A) the coverage, conditions, and term of the insurance;
(B) the premium charged the policyholder;
(C) the premium taxes to be collected from the policyholder; and
(D) the name and address of the policyholder and insurer.
(b) If the direct risk is assumed by more than one insurer, the policy shall state:
(i) the names and addresses of all insurers; and
(ii) the portion of the entire direct risk each assumes.
(c) A policy issued under this section shall have attached or affixed to the policy the
following statement: "The insurer issuing this policy does not hold a certificate of authority to
do business in this state and thus is not fully subject to regulation by the Utah insurance
commissioner. This policy receives no protection from any of the guaranty associations created
under Title 31A, Chapter 28, Guaranty Associations."
(9) Upon placing a new or renewal coverage under this section, a surplus lines
producer shall promptly deliver to the policyholder or the policyholder's agent evidence of the
insurance consisting either of:
(a) the policy as issued by the insurer; or
(b) if the policy is not available upon placing the coverage, a certificate, cover note, or
other confirmation of insurance complying with Subsection (8).
(10) If the commissioner finds it necessary to protect the interests of insureds and the
public in this state, the commissioner may by rule subject a policy issued under this section to
as much of the regulation provided by this title as is required for a comparable policy written
by an authorized foreign insurer.
(11) (a) A surplus lines transaction in this state shall be examined to determine whether
it complies with:
(i) the surplus lines tax levied under Chapter 3, Department Funding, Fees, and Taxes;
(ii) the solicitation limitations of Subsection (3);
(iii) the requirement of Subsection (3) that placement be through a surplus lines
producer;
(iv) placement limitations imposed under Subsections (6)(a), (b), and (c); and
(v) the policy form requirements of Subsections (8) and (10).
(b) The examination described in Subsection (11)(a) shall take place as soon as
practicable after the transaction. The surplus lines producer shall submit to the examiner
information necessary to conduct the examination within a period specified by rule.
(c) (i) The examination described in Subsection (11)(a) may be conducted by the
commissioner or by an advisory organization created under Section 
31A-15-111
 and authorized
by the commissioner to conduct these examinations. The commissioner is not required to
authorize an additional advisory organization to conduct an examination under this Subsection
(11)(c).
(ii) The commissioner's authorization of one or more advisory organizations to act as
examiners under this Subsection (11)(c) shall be:
(A) by rule; and
(B) evidenced by a contract, on a form provided by the commissioner, between the
authorized advisory organization and the department.
(d) (i) (A) A person conducting the examination described in Subsection (11)(a) shall
collect a stamping fee of an amount not to exceed 1% of the policy premium payable in
connection with the transaction.
(B) A stamping fee collected by the commissioner shall be deposited in the General
Fund.
(C) The commissioner shall establish a stamping fee by rule.
(ii) A stamping fee collected by an advisory organization is the property of the advisory
organization to be used in paying the expenses of the advisory organization.
(iii) Liability for paying a stamping fee is as required under Subsection 
31A-3-303
(1)
for taxes imposed under Section 
31A-3-301
.
(iv) The commissioner shall adopt a rule dealing with the payment of stamping fees. If
a stamping fee is not paid when due, the commissioner or advisory organization may impose a
penalty of 25% of the stamping fee due, plus 1-1/2% per month from the time of default until
full payment of the stamping fee.
[
(v) A stamping fee relative to a policy covering a risk located partially in this state
shall be allocated in the same manner as under Subsection 
31A-3-303
(4).
]
(e) The commissioner, representatives of the department, advisory organizations,
representatives and members of advisory organizations, authorized insurers, and surplus lines
insurers are not liable for damages on account of statements, comments, or recommendations
made in good faith in connection with their duties under this Subsection (11)(e) or under
Section 
31A-15-111
.
(f) An examination conducted under this Subsection (11) and a document or materials
related to the examination are confidential.
(12) (a) For a surplus lines insurance transaction in the state entered into on or after
May 13, 2014, if an audit is required by the surplus lines insurance policy, a surplus lines
insurer:
(i) shall exercise due diligence to initiate an audit of an insured, to determine whether
additional premium is owed by the insured, by no later than six months after the expiration of
the term for which premium is paid; and
(ii) may not audit an insured more than three years after the surplus lines insurance
policy expires.
(b) A surplus lines insurer that does not comply with this Subsection (12) may not
charge or collect additional premium in excess of the premium agreed to under the surplus
lines insurance policy.
Section 19. Section 
31A-16-103
 is amended to read:
31A-16-103.
Acquisition of control of, divestiture of control of, or merger with
domestic insurer.
(1) (a) A person may not take the actions described in Subsection (1)(b) or (c) unless,
at the time any offer, request, or invitation is made or any such agreement is entered into, or
prior to the acquisition of securities if no offer or agreement is involved:
(i) the person files with the commissioner a statement containing the information
required by this section;
(ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
insurer; and
(iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
(b) Unless the person complies with Subsection (1)(a), a person other than the issuer
may not make a tender offer for, a request or invitation for tenders of, or enter into any
agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
any voting security of a domestic insurer if after the acquisition, the person would directly,
indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
(c) Unless the person complies with Subsection (1)(a), a person may not enter into an
agreement to merge with or otherwise to acquire control of:
(i) a domestic insurer; or
(ii) any person controlling a domestic insurer.
(d) For purposes of this section, a controlling person of a domestic insurer seeking to
divest its controlling interest in the domestic insurer, in any manner, shall file with the
commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least
30 days before the cessation of control. The commissioner shall determine those instances in
which the one or more persons seeking to divest or to acquire a controlling interest in an
insurer, will be required to file for and obtain approval of the transaction. The information
shall remain confidential until the conclusion of the transaction unless the commissioner, in the
commissioner's discretion, determines that confidential treatment will interfere with
enforcement of this section. If the statement referred to in Subsection (1)(a) is otherwise filed,
this Subsection (1)(d) does not apply.
(e) With respect to a transaction subject to this section, the acquiring person shall also
file a pre-acquisition notification with the commissioner, which shall contain the information
set forth in Section 
31A-16-104.5
. A failure to file the notification may be subject to penalties
specified in Section 
31A-16-104.5
.
(f) (i) For purposes of this section, a domestic insurer includes any person controlling a
domestic insurer unless the person as determined by the commissioner is either directly or
through its affiliates primarily engaged in business other than the business of insurance.
(ii) The controlling person described in Subsection (1)(f)(i) shall file with the
commissioner a preacquisition notification containing the information required in Subsection
(2) 30 calendar days before the proposed effective date of the acquisition.
(iii) For the purposes of this section, "person" does not include any securities broker
that in the usual and customary brokers function holds less than 20% of:
(A) the voting securities of an insurance company; or
(B) any person that controls an insurance company.
(iv) This section applies to all domestic insurers and other entities licensed under:
(A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(B) Chapter 7, Nonprofit Health Service Insurance Corporations;
(C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
(D) Chapter 9, Insurance Fraternals; and
(E) Chapter 11, Motor Clubs.
(g) (i) An agreement for acquisition of control or merger as contemplated by this
Subsection (1) is not valid or enforceable unless the agreement:
(A) is in writing; and
(B) includes a provision that the agreement is subject to the approval of the
commissioner upon the filing of any applicable statement required under this chapter.
(ii) A written agreement for acquisition or control that includes the provision described
in Subsection (1)(g)(i) satisfies the requirements of this Subsection (1).
(2) The statement to be filed with the commissioner under Subsection (1) shall be
made under oath or affirmation and shall contain the following information:
(a) the name and address of the "acquiring party," which means each person by whom
or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
be effected; and
(i) if the person is an individual:
(A) the person's principal occupation;
(B) a listing of all offices and positions held by the person during the past five years;
and
(C) any conviction of crimes other than minor traffic violations during the past 10
years; and
(ii) if the person is not an individual:
(A) a report of the nature of its business operations during:
(I) the past five years; or
(II) for any lesser period as the person and any of its predecessors has been in
existence;
(B) an informative description of the business intended to be done by the person and
the person's subsidiaries;
(C) a list of all individuals who are or who have been selected to become directors or
executive officers of the person, or individuals who perform, or who will perform functions
appropriate to such positions; and
(D) for each individual described in Subsection (2)(a)(ii)(C), the information required
by Subsection (2)(a)(i) for each individual;
(b) (i) the source, nature, and amount of the consideration used or to be used in
effecting the merger or acquisition of control;
(ii) a description of any transaction in which funds were or are to be obtained for the
purpose of effecting the merger or acquisition of control, including any pledge of:
(A) the insurer's stock; or
(B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
(iii) the identity of persons furnishing the consideration;
(c) (i) fully audited financial information, or other financial information considered
acceptable by the commissioner, of the earnings and financial condition of each acquiring party
for:
(A) the preceding five fiscal years of each acquiring party; or
(B) any lesser period the acquiring party and any of its predecessors shall have been in
existence; and
(ii) unaudited information:
(A) similar to the information described in Subsection (2)(c)(i); and
(B) prepared within the 90 days prior to the filing of the statement;
(d) any plans or proposals which each acquiring party may have to:
(i) liquidate the insurer;
(ii) sell its assets;
(iii) merge or consolidate the insurer with any person; or
(iv) make any other material change in the insurer's:
(A) business;
(B) corporate structure; or
(C) management;
(e) (i) the number of shares of any security referred to in Subsection (1) that each
acquiring party proposes to acquire;
(ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
Subsection (1); and
(iii) a statement as to the method by which the fairness of the proposal was arrived at;
(f) the amount of each class of any security referred to in Subsection (1) that:
(i) is beneficially owned; or
(ii) concerning which there is a right to acquire beneficial ownership by each acquiring
party;
(g) a full description of any contract, arrangement, or understanding with respect to any
security referred to in Subsection (1) in which any acquiring party is involved, including:
(i) the transfer of any of the securities;
(ii) joint ventures;
(iii) loan or option arrangements;
(iv) puts or calls;
(v) guarantees of loans;
(vi) guarantees against loss or guarantees of profits;
(vii) division of losses or profits; or
(viii) the giving or withholding of proxies;
(h) a description of the purchase by any acquiring party of any security referred to in
Subsection (1) during the 12 calendar months preceding the filing of the statement including:
(i) the dates of purchase;
(ii) the names of the purchasers; and
(iii) the consideration paid or agreed to be paid for the purchase;
(i) a description of:
(i) any recommendations to purchase by any acquiring party any security referred to in
Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
(ii) any recommendations made by anyone based upon interviews or at the suggestion
of the acquiring party;
(j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
and
(ii) if distributed, copies of additional soliciting material relating to the transactions
described in Subsection (2)(j)(i);
(k) (i) the term of any agreement, contract, or understanding made with, or proposed to
be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
tender; and
(ii) the amount of any fees, commissions, or other compensation to be paid to
broker-dealers with regard to any agreement, contract, or understanding described in
Subsection (2)(k)(i);
(l) an agreement by the person required to file the statement referred to in Subsection
(1) that it will provide the annual report, specified in Section 
31A-16-105
, for so long as
control exists;
(m) an acknowledgment by the person required to file the statement referred to in
Subsection (1) that the person and all subsidiaries within its control in the insurance holding
company system will provide information to the commissioner upon request as necessary to
evaluate enterprise risk to the insurer; and
(n) any additional information the commissioner requires by rule, which the
commissioner determines to be:
(i) necessary or appropriate for the protection of policyholders of the insurer; or
(ii) in the public interest.
(3) The department may request:
(a) (i) criminal background information maintained pursuant to Title 53, Chapter 10,
Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
(ii) complete Federal Bureau of Investigation criminal background checks through the
national criminal history system.
(b) Information obtained by the department from the review of criminal history records
received under Subsection (3)(a) shall be used by the department for the purpose of:
(i) verifying the information in Subsection (2)(a)(i);
(ii) determining the integrity of persons who would control the operation of an insurer;
and
(iii) preventing persons who violate 18 U.S.C. Sec. 1033 from engaging in the business
of insurance in the state.
(c) If the department requests the criminal background information, the department
shall:
(i) pay to the Department of Public Safety the costs incurred by the Department of
Public Safety in providing the department criminal background information under Subsection
(3)(a)(i);
(ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
of Investigation in providing the department criminal background information under
Subsection (3)(a)(ii); and
(iii) charge the person required to file the statement referred to in Subsection (1) a fee
equal to the aggregate of Subsections (3)(c)(i) and (ii).
(4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
the lender's ordinary course of business, the identity of the lender shall remain confidential, if
the person filing the statement so requests.
(b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
adjusted book value assigned by the acquiring party to each security in arriving at the terms of
the offer.
(ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
proportional interest in the capital and surplus of the insurer with adjustments that reflect:
(A) market conditions;
(B) business in force; and
(C) other intangible assets or liabilities of the insurer.
(c) The description required by Subsection (2)(g) shall identify the persons with whom
the contracts, arrangements, or understandings have been entered into.
(5) (a) If the person required to file the statement referred to in Subsection (1) is a
partnership, limited partnership, syndicate, or other group, the commissioner may require that
all the information called for by Subsection (2), (3), or (4) shall be given with respect to each:
(i) partner of the partnership or limited partnership;
(ii) member of the syndicate or group; and
(iii) person who controls the partner or member.
(b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
or if the person required to file the statement referred to in Subsection (1) is a corporation, the
commissioner may require that the information called for by Subsection (2) shall be given with
respect to:
(i) the corporation;
(ii) each officer and director of the corporation; and
(iii) each person who is directly or indirectly the beneficial owner of more than 10% of
the outstanding voting securities of the corporation.
(6) If any material change occurs in the facts set forth in the statement filed with the
commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
the change, together with copies of all documents and other material relevant to the change,
shall be filed with the commissioner and sent to the insurer within two business days after the
filing person learns of such change.
(7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
(1) is proposed to be made by means of a registration statement under the Securities Act of
1933, or under circumstances requiring the disclosure of similar information under the
Securities Exchange Act of 1934, or under a state law requiring similar registration or
disclosure, a person required to file the statement referred to in Subsection (1) may use copies
of any registration or disclosure documents in furnishing the information called for by the
statement.
(8) (a) The commissioner shall approve any merger or other acquisition of control
referred to in Subsection (1)
,
 unless[
, after a public hearing on the merger or acquisition,
] the
commissioner finds that:
(i) after the change of control, the domestic insurer referred to in Subsection (1) would
not be able to satisfy the requirements for the issuance of a license to write the line or lines of
insurance for which it is presently licensed;
(ii) the effect of the merger or other acquisition of control would:
(A) substantially lessen competition in insurance in this state; or
(B) tend to create a monopoly in insurance;
(iii) the financial condition of any acquiring party might:
(A) jeopardize the financial stability of the insurer; or
(B) prejudice the interest of:
(I) its policyholders; or
(II) any remaining securityholders who are unaffiliated with the acquiring party;
(iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
(v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
assets, or consolidate or merge it with any person, or to make any other material change in its
business or corporate structure or management, are:
(A) unfair and unreasonable to policyholders of the insurer; and
(B) not in the public interest; or
(vi) the competence, experience, and integrity of those persons who would control the
operation of the insurer are such that it would not be in the interest of the policyholders of the
insurer and the public to permit the merger or other acquisition of control.
(b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
be considered unfair if the adjusted book values under Subsection (2)(e):
(i) are disclosed to the securityholders; and
(ii) determined by the commissioner to be reasonable.
(9) For a merger or other acquisition of control described in Subsection (1), the
commissioner:
(a) may hold a public hearing on the merger or other acquisition at the commissioner's
discretion; and
(b) shall hold a public hearing on the merger or other acquisition upon request by the
acquiring party, the insurer, or any other interested party.
[
(9)
] 
(10)
 (a) The 
commissioner shall hold a
 public hearing [
referred to in Subsection
(8) shall be held within 30
] 
under Subsection (9) no later than 45
 days after 
the day on which
the statement required by Subsection (1) is filed.
(b) (i) [
At
] 
The commissioner shall give at
 least 20 days notice of the hearing [
shall be
given by the commissioner
] to the person filing the statement.
(ii) Affected parties may waive the notice required by this Subsection (9)(b).
(iii) Not less than seven days notice of the public hearing shall be given by the person
filing the statement to:
(A) the insurer; and
(B) any person designated by the commissioner.
(c) The commissioner shall make a determination within 30 days after the conclusion
of the hearing.
(d) At the hearing, the person filing the statement, the insurer, any person to whom
notice of hearing was sent, and any other person whose interest may be affected by the hearing
may:
(i) present evidence;
(ii) examine and cross-examine witnesses; and
(iii) offer oral and written arguments.
(e) (i) A person or insurer described in Subsection [
(9)
] 
(10)
(d) may conduct discovery
proceedings in the same manner as is presently allowed in the district courts of this state.
(ii) All discovery proceedings shall be concluded not later than three days before the
commencement of the public hearing.
[
(10)
] 
(11)
 If the proposed acquisition of control will require the approval of more than
one commissioner, the public hearing [
referred to
] 
described
 in Subsection (9)[
(a)
] may be held
on a consolidated basis upon request of the person filing the statement referred to in Subsection
(1). The person shall file the statement referred to in Subsection (1) with the National
Association of Insurance Commissioners within five days of making the request for a public
hearing. A commissioner may opt out of a consolidated hearing and shall provide notice to the
applicant of the opt-out within 10 days of the receipt of the statement referred to in Subsection
(1). A hearing conducted on a consolidated basis shall be public and shall be held within the
United States before the commissioners of the states in which the insurers are domiciled. The
commissioners shall hear and receive evidence. A commissioner may attend a hearing under
this Subsection [
(10)
] 
(11)
 in person or by telecommunication.
[
(11)
] 
(12)
 In connection with a change of control of a domestic insurer, any
determination by the commissioner that the person acquiring control of the insurer shall be
required to maintain or restore the capital of the insurer to the level required by the laws and
regulations of this state shall be made not later than 60 days after the date of notification of the
change in control submitted pursuant to Subsection (1).
[
(12)
] 
(13)
 (a) The commissioner may retain technical experts to assist in reviewing all,
or a portion of, information filed in connection with a proposed merger or other acquisition of
control referred to in Subsection (1).
(b) In determining whether any of the conditions in Subsection (8) exist, the
commissioner may consider the findings of technical experts employed to review applicable
filings.
(c) (i) A technical expert employed under Subsection [
(12)
] 
(13)
(a) shall present to the
commissioner a statement of all expenses incurred by the technical expert in conjunction with
the technical expert's review of a proposed merger or other acquisition of control.
(ii) At the commissioner's direction the acquiring person shall compensate the technical
expert at customary rates for time and expenses:
(A) necessarily incurred; and
(B) approved by the commissioner.
(iii) The acquiring person shall:
(A) certify the consolidated account of all charges and expenses incurred for the review
by technical experts;
(B) retain a copy of the consolidated account described in Subsection [
(12)
]
(13)
(c)(iii)(A); and
(C) file with the department as a public record a copy of the consolidated account
described in Subsection [
(12)
] 
(13)
(c)(iii)(A).
[
(13)
] 
(14)
 (a) (i) If a domestic insurer proposes to merge into another insurer, any
securityholder electing to exercise a right of dissent may file with the insurer a written request
for payment of the adjusted book value given in the statement required by Subsection (1) and
approved under Subsection (8), in return for the surrender of the security holder's securities.
(ii) The request described in Subsection [
(13)
] 
(14)
(a)(i) shall be filed not later than 10
days after the day of the securityholders' meeting where the corporate action is approved.
(b) The dissenting securityholder is entitled to and the insurer is required to pay to the
dissenting securityholder the specified value within 60 days of receipt of the dissenting security
holder's security.
(c) Persons electing under this Subsection [
(13)
] 
(14)
 to receive cash for their securities
waive the dissenting shareholder and appraisal rights otherwise applicable under Title 16,
Chapter 10a, Part 13, Dissenters' Rights.
(d) (i) This Subsection [
(13)
] 
(14)
 provides an elective procedure for dissenting
securityholders to resolve their objections to the plan of merger.
(ii) This section does not restrict the rights of dissenting securityholders under Title 16,
Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
Subsection [
(13)
] 
(14)
.
[
(14)
] 
(15)
 (a) All statements, amendments, or other material filed under Subsection
(1), and all notices of public hearings held under Subsection (8), shall be mailed by the insurer
to its securityholders within five business days after the insurer has received the statements,
amendments, other material, or notices.
(b) (i) Mailing expenses shall be paid by the person making the filing.
(ii) As security for the payment of mailing expenses, that person shall file with the
commissioner an acceptable bond or other deposit in an amount determined by the
commissioner.
[
(15)
] 
(16)
 This section does not apply to any offer, request, invitation, agreement, or
acquisition that the commissioner by order exempts from the requirements of this section as:
(a) not having been made or entered into for the purpose of, and not having the effect
of, changing or influencing the control of a domestic insurer; or
(b) otherwise not comprehended within the purposes of this section.
[
(16)
] 
(17)
 The following are violations of this section:
(a) the failure to file any statement, amendment, or other material required to be filed
pursuant to Subsections (1), (2), and (5); or
(b) the effectuation, or any attempt to effectuate, an acquisition of control of,
divestiture of, or merger with a domestic insurer unless the commissioner has given the
commissioner's approval to the acquisition or merger.
[
(17)
] 
(18)
 (a) The courts of this state are vested with jurisdiction over:
(i) a person who:
(A) files a statement with the commissioner under this section; and
(B) is not resident, domiciled, or authorized to do business in this state; and
(ii) overall actions involving persons described in Subsection [
(17)
] 
(18)
(a)(i) arising
out of a violation of this section.
(b) A person described in Subsection [
(17)
] 
(18)
(a) is considered to have performed
acts equivalent to and constituting an appointment of the commissioner by that person, to be
that person's lawful agent upon whom may be served all lawful process in any action, suit, or
proceeding arising out of a violation of this section.
(c) A copy of a lawful process described in Subsection [
(17)
] 
(18)
(b) shall be:
(i) served on the commissioner; and
(ii) transmitted by registered or certified mail by the commissioner to the person at that
person's last-known address.
Section 20. Section 
31A-22-612
 is amended to read:
31A-22-612.
Conversion privileges for insured former spouse.
(1) An accident and health insurance policy, which in addition to covering the insured
also provides coverage to the spouse of the insured, may not contain a provision for
termination of coverage of a spouse covered under the policy, except by entry of a valid decree
of divorce
, legal separation,
 or annulment between the parties.
(2) Every policy which contains this type of provision shall provide that upon the entry
of the divorce decree the spouse is entitled to have issued an individual policy of accident and
health insurance without evidence of insurability, upon application to the company and
payment of the appropriate premium. The policy shall provide the coverage being issued
which is most nearly similar to the terminated coverage. Probationary or waiting periods in the
policy are considered satisfied to the extent the coverage was in force under the prior policy.
(3) When the insurer receives actual notice that the coverage of a spouse is to be
terminated because of a divorce
, legal separation,
 or annulment, the insurer shall promptly
provide the spouse written notification of the right to obtain individual coverage as provided in
Subsection (2), the premium amounts required, and the manner, place, and time in which
premiums may be paid. The premium is determined in accordance with the insurer's table of
premium rates applicable to the age and class of risk of the persons to be covered and to the
type and amount of coverage provided. If the spouse applies and tenders the first monthly
premium to the insurer within 30 days after receiving the notice provided by this Subsection
(3), the spouse shall receive individual coverage that commences immediately upon
termination of coverage under the insured's policy.
(4) This section does not apply to accident and health insurance policies offered on a
group blanket basis or a health benefit plan.
Section 21. Section 
31A-22-618.6
 is amended to read:
31A-22-618.6.
Discontinuance, nonrenewal, or changes to group health benefit
plans.
(1) Except as otherwise provided in this section, a group health benefit plan for a plan
sponsor is renewable and continues in force:
(a) with respect to all eligible employees and dependents; and
(b) at the option of the plan sponsor.
(2) A health benefit plan for a plan sponsor may be discontinued or nonrenewed:
(a) for noncompliance with the insurer's employer contribution requirements; 
(b) if there is no longer any enrollee under the group health plan who lives, resides, or
works in:
(i) the service area of the insurer; or
(ii) the area for which the insurer is authorized to do business;
(c) for coverage made available in the small or large employer market only through an
association, if:
(i) the employer's membership in the association ceases; and
(ii) the coverage is terminated uniformly without regard to any health status-related
factor relating to any covered individual; or
(d) for noncompliance with the insurer's minimum employee participation
requirements, except as provided in Subsection (3).
(3) If a small employer [
employs fewer than two eligible employees
] 
no longer
employs at least one eligible employee
, a carrier may not discontinue or not renew the health
benefit plan until the first renewal date following the beginning of a new plan year, even if the
carrier knows at the beginning of the plan year that the employer no longer has at least [
two
current employees
] 
one eligible employee
.
(4) (a) A small employer that, after purchasing a health benefit plan in the small group
market, employs on average more than 50 eligible employees on each business day in a
calendar year may continue to renew the health benefit plan purchased in the small group
market.
(b) A large employer that, after purchasing a health benefit plan in the large group
market, employs on average fewer than 51 eligible employees on each business day in a
calendar year may continue to renew the health benefit plan purchased in the large group
market. 
(5) A health benefit plan for a plan sponsor may be discontinued if:
(a) a condition described in Subsection (2) exists;
(b) the plan sponsor fails to pay premiums or contributions in accordance with the
terms of the contract;
(c) the plan sponsor:
(i) performs an act or practice that constitutes fraud; or
(ii) makes an intentional misrepresentation of material fact under the terms of the
coverage;
(d) the insurer:
(i) elects to discontinue offering a particular health benefit plan product delivered or
issued for delivery in this state; and
(ii) (A) provides notice of the discontinuation in writing to each plan sponsor,
employee, or dependent of a plan sponsor or an employee, at least 90 days before the date the
coverage will be discontinued;
(B) provides notice of the discontinuation in writing to the commissioner, and at least
three working days before the date the notice is sent to the affected plan sponsors, employees,
and dependents of the plan sponsors or employees;
(C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all
other health benefit plans currently being offered by the insurer in the market or, in the case of
a large employer, any other health benefit plans currently being offered in that market; and
(D) in exercising the option to discontinue that health benefit plan and in offering the
option of coverage in this section, acts uniformly without regard to the claims experience of a
plan sponsor, any health status-related factor relating to any covered participant or beneficiary,
or any health status-related factor relating to any new participant or beneficiary who may
become eligible for the coverage; or
(e) the insurer:
(i) elects to discontinue all of the insurer's health benefit plans in:
(A) the small employer market;
(B) the large employer market; or
(C) both the small employer and large employer markets; and
(ii) (A) provides notice of the discontinuation in writing to each plan sponsor,
employee, or dependent of a plan sponsor or an employee at least 180 days before the date the
coverage will be discontinued;
(B) provides notice of the discontinuation in writing to the commissioner in each state
in which an affected insured individual is known to reside and, at least 30 working days before
the date the notice is sent to the affected plan sponsors, employees, and the dependents of the
plan sponsors or employees;
(C) discontinues and nonrenews all plans issued or delivered for issuance in the market
described in Subsection (5)(e)(i) ; and
(D) provides a plan of orderly withdrawal as required by Section 
31A-4-115
.
(6) (a) Except as provided in Subsection (6)(d), an eligible employee may be
discontinued if after issuance of coverage the eligible employee:
(i) engages in an act or practice in connection with the coverage that constitutes fraud;
or
(ii) makes an intentional misrepresentation of material fact in connection with the
coverage.
(b) An eligible employee that is discontinued under Subsection (6)(a) may reenroll:
(i) 12 months after the date of discontinuance; and
(ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
to reenroll.
(c) At the time the eligible employee's coverage is discontinued under Subsection
(6)(a), the insurer shall notify the eligible employee of the right to reenroll when coverage is
discontinued.
(d) An eligible employee may not be discontinued under this Subsection (6) because of
a fraud or misrepresentation that relates to health status.
(7) For purposes of this section, a reference to "plan sponsor" includes a reference to
the employer:
(a) with respect to coverage provided to an employer member of the association; and
(b) if the health benefit plan is made available by an insurer in the employer market
only through:
(i) an association;
(ii) a trust; or
(iii) a discretionary group.
(8) An insurer may modify a health benefit plan for a plan sponsor only:
(a) at the time of coverage renewal; and
(b) if the modification is effective uniformly among all plans with that product.
Section 22. Section 
31A-22-629
 is amended to read:
31A-22-629.
Adverse benefit determination review process.
(1) As used in this section:
(a) (i) "Adverse benefit determination" means the:
(A) denial of a benefit;
(B) reduction of a benefit;
(C) termination of a benefit; or
(D) failure to provide or make payment, in whole or in part, for a benefit.
(ii) "Adverse benefit determination" includes:
(A) denial, reduction, termination, or failure to provide or make payment that is based
on a determination of an insured's or a beneficiary's eligibility to participate in a plan;
(B) denial, reduction, or termination of, or a failure to provide or make payment, in
whole or in part, for, a benefit resulting from the application of a utilization review; or
(C) failure to cover an item or service for which benefits are otherwise provided
because it is determined to be:
(I) experimental;
(II) investigational; or
(III) not medically necessary or appropriate.
(b) "Independent review" means a process that:
(i) is a voluntary option for the resolution of an adverse benefit determination;
(ii) is conducted at the discretion of the claimant;
(iii) is conducted by an independent review organization designated by the [
insurer
]
commissioner
;
(iv) renders an independent and impartial decision on an adverse benefit determination
submitted by an insured; and
(v) may not require the insured to pay a fee for requesting the independent review.
(c) "Independent review organization" means a person, subject to Subsection (6), who
conducts an independent external review of adverse determinations.
(d) "Insured" is as defined in Section 
31A-1-301
 and includes a person who is
authorized to act on the insured's behalf.
(e) "Insurer" is as defined in Section 
31A-1-301
 and includes:
(i) a health maintenance organization; and
(ii) a third party administrator that offers, sells, manages, or administers a health
insurance policy or health maintenance organization contract that is subject to this title.
(f) "Internal review" means the process an insurer uses to review an insured's adverse
benefit determination before the adverse benefit determination is submitted for independent
review.
(2) This section applies generally to health insurance policies, health maintenance
organization contracts, and income replacement or disability income policies.
(3) (a) An insured may submit an adverse benefit determination to the insurer.
(b) The insurer shall conduct an internal review of the insured's adverse benefit
determination.
(c) An insured who disagrees with the results of an internal review may submit the
adverse benefit determination for an independent review if the adverse benefit determination
involves:
(i) payment of a claim regarding medical necessity; or
(ii) denial of a claim regarding medical necessity.
(4) The commissioner shall adopt rules that establish minimum standards for:
(a) internal reviews;
(b) independent reviews to ensure independence and impartiality;
(c) the types of adverse benefit determinations that may be submitted to an independent
review; and
(d) the timing of the review process, including an expedited review when medically
necessary.
(5) Nothing in this section may be construed as:
(a) expanding, extending, or modifying the terms of a policy or contract with respect to
benefits or coverage;
(b) permitting an insurer to charge an insured for the internal review of an adverse
benefit determination;
(c) restricting the use of arbitration in connection with or subsequent to an independent
review; or
(d) altering the legal rights of any party to seek court or other redress in connection
with:
(i) an adverse decision resulting from an independent review, except that if the insurer
is the party seeking legal redress, the insurer shall pay for the reasonable attorney fees of the
insured related to the action and court costs; or
(ii) an adverse benefit determination or other claim that is not eligible for submission
to independent review.
(6) (a) An independent review organization in relation to the insurer may not be:
(i) the insurer;
(ii) the health plan;
(iii) the health plan's fiduciary;
(iv) the employer; or
(v) an employee or agent of any one listed in Subsections (6)(a)(i) through (iv).
(b) An independent review organization may not have a material professional, familial,
or financial conflict of interest with:
(i) the health plan;
(ii) an officer, director, or management employee of the health plan;
(iii) the enrollee;
(iv) the enrollee's health care provider;
(v) the health care provider's medical group or independent practice association;
(vi) a health care facility where service would be provided; or
(vii) the developer or manufacturer of the service that would be provided.
Section 23. Section 
31A-22-701
 is amended to read:
31A-22-701.
Groups eligible for group or blanket insurance.
(1) As used in this section, "association group" means a lawfully formed association of
individuals or business entities that:
(a) purchases insurance on a group basis on behalf of members; and
(b) is formed and maintained in good faith for purposes other than obtaining insurance.
(2) A group accident and health insurance policy may be issued to:
(a) a group:
(i) to which a group life insurance policy may be issued under [
Sections
] 
Section
31A-22-502
, 
31A-22-503
, 
31A-22-504
, 
31A-22-506
, 
or
31A-22-507[
, and 
31A-22-509
]; and
(ii) that is formed and maintained in good faith for a purpose other than obtaining
insurance;
(b) an association group 
authorized by the commissioner
 that:
(i) has been actively in existence for at least five years;
(ii) has a constitution and bylaws;
(iii) has a shared or common purpose that is not primarily a business or customer
relationship;
(iv) is formed and maintained in good faith for purposes other than obtaining
insurance;
(v) does not condition membership in the association group on any health status-related
factor relating to an individual, including an employee of an employer or a dependent of an
employee;
(vi) makes accident and health insurance coverage offered through the association
group available to all members regardless of any health status-related factor relating to the
members or individuals eligible for coverage through a member;
(vii) does not make accident and health insurance coverage offered through the
association group available other than in connection with a member of the association group;
and
(viii) is actuarially sound; or
(c) a group specifically authorized by the commissioner [
under Section 
31A-22-509
],
upon a finding that:
(i) authorization is not contrary to the public interest;
(ii) the group is actuarially sound;
(iii) formation of the proposed group may result in economies of scale in acquisition,
administrative, marketing, and brokerage costs;
(iv) the insurance policy, insurance certificate, or other indicia of coverage that will be
offered to the proposed group is substantially equivalent to insurance policies that are
otherwise available to similar groups;
(v) the group would not present hazards of adverse selection;
(vi) the premiums for the insurance policy and any contributions by or on behalf of the
insured persons are reasonable in relation to the benefits provided; and
(vii) the group is formed and maintained in good faith for a purpose other than
obtaining insurance.
(3) A blanket accident and health insurance policy:
(a) covers a defined class of persons;
(b) may not be offered or underwritten on an individual basis;
(c) shall cover only a group that is:
(i) actuarially sound; and
(ii) formed and maintained in good faith for a purpose other than obtaining insurance;
and
(d) may be issued only to:
(i) a common carrier or an operator, owner, or lessee of a means of transportation, as
policyholder, covering persons who may become passengers as defined by reference to the
person's travel status;
(ii) an employer, as policyholder, covering any group of employees, dependents, or
guests, as defined by reference to specified hazards incident to any activities of the
policyholder;
(iii) an institution of learning, including a school district, a school jurisdictional unit, or
the head, principal, or governing board of a school jurisdictional unit, as policyholder, covering
students, teachers, or employees;
(iv) a religious, charitable, recreational, educational, or civic organization, or branch of
one of those organizations, as policyholder, covering a group of members or participants as
defined by reference to specified hazards incident to the activities sponsored or supervised by
the policyholder;
(v) a sports team, camp, or sponsor of a sports team or camp, as policyholder, covering
members, campers, employees, officials, or supervisors;
(vi) a volunteer fire department, first aid, civil defense, or other similar volunteer
organization, as policyholder, covering a group of members or participants as defined by
reference to specified hazards incident to activities sponsored, supervised, or participated in by
the policyholder;
(vii) a newspaper or other publisher, as policyholder, covering its carriers;
(viii) an association, including a labor union, that has a constitution and bylaws and
that is organized in good faith for purposes other than that of obtaining insurance, as
policyholder, covering a group of members or participants as defined by reference to specified
hazards incident to the activities or operations sponsored or supervised by the policyholder; and
(ix) any other class of risks that, in the judgment of the commissioner, may be properly
eligible for blanket accident and health insurance.
(4) The judgment of the commissioner may be exercised on the basis of:
(a) individual risks;
(b) a class of risks; or
(c) both Subsections (4)(a) and (b).
Section 24. Section 
31A-22-722
 is amended to read:
31A-22-722.
Utah mini-COBRA benefits for employer group coverage.
(1) An insured may extend the employee's coverage under the current employer's group
policy for a period of 12 months, except as provided in [
Subsections (2) and 
31A-22-722.5
(4)
]
Subsection (2)
. The right to extend coverage includes:
(a) voluntary termination;
(b) involuntary termination;
(c) retirement;
(d) death;
(e) divorce or legal separation;
(f) loss of dependent status;
(g) sabbatical;
(h) a disability;
(i) leave of absence; or
(j) reduction of hours.
(2) (a) Notwithstanding Subsection (1), an employee may not extend coverage under
the current employer's group insurance policy if the employee:
(i) fails to pay premiums or contributions in accordance with the terms of the insurance
policy;
(ii) acquires other group coverage covering all preexisting conditions including
maternity, if the coverage exists;
(iii) performs an act or practice that constitutes fraud in connection with the coverage;
(iv) makes an intentional misrepresentation of material fact under the terms of the
coverage;
(v) is terminated from employment for gross misconduct;
(vi) is not continuously covered under the current employer's group policy for a period
of three months immediately before the termination of the insurance policy due to an event set
forth in Subsection (1);
(vii) is eligible for an extension of coverage required by federal law;
(viii) establishes residence outside of this state;
(ix) moves out of the insurer's service area;
(x) is eligible for similar coverage under another group insurance policy; or
(xi) has the employee's coverage terminated because the employer's coverage is
terminated, except as provided in Subsection (8).
(b) The right to extend coverage under Subsection (1) applies to spouse or dependent
coverage, including a surviving spouse or dependents whose coverage under the insurance
policy terminates by reason of the death of the employee or member.
(3) (a) The employer shall notify the following in writing of the right to extend group
coverage and the payment amounts required for extension of coverage, including the manner,
place, and time in which the payments shall be made:
(i) a terminated insured;
(ii) an ex-spouse of an insured; or
(iii) if Subsection (2)(b) applies:
(A) a surviving spouse; and
(B) the guardian of surviving dependents, if different from a surviving spouse.
(b) The notification required in Subsection (3)(a) shall be sent first class mail within 30
days after the termination date of the group coverage to:
(i) the terminated insured's home address as shown on the records of the employer;
(ii) the address of the surviving spouse, if different from the insured's address and if
shown on the records of the employer;
(iii) the guardian of any dependents address, if different from the insured's address, and
if shown on the records of the employer; and
(iv) the address of the ex-spouse, if shown on the records of the employer.
(4) The insurer shall provide the employee, spouse, or any eligible dependent the
opportunity to extend the group coverage at the payment amount stated in Subsection (5) if:
(a) the employer policyholder does not provide the terminated insured the written
notification required by Subsection (3)(a); and
(b) the employee or other individual eligible for extension contacts the insurer within
60 days of coverage termination.
(5) 
(a)
 A premium amount for extended group coverage may not exceed 102% of the
group rate in effect for a group member, including an employer's contribution, if any, for a
group insurance policy.
(b) Except as provided in Subsection (5)(a), an insurer may not charge an insured an
additional fee, an additional premium, interest, or any similar charge for electing extended
group coverage.
(6) Except as provided in this Subsection (6), coverage extends without interruption for
12 months and may not terminate if the terminated insured or, with respect to a minor, the
parent or guardian of the terminated insured:
(a) elects to extend group coverage within 60 days of losing group coverage; and
(b) tenders the amount required to the employer or insurer.
(7) The insured's coverage may be terminated before 12 months if the terminated
insured:
(a) establishes residence outside of this state;
(b) moves out of the insurer's service area;
(c) fails to pay premiums or contributions in accordance with the terms of the insurance
policy, including any timeliness requirements;
(d) performs an act or practice that constitutes fraud in connection with the coverage;
(e) makes an intentional misrepresentation of material fact under the terms of the
coverage;
(f) becomes eligible for similar coverage under another group insurance policy; or
(g) has the coverage terminated because the employer's coverage is terminated, except
as provided in Subsection (8).
(8) If the current employer coverage is terminated and the employer replaces coverage
with similar coverage under another group insurance policy, without interruption, the
terminated insured, spouse, or the surviving spouse and guardian of dependents if Subsection
(2)(b) applies, may obtain extension of coverage under the replacement group insurance policy:
(a) for the balance of the period the terminated insured would have extended coverage
under the replaced group insurance policy; and
(b) if the terminated insured is otherwise eligible for extension of coverage.
(9) An insurer shall require an insured employer to offer to the following individuals an
open enrollment period at the same time as other regular employees:
(a) an individual who extends group coverage and is current on payment; and
(b) during the applicable grace period described in Subsection (3) or (4), an individual
who is eligible to elect to extend group coverage.
Section 25. Section 
31A-23a-107
 is amended to read:
31A-23a-107.
Character requirements.
An applicant for a license under this chapter shall show to the commissioner that:
(1) the applicant has the intent in good faith, to engage in the type of business that the
license applied for would permit;
(2) (a) if a natural person, the applicant is
:
(i)
 competent
;
 and
(ii)
 trustworthy; or
(b) if the applicant is an agency:
(i) the partners, directors, or principal officers or persons having comparable powers
are trustworthy; and
(ii) that it will transact business in such a way that the acts that may only be performed
by a licensed producer, surplus lines producer, limited line producer, consultant, managing
general agent, or reinsurance intermediary are performed exclusively by natural persons who
are licensed under this chapter to transact that type of business and designated on the agency's
license;
(3) the applicant intends to comply with Section 
31A-23a-502
; and
(4) if a natural person, the applicant is at least 18 years of age.
Section 26. Section 
31A-23a-109
 is amended to read:
31A-23a-109.
Nonresident jurisdictional agreement.
(1) (a) If a nonresident license applicant has a valid producer, surplus lines producer,
limited line producer, consultant, managing general agent, or reinsurance intermediary license
from the nonresident license applicant's home state 
or designated home state
 and the conditions
of Subsection (1)(b) are met, the commissioner shall:
(i) waive the license requirements for a license under this chapter; and
(ii) issue the nonresident license applicant a nonresident license.
(b) Subsection (1)(a) applies if:
(i) the nonresident license applicant:
(A) is licensed [
as a resident
] in the nonresident license applicant's home state 
or
designated home state
 at the time the nonresident license applicant applies for a nonresident
producer, surplus lines producer, limited line producer, consultant, managing general agent, or
reinsurance intermediary license;
(B) has submitted the proper request for licensure;
(C) has submitted to the commissioner:
(I) the application for licensure that the nonresident license applicant submitted to the
applicant's home state 
or designated home state
; or
(II) a completed uniform application; and
(D) has paid the applicable fees under Section 
31A-3-103
; and
(ii) the nonresident license applicant's license in the applicant's home state 
or
designated home state
 is in good standing.
(2) A nonresident applicant applying under Subsection (1) shall in addition to
complying with all license requirements for a license under this chapter execute, in a form
acceptable to the commissioner, an agreement to be subject to the jurisdiction of the Utah
commissioner and courts on any matter related to the applicant's insurance activities in this
state, on the basis of:
(a) service of process under Sections 
31A-2-309
 and 
31A-2-310
; or
(b) service authorized:
(i) in the Utah Rules of Civil Procedure; or
(ii) under Section 
78B-3-206
.
(3) The commissioner may verify a producer's licensing status through the producer
database maintained by:
(a) the National Association of Insurance Commissioners; or
(b) an affiliate or subsidiary of the National Association of Insurance Commissioners.
(4) The commissioner may not assess a greater fee for an insurance license or related
service to a person not residing in this state solely on the fact that the person does not reside in
this state.
Section 27. Section 
31A-23a-111
 is amended to read:
31A-23a-111.
Revoking, suspending, surrendering, lapsing, limiting, or otherwise
terminating a license -- Forfeiture -- 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;
(iv) deny a license application;
(v) assess a forfeiture under Subsection 
31A-2-308
(1)(b)(i) or (1)(c)(i); or
(vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
Subsection (5)(a)(v).
(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 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)
 a felony; 
or
(B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
(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 
had
 an insurance license 
or other professional or occupational license
, or [
its
]
an
 equivalent[
,
] 
to an insurance license or other professional or occupational license:
(A)
 denied[
,
]
;
(B)
 suspended[
, or
]
;
(C)
 revoked [
in another state, province, district, or territory
]; 
or
(D) surrendered to resolve an administrative action;
(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 28. Section 
31A-23a-208
 is amended to read:
31A-23a-208.
Producer and agency authority in health insurance exchange.
A producer or agency licensed under this chapter, with a line of authority that permits
the producer or agency to sell, negotiate, or solicit accident and health insurance, is authorized
to sell, negotiate, or solicit qualified health plans offered on [
an
] 
a health insurance
 exchange
[
that is:
]
.
[
(1) operated in the state; or
]
[
(2) operated in the state and certified by the United States Department of Health and
Human Services as a:
]
[
(a) state-based exchange under PPACA;
]
[
(b) a federally facilitated exchange under PPACA; or
]
[
(c) a partnership exchange under PPACA.
]
Section 29. Section 
31A-23a-406
 is amended to read:
31A-23a-406.
Title insurance producer's business.
(1) An individual title insurance producer or agency title insurance producer may do
escrow involving real property transactions if all of the following exist:
(a) the individual title insurance producer or agency title insurance producer is licensed
with:
(i) the title line of authority; and
(ii) the escrow subline of authority;
(b) the individual title insurance producer or agency title insurance producer is
appointed by a title insurer authorized to do business in the state;
(c) the individual title insurance producer or agency title insurance producer issues one
or more of the following as part of the transaction:
(i) an owner's policy of title insurance; [
or
]
(ii) a lender's policy of title insurance; 
or
(iii) if the transaction does not involve a transfer of ownership, an endorsement to an
owner's or a lender's policy of title insurance;
(d) money deposited with the individual title insurance producer or agency title
insurance producer in connection with any escrow:
(i) is deposited:
(A) in a federally insured financial institution; and
(B) in a trust account that is separate from all other trust account money that is not
related to real estate transactions;
(ii) is the property of the one or more persons entitled to the money under the
provisions of the escrow; and
(iii) is segregated escrow by escrow in the records of the individual title insurance
producer or agency title insurance producer;
(e) earnings on money held in escrow may be paid out of the escrow account to any
person in accordance with the conditions of the escrow;
(f) the escrow does not require the individual title insurance producer or agency title
insurance producer to hold:
(i) construction money; or
(ii) money held for exchange under Section 1031, Internal Revenue Code; and
(g) the individual title insurance producer or agency title insurance producer shall
maintain a physical office in Utah staffed by a person with an escrow subline of authority who
processes the escrow.
(2) Notwithstanding Subsection (1), an individual title insurance producer or agency
title insurance producer may engage in the escrow business if:
(a) the escrow involves:
(i) a mobile home;
(ii) a grazing right;
(iii) a water right; or
(iv) other personal property authorized by the commissioner; and
(b) the individual title insurance producer or agency title insurance producer complies
with this section except for Subsection (1)(c).
(3) Money held in escrow:
(a) is not subject to any debts of the individual title insurance producer or agency title
insurance producer;
(b) may only be used to fulfill the terms of the individual escrow under which the
money is accepted; and
(c) may not be used until the conditions of the escrow are met.
(4) Assets or property other than escrow money received by an individual title
insurance producer or agency title insurance producer in accordance with an escrow shall be
maintained in a manner that will:
(a) reasonably preserve and protect the asset or property from loss, theft, or damages;
and
(b) otherwise comply with the general duties and responsibilities of a fiduciary or
bailee.
(5) (a) A check from the trust account described in Subsection (1)(d) may not be
drawn, executed, or dated, or money otherwise disbursed unless the segregated escrow account
from which money is to be disbursed contains a sufficient credit balance consisting of collected
and cleared money at the time the check is drawn, executed, or dated, or money is otherwise
disbursed.
(b) As used in this Subsection (5), money is considered to be "collected and cleared,"
and may be disbursed as follows:
(i) cash may be disbursed on the same day the cash is deposited;
(ii) a wire transfer may be disbursed on the same day the wire transfer is deposited; and
(iii) the proceeds of one or more of the following financial instruments may be
disbursed on the same day the financial instruments are deposited if received from a single
party to the real estate transaction and if the aggregate of the financial instruments for the real
estate transaction is less than $10,000:
(A) a cashier's check, certified check, or official check that is drawn on an existing
account at a federally insured financial institution;
(B) a check drawn on the trust account of a principal broker or associate broker
licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act, if the individual
title insurance producer or agency title insurance producer has reasonable and prudent grounds
to believe sufficient money will be available from the trust account on which the check is
drawn at the time of disbursement of proceeds from the individual title insurance producer or
agency title insurance producer's escrow account;
(C) a personal check not to exceed $500 per closing; or
(D) a check drawn on the escrow account of another individual title insurance producer
or agency title insurance producer, if the individual title insurance producer or agency title
insurance producer in the escrow transaction has reasonable and prudent grounds to believe
that sufficient money will be available for withdrawal from the account upon which the check
is drawn at the time of disbursement of money from the escrow account of the individual title
insurance producer or agency title insurance producer in the escrow transaction.
(c) A check or deposit not described in Subsection (5)(b) may be disbursed:
(i) within the time limits provided under the Expedited Funds Availability Act, 12
U.S.C. Sec. 4001 et seq., as amended, and related regulations of the Federal Reserve System; or
(ii) upon notification from the financial institution to which the money has been
deposited that final settlement has occurred on the deposited financial instrument.
(6) An individual title insurance producer or agency title insurance producer shall
maintain a record of a receipt or disbursement of escrow money.
(7) An individual title insurance producer or agency title insurance producer shall
comply with:
(a) Section 
31A-23a-409
;
(b) Title 46, Chapter 1, Notaries Public Reform Act; and
(c) any rules adopted by the Title and Escrow Commission, subject to Section
31A-2-404
, that govern escrows.
(8) If an individual title insurance producer or agency title insurance producer conducts
a search for real estate located in the state, the individual title insurance producer or agency
title insurance producer shall conduct a reasonable search of the public records.
Section 30. Section 
31A-23b-102
 is amended to read:
31A-23b-102.
Definitions.
As used in this chapter:
(1) "Enroll" and "enrollment" mean to:
(a) (i) obtain personally identifiable information about an individual; and
(ii) inform an individual about accident and health insurance plans or public programs
offered on an exchange;
(b) solicit insurance; or
(c) submit to the exchange:
(i) personally identifiable information about an individual; and
(ii) an individual's selection of a particular accident and health insurance plan or public
program offered on the exchange.
[
(2) (a) "Exchange" means an online marketplace that is certified by the United States
Department of Health and Human Services as either a state-based small employer exchange or
a federally facilitated individual exchange under PPACA.
]
[
(b) "Exchange" does not include an online marketplace for the purchase of health
insurance if the online marketplace is not a certified exchange in accordance with Subsection
(2)(a).
]
[
(3)
] 
(2)
 "Navigator":
(a) means a person who facilitates enrollment in an exchange by offering to assist, or
who advertises any services to assist, with:
(i) the selection of and enrollment in a qualified health plan or a public program
offered on an exchange; or
(ii) applying for premium subsidies through an exchange; and
(b) includes a person who is an in-person assister or a certified application counselor as
described in federal regulations or guidance issued under PPACA.
[
(4)
] 
(3)
 "Personally identifiable information" is as defined in 45 C.F.R. Sec. 155.260.
[
(5)
] 
(4)
 "Public programs" means the state Medicaid program in Title 26, Chapter 18,
Medical Assistance Act, and 
Title 26,
 Chapter 40, Utah Children's Health Insurance Act.
[
(6)
] 
(5)
 "Resident" is as defined by rule made by the commissioner in accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
[
(7)
] 
(6)
 "Solicit" [
is as
] 
means the same as that term is
 defined in Section
31A-23a-102
.
Section 31. Section 
31A-23b-202.5
 is amended to read:
31A-23b-202.5.
License types.
(1) A license issued under this chapter shall be issued under the license types described
in Subsection (2).
(2) A license type under this chapter shall be a navigator line of authority or a certified
application counselor line of authority. A license type is intended to describe the matters to be
considered under any education, examination, and training required of an applicant under this
chapter.
(3) (a) A navigator line of authority includes the enrollment process as described in
Subsection 
31A-23b-102
[
(3)
]
(2)
(a).
(b) (i) A certified application counselor line of authority is limited to providing
information and assistance to individuals and employees about public programs and premium
subsidies available through the exchange.
(ii) A certified application counselor line of authority does not allow the certified
application counselor to assist a person with the selection of or enrollment in a qualified health
plan offered on an exchange.
Section 32. Section 
31A-23b-204
 is amended to read:
31A-23b-204.
Character requirements.
An applicant for a license under this chapter shall demonstrate to the commissioner
that:
(1) the applicant has the intent, in good faith, to engage in the practice of a navigator as
the license would permit;
(2) (a) if a natural person, the applicant is
:
(i)
 competent
;
 and
(ii)
 trustworthy; or
(b) if the applicant is an agency:
(i) the partners, directors, or principal officers or persons having comparable powers
are trustworthy; and
(ii) that it will transact business in a way that the acts that may only be performed by a
licensed navigator are performed only by a natural person who is licensed under this chapter, or
Chapter 23a, Insurance Marketing-Licensing Producers, Consultants, and Reinsurance
Intermediaries;
(3) the applicant intends to comply with the surety bond requirements of Section
31A-23b-207
;
(4) if a natural person, the applicant is at least 18 years of age; and
(5) the applicant does not have a conflict of interest as defined by regulations issued
under PPACA.
Section 33. Section 
31A-23b-205
 is amended to read:
31A-23b-205.
Examination and training requirements.
(1) The commissioner may require an applicant for a license to pass an examination
and complete a training program as a requirement for a license.
(2) The examination described in Subsection (1) shall reasonably relate to:
(a) the duties and functions of a navigator;
(b) requirements for navigators as established by federal regulation under PPACA; and
(c) other requirements that may be established by the commissioner by administrative
rule.
(3) The examination may be administered by the commissioner or as otherwise
specified by administrative rule.
(4) The training required by Subsection (1) shall be approved by the commissioner and
shall include:
(a) accident and health insurance plans;
(b) qualifications for and enrollment in public programs;
(c) qualifications for and enrollment in premium subsidies;
(d) cultural and linguistic competence;
(e) conflict of interest standards;
(f) exchange functions; and
(g) other requirements that may be adopted by the commissioner by administrative
rule.
(5) (a) For the navigator line of authority, the training required by Subsection (1) shall
consist of at least 21 credit hours of training before obtaining the license, which shall
include[
:(i) at least two hours of training on defined contribution arrangements and the small
employer health insurance exchange; and (ii)
] the navigator training and certification program
developed by the Centers for Medicare and Medicaid Services.
(b) For the certified application counselor line of authority, the training required by
Subsection (1) shall consist of at least six hours of training before obtaining a license, which
shall include[
:(i) at least one hour of training on defined contribution arrangements and the
small employer health insurance exchange; and(ii)
] the certified application counselor training
and certification program developed by the Centers for Medicare and Medicaid Services.
(6) This section applies only to an applicant who is a natural person.
Section 34. Section 
31A-23b-206
 is amended to read:
31A-23b-206.
Continuing education requirements.
(1) The commissioner shall, by rule, prescribe continuing education requirements for a
navigator.
(2) (a) The commissioner may not require a degree from an institution of higher
education as part of continuing education.
(b) The commissioner may state a continuing education requirement in terms of hours
of instruction received in:
(i) accident and health insurance;
(ii) qualification for and enrollment in public programs;
(iii) qualification for and enrollment in premium subsidies;
(iv) cultural competency;
(v) conflict of interest standards; and
(vi) other exchange functions.
(3) (a) For a navigator line of authority, continuing education requirements shall
require:
(i) that a licensee complete 12 credit hours of continuing education for every one-year
licensing period;
(ii) that at least two of the 12 credit hours described in Subsection (3)(a)(i) be ethics
courses; 
and
[
(iii) that at least one of the 12 credit hours described in Subsection (3)(a)(i) be training
on defined contribution arrangements and the use of the small employer health insurance
exchange; and
]
[
(iv)
] 
(iii)
 that a licensee complete the annual navigator training and certification
program developed by the Centers for Medicare and Medicaid Services.
(b) For a certified application counselor, the continuing education requirements shall
require:
(i) that a licensee complete six credit hours of continuing education for every one-year
licensing period;
(ii) that at least two of the six credit hours described in Subsection (3)(b)(i) be on
ethics courses; 
and
[
(iii) that at least one of the six credit hours described in Subsection (3)(b)(i) be
training on defined contribution arrangements and the use of the small employer health
insurance exchange; and
]
[
(iv)
] 
(iii)
 that a licensee complete the annual certified application counselor training
and certification program developed by the Centers for Medicare and Medicaid Services.
(c) An hour of continuing education in accordance with Subsections (3)(a)(i) and (b)(i)
may be obtained through:
(i) classroom attendance;
(ii) home study;
(iii) watching a video recording; or
(iv) another method approved by rule.
(d) A licensee may obtain continuing education hours at any time during the one-year
license period.
(e) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commissioner shall, by rule, authorize one or more continuing education providers, including a
state or national professional producer or consultant associations, to:
(i) offer a qualified program on a geographically accessible basis; and
(ii) collect a reasonable fee for funding and administration of a continuing education
program, subject to the review and approval of the commissioner.
(4) The commissioner shall approve a continuing education provider or a continuing
education course that satisfies the requirements of this section.
(5) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
commissioner shall by rule establish the procedures for continuing education provider
registration and course approval.
(6) This section applies only to a navigator who is a natural person.
(7) A navigator shall keep documentation of completing the continuing education
requirements of this section for one year after the end of the one-year licensing period to which
the continuing education applies.
Section 35. Section 
31A-25-204
 is amended to read:
31A-25-204.
Character requirements.
Each applicant for a license under this chapter shall show to the commissioner all of the
following:
(1) [
he or it
] 
that the applicant
 has the good faith intent to engage in the type of
business the license applied for would permit;
(2) 
(a)
 if a natural person, [
he is
] 
that the applicant is:
(i)
 competent
;
 and
(ii)
 trustworthy[
,
]
;
 or[
,
]
(b)
 if a partnership or corporation, 
that
 all the partners, directors, principal officers, or
persons having comparable powers are trustworthy; and
(3) if a natural person, [
he
] 
that the applicant
 is at least 18 years of age.
Section 36. Section 
31A-25-206
 is amended to read:
31A-25-206.
Nonresident jurisdictional agreement.
(1) (a) If a nonresident license applicant has a valid license from the nonresident license
applicant's home state 
or designated home state
 and the conditions of Subsection (1)(b) are
met, the commissioner shall:
(i) waive any license requirement for a license under this chapter; and
(ii) issue the nonresident license applicant a nonresident third party administrator
license.
(b) Subsection (1)(a) applies if:
(i) the nonresident license applicant:
(A) is licensed [
as a resident
] in the nonresident license applicant's home state 
or
designated home state
 at the time the nonresident license applicant applies for a nonresident
third party administrator license;
(B) has submitted the proper request for licensure;
(C) has submitted to the commissioner:
(I) the application for licensure that the nonresident license applicant submitted to the
applicant's home state 
or designated home state
; or
(II) a completed uniform application; and
(D) has paid the applicable fees under Section 
31A-3-103
;
(ii) the nonresident license applicant's license in the applicant's home state 
or
designated home state
 is in good standing; and
(iii) the nonresident license applicant's home state 
or designated home state
 awards
nonresident third party administrator licenses to residents of this state on the same basis as this
state awards licenses to residents of that home state 
or designated home state
.
(2) A nonresident applicant shall execute in a form acceptable to the commissioner an
agreement to be subject to the jurisdiction of the Utah commissioner and courts on any matter
related to the applicant's insurance activities in Utah, on the basis of:
(a) service of process under Sections 
31A-2-309
 and 
31A-2-310
; or
(b) other service authorized in the Utah Rules of Civil Procedure.
(3) The commissioner may verify the third party administrator's licensing status
through the database maintained by:
(a) the National Association of Insurance Commissioners; or
(b) an affiliate or subsidiary of the National Association of Insurance Commissioners.
(4) The commissioner may not assess a greater fee for an insurance license or related
service to a person not residing in this state based solely on the fact that the person does not
reside in this state.
Section 37. Section 
31A-26-102
 is amended to read:
31A-26-102.
Definitions.
As used in this chapter, unless expressly provided otherwise:
(1) "Company adjuster" means a person employed by an insurer [
whose regular duties
include insurance adjusting
]
, or an entity under common control or ownership with the insurer,
who negotiates or settles claims on behalf of the employer
.
(2) "Designated home state" means the state or territory of the United States or the
District of Columbia:
(a) in which an insurance adjuster does not maintain the adjuster's principal:
(i) place of residence; or
(ii) place of business;
(b) if the resident state, territory, or District of Columbia of the adjuster does not
license adjusters for the line of authority sought, the adjuster has qualified for the license as if
the person were a resident in the state, territory, or District of Columbia described in
Subsection (2)(a), including an applicable:
(i) examination requirement;
(ii) fingerprint background check requirement; and
(iii) continuing education requirement; and
(c) the adjuster has designated the state, territory, or District of Columbia as the
designated home state.
(3) "Home state" means:
(a) a state or territory of the United States or the District of Columbia in which an
insurance adjuster:
(i) maintains the adjuster's principal:
(A) place of residence; or
(B) place of business; and
(ii) is licensed to act as a resident adjuster; or
(b) if the resident state, territory, or the District of Columbia described in Subsection
(3)(a) does not license adjusters for the line of authority sought, a state, territory, or the District
of Columbia:
(i) in which the adjuster is licensed;
(ii) in which the adjuster is in good standing; and
(iii) that the adjuster has designated as the adjuster's designated home state.
(4) "Independent adjuster" means an insurance adjuster required to be licensed under
Section 
31A-26-201
, who engages in insurance adjusting as a representative of one or more
insurers.
(5) "Insurance adjusting" or "adjusting" means directing or conducting the
investigation, negotiation, or settlement of a claim under an insurance policy, on behalf of an
insurer, policyholder, or a claimant under an insurance policy.
(6) "Organization" means a person other than a natural person, and includes a sole
proprietorship by which a natural person does business under an assumed name.
(7) "Portable electronics insurance" is as defined in Section 
31A-22-1802
.
(8) "Public adjuster" means a person required to be licensed under Section
31A-26-201
, who engages in insurance adjusting as a representative of insureds and claimants
under insurance policies.
Section 38. Section 
31A-26-205
 is amended to read:
31A-26-205.
Character requirements.
Each applicant for a license under this chapter shall show to the commissioner that:
(1) [
he
] 
the applicant
 has the good faith intent to engage in the type of business the
license or licenses applied for would permit;
(2) 
(a)
 if a natural person, [
he is
] 
the applicant is:
(i)
 competent
;
 and
(ii)
 trustworthy[
,
]
;
 or[
 that,
]
(b)
 if an organization, all the partners, directors, principal officers, or persons in fact
having comparable powers are trustworthy, and that [
it
] 
the applicant
 will transact business in
such a way that all acts that may only be performed by a licensed adjuster are performed
exclusively by natural persons who are licensed under this chapter to transact that business and
listed on the organization's license under Section 
31A-26-209
; and
(3) if a natural person, [
he
] 
the applicant
 is at least 18 years of age.
Section 39. Section 
31A-26-208
 is amended to read:
31A-26-208.
Nonresident jurisdictional agreement.
(1) (a) If a nonresident license applicant has a valid license from the nonresident
license applicant's home state 
or designated home state
 and the conditions of Subsection (1)(b)
are met, the commissioner shall:
(i) waive any license requirement for a license under this chapter; and
(ii) issue the nonresident license applicant a nonresident adjuster's license.
(b) Subsection (1)(a) applies if:
(i) the nonresident license applicant:
(A) is licensed [
as a resident
] in the nonresident license applicant's home state 
or
designated home state
 at the time the nonresident license applicant applies for a nonresident
adjuster license;
(B) has submitted the proper request for licensure;
(C) has submitted to the commissioner:
(I) the application for licensure that the nonresident license applicant submitted to the
applicant's home state 
or designated home state
; or
(II) a completed uniform application; and
(D) has paid the applicable fees under Section 
31A-3-103
;
(ii) the nonresident license applicant's license in the applicant's home state 
or
designated home state
 is in good standing; and
(iii) the nonresident license applicant's home state 
or designated home state
 awards
nonresident adjuster licenses to residents of this state on the same basis as this state awards
licenses to residents of that home state 
or designated home state
.
(2) A nonresident applicant shall execute in a form acceptable to the commissioner an
agreement to be subject to the jurisdiction of the commissioner and courts of this state on any
matter related to the adjuster's insurance activities in this state, on the basis of:
(a) service of process under Sections 
31A-2-309
 and 
31A-2-310
; or
(b) other service authorized under the Utah Rules of Civil Procedure or Section
78B-3-206
.
(3) The commissioner may verify an adjuster's licensing status through the database
maintained by:
(a) the National Association of Insurance Commissioners; or
(b) an affiliate or subsidiary of the National Association of Insurance Commissioners.
(4) The commissioner may not assess a greater fee for an insurance license or related
service to a person not residing in this state based solely on the fact that the person does not
reside in this state.
Section 40. Section 
31A-27a-111
 is amended to read:
31A-27a-111.
Actions by and against the receiver.
(1) (a) An allegation by the receiver of improper or fraudulent conduct against a person
may not be the basis of a defense to the enforcement of a contractual obligation owed to the
insurer by a third party.
(b) Notwithstanding Subsection (1)(a), a third party described in this Subsection (1) is
not barred by this section from seeking to establish independently as a defense that the conduct
is materially and substantially related to the contractual obligation for which enforcement is
sought.
(2) (a) Subject to Subsection (2)(b), a prior wrongful or negligent action of any present
or former officer, manager, director, trustee, owner, employee, or agent of the insurer may not
be asserted as a defense to a claim by the receiver:
(i) under a theory of:
(A) estoppel;
(B) comparative fault;
(C) intervening cause;
(D) proximate cause;
(E) reliance; or
(F) mitigation of damages; or
(ii) otherwise.
(b) Notwithstanding Subsection (2)(a):
(i) the affirmative defense of fraud in the inducement may be asserted against the
receiver in a claim based on a contract; and
(ii) a principal under a surety bond or a surety undertaking is entitled to credit against
any reimbursement obligation to the receiver for the value of any property pledged to secure the
reimbursement obligation to the extent that:
(A) the receiver has possession or control of the property; or
(B) the insurer or its agents misappropriated, including commingling, the property.
(c) Evidence of fraud in the inducement is admissible only if it is contained in the
records of the insurer.
(3) Action or inaction by an insurance regulatory authority may not be asserted as a
defense to a claim by the receiver.
(4) (a) Subject to Subsection (4)(b), a judgment or order entered against an insured or
the insurer in contravention of a stay or injunction under this chapter, or at any time by default
or collusion, may not be considered as evidence of liability or of the quantum of damages in
adjudicating claims filed in the estate arising out of the subject matter of the judgment or order.
(b) Subsection (4)(a) does not apply to an affected guaranty association's claim for
amounts paid on a settlement or judgment in pursuit of the affected guaranty association's
statutory obligations.
(5) (a) Subject to Subsection (5)(b), the following do not affect the amount that a
receiver may recover from a third party, regardless of any provision in an agreement to the
contrary:
(i) the insurer's insolvency; or
(ii) the insurer's or receiver's failure to pay all or a portion of an amount or a claim to
the third party.
(b) If an agreement between the insurer and a third party requires a payment by the
insurer before the insurer may recover from the third party, the amount the receiver may
recover from the third party under Subsection (5)(a) is limited to an amount equal to the greater
of:
(i) the amount paid by the insurer or by another person on behalf of the insurer to the
third party; or
(ii) the amount allowed as a claim for payment under:
(A) an approved report described in Section 
31A-27a-608
;
(B) an order of the receivership court; or
(C) a plan of rehabilitation.
[
(5)
] 
(6)
 The receiver may not be considered a governmental entity for the purposes of
any state law awarding fees to a litigant who prevails against a governmental entity.
Section 41. Section 
31A-27a-608
 is amended to read:
31A-27a-608.
Liquidator's recommendations to the receivership court.
(1) The liquidator shall, from time to time as determined by the liquidator, present to
the receivership court for approval, reports of claims settled or determined by the liquidator
under Section 
31A-27a-603
.
(2) A report required by this section shall include information identifying:
(a) the claim;
(b) the amount of the claim; and
(c) the priority class of the claim.
(3) (a) A claim included in a report described in this section and approved by the
receivership court is a liability of the estate.
(b) An insurer's insolvency does not affect the amount of a liability described in
Subsection (3)(a), regardless of any provision in an agreement to the contrary.
Section 42. Section 
31A-30-210
 is amended to read:
31A-30-210.
State contract requirements -- Employer default plans.
(1) This section applies to an employer who is required to offer [
its
] 
the employer's
employees a health benefit plan as a condition of qualifying for a state contract under:
(a) Section 
17B-2a-818.5
;
(b) Section 
19-1-206
;
[
(c) Subsection 
63A-5-205
(3);
]
(c) Subsection 
63A-5-205.5
;
(d) Section 
63C-9-403
;
(e) Section 
72-6-107.5
; and
(f) Section 
79-2-404
.
(2) An employer described in Subsection (1) shall, when selecting the default plan
required in Section 
31A-30-204
, select a default plan that is "qualified health insurance
coverage" as defined in the sections listed in Subsections (1)(a) through (f).
Section 43. Section 
31A-43-303
 is amended to read:
31A-43-303.
Stop-loss insurance disclosure.
A stop-loss insurance contract delivered, issued for delivery, or entered into shall
include the disclosure exhibit required by the commissioner through administrative rule, which
shall include at least the following information:
(1) the complete costs for the stop-loss contract;
(2) the date on which the insurance takes effect and terminates, including renewability
provisions;
(3) the aggregate attachment point and the specific attachment point;
(4) limitations on coverage;
(5) an explanation of monthly accommodation and disclosure about any monthly
accommodation features included in the stop-loss contract;
(6) a description of terminal liability funding, including the cost of processing claims
before and after the termination of the contract; [
and
]
(7) maximum claims liability to the employer[
.
]
; and
(8) a summary of the policy.
Section 44. Section 
31A-45-403
 is enacted to read:
 31A-45-403.
Essential health benefits.
(1) The state designates the state's own essential health benefits and does not accept a
federal determination of the essential health benefits under the PPACA.
(2) Subject to Subsections (3) and (4), the commissioner shall make rules in
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that designate the
essential health benefits for the state.
(3) Before the commissioner makes rules in accordance with Subsection (2):
(a) the commissioner shall present a summary of the commissioner's planned rules to
the Health Reform Task Force; and
(b) the Health Reform Task Force shall recommend whether the commissioner makes
rules in accordance with the presented summary.
(4) The essential health benefits plan:
(a) may not include a state mandate if the inclusion of the state mandate would require
the state to contribute to premium subsidies under the PPACA; and
(b) may add benefits in addition to the benefits included in a benchmark plan adopted
in accordance with this section if the additional benefits are mandated under the PPACA.
Section 45. Section 
34A-2-107
 is amended to read:
34A-2-107.
Appointment of workers' compensation advisory council --
Composition -- Terms of members -- Duties -- Compensation.
(1) The commissioner shall appoint a workers' compensation advisory council
composed of:
(a) the following voting members:
(i) five employer representatives; and
(ii) five employee representatives; and
(b) the following nonvoting members:
(i) a representative of the workers' compensation insurance carrier that provides
workers' compensation insurance under Section 
31A-22-1001
;
(ii) a representative of a workers' compensation insurance carrier different from the
workers' compensation insurance carrier listed in Subsection (1)(b)(i);
(iii) a representative of health care providers;
(iv) the Utah insurance commissioner or the insurance commissioner's designee; and
(v) the commissioner or the commissioner's designee.
(2) Employers and employees shall consider nominating members of groups who
historically may have been excluded from the council, such as women, minorities, and
individuals with disabilities.
(3) (a) Except as required by Subsection (3)(b), as terms of current council members
expire, the commissioner shall appoint each new member or reappointed member to a two-year
term beginning July 1 and ending June 30.
(b) Notwithstanding the requirements of Subsection (3)(a), the commissioner shall, at
the time of appointment or reappointment, adjust the length of terms to ensure that the terms of
council members are staggered so that approximately half of the council is appointed every two
years.
(4) (a) When a vacancy occurs in the membership for any reason, the replacement shall
be appointed for the unexpired term.
(b) The commissioner shall terminate the term of a council member who ceases to be
representative as designated by the member's original appointment.
(5) The council shall confer at least quarterly for the purpose of advising the
commission, the division, and the Legislature on:
(a) the Utah workers' compensation and occupational disease laws;
(b) the administration of the laws described in Subsection (5)(a); and
(c) rules related to the laws described in Subsection (5)(a).
(6) Regarding workers' compensation, rehabilitation, and reemployment of employees
who acquire a disability because of an industrial injury or occupational disease the council
shall:
(a) offer advice on issues requested by:
(i) the commission;
(ii) the division; and
(iii) the Legislature; and
(b) make recommendations to:
(i) the commission; and
(ii) the division.
[
(7) The council shall study how hospital costs may be reduced for purposes of medical
benefits for workers' compensation. By no later than November 30, 2017, the council shall
submit, in accordance with Section 
68-3-14
, a written report to the Business and Labor Interim
Committee containing the council's recommendations.
]
(7) (a) The council shall:
(i) study how to reduce hospital costs for purposes of medical benefits for workers'
compensation;
(ii) study hospital billing and payment trends in the state;
(iii) study hospital fee schedules used in other states; and
(iv) collect information from third-party hospital bill review companies in the state or
region to identify an average reimbursement rate that represents the approximate rate at which
a workers' compensation insurance carrier or self-insured employer should expect to reimburse
a hospital for billed hospital fees for covered medical services in the state.
(b) In accordance with Section 
68-3-14
, the council shall submit a written report to the
Business and Labor Interim Committee no later than September 1, 2019, 2020, and 2021. Each
written report shall include:
(i) recommendations on how to reduce hospital costs for purposes of medical benefits
for workers' compensation;
(ii) aggregate data on hospital billing and payment trends in the state;
(iii) the results of the council's study of hospital fee schedules from other states; and
(iv) the approximate rate at which a workers' compensation insurance carrier or
self-insured employer should expect to reimburse a hospital for billed hospital fees for covered
medical services, calculated in accordance with Subsection (7)(a)(iv).
(c) For each report described in Subsection (7)(b), the commission may contract with a
third-party expert to assist with the council's duties described in Subsections (7)(a) and (b).
(8) The commissioner or the commissioner's designee shall serve as the chair of the
council and call the necessary meetings.
(9) The commission shall provide staff support to the council.
(10) A member may not receive compensation or benefits for the member's service, but
may receive per diem and travel expenses in accordance with:
(a) Section 
63A-3-106
;
(b) Section 
63A-3-107
; and
(c) rules made by the Division of Finance pursuant to Sections 
63A-3-106
 and
63A-3-107
.
Section 46. Section 
34A-2-705
 is amended to read:
34A-2-705.
Industrial Accident Restricted Account.
(1) As used in this section:
(a) "Account" means the Industrial Accident Restricted Account created by this
section.
(b) "Advisory council" means the state workers' compensation advisory council created
under Section 
34A-2-107
.
(2) There is created in the General Fund a restricted account known as the "Industrial
Accident Restricted Account."
(3) (a) The account is funded from:
(i) .5% of the premium income remitted to the state treasurer and credited to the
account pursuant to Subsection 
59-9-101
(2)(c)(iv); and
(ii) amounts deposited under Section 
34A-2-1003
.
(b) If the balance in the account exceeds $500,000 at the close of a fiscal year, the
excess shall be transferred to the Uninsured Employers' Fund created under Section 
34A-2-704
.
(4) (a) From money appropriated by the Legislature from the account to the
commission and subject to the requirements of this section, the commission may fund:
(i) the activities of the Division of Industrial Accidents described in Section
34A-1-202
;
(ii) the activities of the Division of Adjudication described in Section 
34A-1-202
;
[
and
]
(iii) the activities of the commission described in Section 
34A-2-1005
[
.
]
; and
(iv) the activities of the commission described in Subsection 
34A-2-107
(7)(c), up to
$50,000 for each of the three reports described in Subsection 
34A-2-107
(7)(b).
(b) The money deposited in the account may not be used for a purpose other than a
purpose described in this Subsection (4), including an administrative cost or another activity of
the commission unrelated to the account.
(5) (a) Each year before the public hearing required by Subsection 
59-9-101
(2)(d)(i),
the commission shall report to the advisory council regarding:
(i) the commission's budget request to the governor for the next fiscal year related to:
(A) the Division of Industrial Accidents; and
(B) the Division of Adjudication;
(ii) the expenditures of the commission for the fiscal year in which the commission is
reporting related to:
(A) the Division of Industrial Accidents; and
(B) the Division of Adjudication;
(iii) revenues generated from the premium assessment under Section 
59-9-101
 on an
admitted insurer writing workers' compensation insurance in this state and on a self-insured
employer under Section 
34A-2-202
; and
(iv) money deposited under Section 
34A-2-1003
.
(b) The commission shall annually report to the governor and the Legislature
regarding:
(i) the use of the money appropriated to the commission under this section;
(ii) revenues generated from the premium assessment under Section 
59-9-101
 on an
admitted insurer writing workers' compensation insurance in this state and on a self-insured
employer under Section 
34A-2-202
; and
(iii) money deposited under Section 
34A-2-1003
.
Section 47. Section 
63A-5-205
 is amended to read:
63A-5-205.
Contracting powers of director -- Retainage.
[
(1) As used in this section:
]
[
(a) "Capital developments" means the same as that term is defined in Section
63A-5-104
.
]
[
(b) "Capital improvements" means the same as that term is defined in Section
63A-5-104
.
]
[
(c) "Employee" means an "employee," "worker," or "operative" as defined in Section
34A-2-104
 who:
]
[
(i) works at least 30 hours per calendar week; and
]
[
(ii) meets employer eligibility waiting requirements for health care insurance which
may not exceed the first day of the calendar month following 60 days from the date of hire.
]
[
(d) "Health benefit plan" means the same as that term is defined in Section
31A-1-301
.
]
[
(e) "Qualified health insurance coverage" means the same as that term is defined in
Section 
26-40-115
.
]
[
(f) "Subcontractor" means the same as that term is defined in Section 
63A-5-208
.
]
[
(2)
] 
(1)
 In accordance with Title 63G, Chapter 6a, Utah Procurement Code, the
director may:
(a) subject to [
Subsections (3) and (4)
] 
Section 
63A-5-205.5
, enter into [
contracts
] 
a
contract
 for any work or professional services [
which
] 
that
 the division or the State Building
Board may do or have done; and
(b) as a condition of any contract for architectural or engineering services, prohibit the
architect or engineer from retaining a sales or agent engineer for the necessary design work.
[
(3) Except as provided in Subsection (4), this Subsection (3) applies to
]
[
all design or construction contracts entered into by the division or the State Building
Board on or after July 1, 2009, and:
]
[
(a) applies to a prime contractor if the prime contract is in the amount of $2,000,000
or greater at the original execution of the contract; and
]
[
(b) applies to a subcontractor if the subcontract is in the amount of $1,000,000 or
greater at the original execution of the contract.
]
[
(4) Subsection (3) does not apply:
]
[
(a) if the application of Subsection (3) jeopardizes the receipt of federal funds;
]
[
(b) if the contract is a sole source contract;
]
[
(c) if the contract is an emergency procurement; or
]
[
(d) to a change order as defined in Section 
63G-6a-103
, or a modification to a
contract, when the contract does not meet the threshold required by Subsection (3).
]
[
(5) A person who intentionally uses change orders or contract modifications to
circumvent the requirements of Subsection (3) is guilty of an infraction.
]
[
(6) (a) A contractor subject to Subsection (3) shall demonstrate to the director that the
contractor has and will maintain an offer of qualified health insurance coverage for the
contractor's employees and the employees' dependents.
]
[
(b) If a subcontractor of the contractor is subject to Subsection (3), the contractor
shall:
]
[
(i) place a requirement in the subcontract that the subcontractor shall obtain and
maintain an offer of qualified health insurance coverage for the subcontractor's employees and
the employees' dependants during the duration of the subcontract; and
]
[
(ii) certify to the director that the subcontractor has and will maintain an offer of
qualified health insurance coverage for the subcontractor's employees and the employees'
dependents during the duration of the prime contract.
]
[
(c) (i) A contractor who fails to meet the requirements of Subsection (6)(a) during the
duration of the contract is subject to penalties in accordance with administrative rules adopted
by the division under Subsection (7).
]
[
(ii) A contractor is not subject to penalties for the failure of a subcontractor to meet
the requirements of Subsection (6)(b).
]
[
(iii) A subcontractor who fails to meet the requirements of Subsection (6)(b) during
the duration of the contract is subject to penalties in accordance with administrative rules
adopted by the division under Subsection (7).
]
[
(iv) A subcontractor is not subject to penalties for the failure of a contractor to meet
the requirements of Subsection (6)(a).
]
[
(7) The division shall adopt administrative rules:
]
[
(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
]
[
(b) in coordination with:
]
[
(i) the Department of Environmental Quality in accordance with Section 
19-1-206
;
]
[
(ii) the Department of Natural Resources in accordance with Section 
79-2-404
;
]
[
(iii) a public transit district in accordance with Section 
17B-2a-818.5
;
]
[
(iv) the State Capitol Preservation Board in accordance with Section 
63C-9-403
;
]
[
(v) the Department of Transportation in accordance with Section 
72-6-107.5
; and
]
[
(vi) the Legislature's Administrative Rules Review Committee; and
]
[
(c) that establish:
]
[
(i) the requirements and procedures a contractor must follow to demonstrate to the
director compliance with Subsections (3) through (10) that shall include:
]
[
(A) that a contractor shall demonstrate compliance with Subsection (6)(a) or (b) at the
time of the execution of each initial contract described in Subsection (3);
]
[
(B) that the contractor's compliance is subject to an audit by the division or the Office
of the Legislative Auditor General; and
]
[
(C) that the actuarially equivalent determination required for the qualified health
insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
department or division with a written statement of actuarial equivalency, which is not more
than one year old, regarding the contractor's offer of qualified health coverage from an actuary
selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
developing the employer group's premium rates;
]
[
(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
violates the provisions of Subsections (3) through (10), which may include:
]
[
(A) a three-month suspension of the contractor or subcontractor from entering into
future contracts with the state upon the first violation;
]
[
(B) a six-month suspension of the contractor or subcontractor from entering into
future contracts with the state upon the second violation;
]
[
(C) an action for debarment of the contractor or subcontractor in accordance with
Section 
63G-6a-904
 upon the third or subsequent violation; and
]
[
(D) monetary penalties which may not exceed 50% of the amount necessary to
purchase qualified health insurance coverage for an employee and the dependents of an
employee of the contractor or subcontractor who was not offered qualified health insurance
coverage during the duration of the contract; and
]
[
(iii) a website on which the department shall post the commercially equivalent
benchmark, for the qualified health insurance coverage identified in Subsection (1)(e), that is
provided by the Department of Health, in accordance with Subsection 
26-40-115
(2).
]
[
(8) (a) In addition to the penalties imposed under Subsection (7)(c), a contractor or
subcontractor who intentionally violates the provisions of this section shall be liable to the
employee for health care costs that would have been covered by qualified health insurance
coverage.
]
[
(b) An employer has an affirmative defense to a cause of action under Subsection
(8)(a) if:
]
[
(i) the employer relied in good faith on a written statement of actuarial equivalency
provided by:
]
[
(A) an actuary; or
]
[
(B) an underwriter who is responsible for developing the employer group's premium
rates; or
]
[
(ii) the department determines that compliance with this section is not required under
the provisions of Subsection (4).
]
[
(c) An employee has a private right of action only against the employee's employer to
enforce the provisions of this Subsection (8).
]
[
(9) Any penalties imposed and collected under this section shall be deposited into the
Medicaid Restricted Account created by Section 
26-18-402
.
]
[
(10) The failure of a contractor or subcontractor to provide qualified health insurance
coverage as required by this section:
]
[
(a) may not be the basis for a protest or other action from a prospective bidder,
offeror, or contractor under Section 
63G-6a-1602
 or any other provision in Title 63G, Chapter
6a, Utah Procurement Code; and
]
[
(b) may not be used by the procurement entity or a prospective bidder, offeror, or
contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
or construction.
]
[
(11)
] 
(2)
 The judgment of the director as to the responsibility and qualifications of a
bidder is conclusive, except in case of fraud or bad faith.
[
(12)
] 
(3)
 The division shall make all payments to the contractor for completed work in
accordance with the contract and pay the interest specified in the contract on any payments that
are late.
[
(13)
] 
(4)
 If any payment on a contract with a private contractor to do work for the
division or the State Building Board is retained or withheld, it shall be retained or withheld and
released as provided in Section 
13-8-5
.
Section 48. Section 
63A-5-205.5
 is enacted to read:
 63A-5-205.5.
Health insurance requirements -- Penalties.
(1) As used in this section:
(a) "Aggregate" means the sum of all contracts, change orders, and modifications
related to a single project.
(b) "Change order" means the same as that term is defined in Section 
63G-6a-103
.
(c) "Employee" means, as defined in Section 
34A-2-104
, an "employee," "worker," or
"operative" who:
(i) works at least 30 hours per calendar week; and
(ii) meets employer eligibility waiting requirements for health care insurance, which
may not exceed the first day of the calendar month following 60 days after the day on which
the individual is hired.
(d) "Health benefit plan" means the same as that term is defined in Section 
31A-1-301
.
(e) "Qualified health insurance coverage" means the same as that term is defined in
Section 
26-40-115
.
(f) "Subcontractor" means the same as that term is defined in Section 
63A-5-208
.
(2) Except as provided in Subsection (3), the requirements of this section apply to:
(a) a contractor of a design or construction contract entered into by the division or the
State Building Board on or after July 1, 2009, if the prime contract is in an aggregate amount
equal to or greater than $2,000,000; and
(b) a subcontractor of a contractor of a design or construction contract entered into by
the division or State Building Board on or after July 1, 2009, if the subcontract is in an
aggregate amount equal to or greater than $1,000,000.
(3) The requirements of this section do not apply to a contractor or subcontractor
described in Subsection (2) if:
(a) the application of this section jeopardizes the receipt of federal funds;
(b) the contract is a sole source contract; or
(c) the contract is an emergency procurement.
(4) A person that intentionally uses change orders, contract modifications, or multiple
contracts to circumvent the requirements of this section is guilty of an infraction.
(5) (a) A contractor that is subject to the requirements of this section shall demonstrate
to the director that the contractor has and will maintain an offer of qualified health insurance
coverage for the contractor's employees and the employees' dependents by submitting to the
director a written statement that:
(i) the contractor offers qualified health insurance coverage that complies with Section
26-40-115
;
(ii) is from:
(A) an actuary selected by the contractor or the contractor's insurer; or
(B) an underwriter who is responsible for developing the employer group's premium
rates; and
(iii) was created within one year before the day on which the statement is submitted.
(b) A contractor that is subject to the requirements of this section shall:
(i) place a requirement in each of the contractor's subcontracts that a subcontractor that
is subject to the requirements of this section shall obtain and maintain an offer of qualified
health insurance coverage for the subcontractor's employees and the employees' dependents
during the duration of the subcontract; and
(ii) obtain from a subcontractor that is subject to the requirements of this section a
written statement that:
(A) the subcontractor offers qualified health insurance coverage that complies with
Section 
26-40-115
;
(B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
underwriter who is responsible for developing the employer group's premium rates; and
(C) was created within one year before the day on which the contractor obtains the
statement.
(c) (i) (A) A contractor that fails to maintain an offer of qualified health insurance
coverage described in Subsection (5)(a) during the duration of the contract is subject to
penalties in accordance with administrative rules adopted by the division under Subsection (6).
(B) A contractor is not subject to penalties for the failure of a subcontractor to obtain
and maintain an offer of qualified health insurance coverage described in Subsection (5)(b)(i).
(ii) (A) A subcontractor that fails to obtain and maintain an offer of qualified health
insurance coverage described in Subsection (5)(b)(i) during the duration of the subcontract is
subject to penalties in accordance with administrative rules adopted by the division under
Subsection (6).
(B) A subcontractor is not subject to penalties for the failure of a contractor to maintain
an offer of qualified health insurance coverage described in Subsection (5)(a).
(6) The division shall adopt administrative rules:
(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(b) in coordination with:
(i) the Department of Environmental Quality in accordance with Section 
19-1-206
;
(ii) the Department of Natural Resources in accordance with Section 
79-2-404
;
(iii) a public transit district in accordance with Section 
17B-2a-818.5
;
(iv) the State Capitol Preservation Board in accordance with Section 
63C-9-403
;
(v) the Department of Transportation in accordance with Section 
72-6-107.5
; and
(vi) the Legislature's Administrative Rules Review Committee; and
(c) that establish:
(i) the requirements and procedures a contractor and a subcontractor shall follow to
demonstrate compliance with this section, including:
(A) that a contractor or subcontractor's compliance with this section is subject to an
audit by the division or the Office of the Legislative Auditor General;
(B) that a contractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(a); and
(C) that a subcontractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(b)(ii);
(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
violates the provisions of this section, which may include:
(A) a three-month suspension of the contractor or subcontractor from entering into
future contracts with the state upon the first violation;
(B) a six-month suspension of the contractor or subcontractor from entering into future
contracts with the state upon the second violation;
(C) an action for debarment of the contractor or subcontractor in accordance with
Section 
63G-6a-904
 upon the third or subsequent violation; and
(D) monetary penalties which may not exceed 50% of the amount necessary to
purchase qualified health insurance coverage for employees and dependents of employees of
the contractor or subcontractor who were not offered qualified health insurance coverage
during the duration of the contract; and
(iii) a website on which the department shall post the commercially equivalent
benchmark for the qualified health insurance coverage that is provided by the Department of
Health in accordance with Subsection 
26-40-115
(2).
(7) (a) During the duration of a contract, the division may perform an audit to verify a
contractor or subcontractor's compliance with this section.
(b) Upon the division's request, a contractor or subcontractor shall provide the division:
(i) a signed actuarial certification that the coverage the contractor or subcontractor
offers is qualified health insurance coverage; or
(ii) all relevant documents and information necessary for the division to determine
compliance with this section.
(c) If a contractor or subcontractor provides the documents and information described
in Subsection (7)(b)(ii), the Insurance Department shall assist the division in determining if the
coverage the contractor or subcontractor offers is qualified health insurance coverage.
(8) (a) (i) In addition to the penalties imposed under Subsection (6)(c)(ii), a contractor
or subcontractor that intentionally violates the provisions of this section is liable to the
employee for health care costs that would have been covered by qualified health insurance
coverage.
(ii) An employer has an affirmative defense to a cause of action under Subsection
(8)(a) if:
(A) the employer relied in good faith on a written statement described in Subsection
(5)(a) or (5)(b)(ii); or
(B) the department determines that compliance with this section is not required under
the provisions of Subsection (3).
(b) An employee has a private right of action only against the employee's employer to
enforce the provisions of this Subsection (8).
(9) Any penalties imposed and collected under this section shall be deposited into the
Medicaid Restricted Account created by Section 
26-18-402
.
(10) The failure of a contractor or subcontractor to provide qualified health insurance
coverage as required by this section:
(a) may not be the basis for a protest or other action from a prospective bidder, offeror,
or contractor under:
(i) Section 
63G-6a-1602
; or
(ii) any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
(b) may not be used by the procurement entity or a prospective bidder, offeror, or
contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
or construction.
Section 49. Section 
63C-9-403
 is amended to read:
63C-9-403.
Contracting power of executive director -- Health insurance coverage.
(1) [
For purposes of
] 
As used in
 this section:
(a) "Aggregate" means the sum of all contracts, change orders, and modifications
related to a single project.
(b) "Change order" means the same as that term is defined in Section 
63G-6a-103
.
[
(a)
] 
(c)
 "Employee" means
, as defined in Section 
34A-2-104
,
 an "employee,"
"worker," or "operative" [
as defined in Section 
34A-2-104
] who:
(i) works at least 30 hours per calendar week; and
(ii) meets employer eligibility waiting requirements for health care insurance
,
 which
may not exceed the first of the calendar month following 60 days [
from the date of hire
] 
after
the day on which the individual is hired
.
[
(b)
] 
(d)
 "Health benefit plan" means the same as that term is defined in Section
31A-1-301
.
[
(c)
] 
(e)
 "Qualified health insurance coverage" means the same as that term is defined
in Section 
26-40-115
.
[
(d)
] 
(f)
 "Subcontractor" means the same as that term is defined in Section 
63A-5-208
.
[
(2) (a) Except as provided in Subsection (3), this section applies to a design or
construction contract entered into by the board or on behalf of the board on or after July 1,
2009, and to a prime contractor or a subcontractor in accordance with Subsection (2)(b).
]
[
(b) (i) A prime contractor is subject to this section if the prime contract is in the
amount of $2,000,000 or greater at the original execution of the contract.
]
[
(ii) A subcontractor is subject to this section if a subcontract is in the amount of
$1,000,000 or greater at the original execution of the contract.
]
[
(3) This section does not apply if:
]
(2) Except as provided in Subsection (3), the requirements of this section apply to:
(a) a contractor of a design or construction contract entered into by the board, or on
behalf of the board, on or after July 1, 2009, if the prime contract is in an aggregate amount
equal to or greater than $2,000,000; and
(b) a subcontractor of a contractor of a design or construction contract entered into by
the board, or on behalf of the board, on or after July 1, 2009, if the subcontract is in an
aggregate amount equal to or greater than $1,000,000.
(3) The requirements of this section do not apply to a contractor or subcontractor
described in Subsection (2) if:
(a) the application of this section jeopardizes the receipt of federal funds;
(b) the contract is a sole source contract; or
(c) the contract is an emergency procurement.
[
(4) (a) This section does not apply to a change order as defined in Section
63G-6a-103
, or a modification to a contract, when the contract does not meet the initial
threshold required by Subsection (2).
]
[
(b)
] 
(4)
 A person [
who
] 
that
 intentionally uses change orders [
or
]
,
 contract
modifications
, or multiple contracts
 to circumvent the requirements of [
Subsection (2)
] 
this
section
 is guilty of an infraction.
(5) (a) A contractor subject to [
Subsection (2)
] 
the requirements of this section
 shall
demonstrate to the executive director that the contractor has and will maintain an offer of
qualified health insurance coverage for the contractor's employees and the employees'
dependents during the duration of the contract[
.
] 
by submitting to the executive director a
written statement that:
[
(b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
shall:
]
(i) the contractor offers qualified health insurance coverage that complies with Section
26-40-115
;
(ii) is from:
(A) an actuary selected by the contractor or the contractor's insurer; or
(B) an underwriter who is responsible for developing the employer group's premium
rates; and
(iii) was created within one year before the day on which the statement is submitted.
(b) A contractor that is subject to the requirements of this section shall:
(i) place a requirement in [
the subcontract that the subcontractor
] 
each of the
contractor's subcontracts that a subcontractor that is subject to the requirements of this section
shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
employees and the employees' dependents during the duration of the subcontract; and
[
(ii) certify to the executive director that the subcontractor has and will maintain an
offer of qualified health insurance coverage for the subcontractor's employees and the
employees' dependents during the duration of the prime contract.
]
(ii) obtain from a subcontractor that is subject to the requirements of this section a
written statement that:
(A) the subcontractor offers qualified health insurance coverage that complies with
Section 
26-40-115
;
(B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
underwriter who is responsible for developing the employer group's premium rates; and
(C) was created within one year before the day on which the contractor obtains the
statement.
(c) (i) (A) A contractor [
who fails to meet the requirements of
] 
that fails to maintain an
offer of qualified health insurance coverage as described in
 Subsection (5)(a) during the
duration of the contract is subject to penalties in accordance with administrative rules adopted
by the division under Subsection (6).
(B) A contractor is not subject to penalties for the failure of a subcontractor to [
meet
the requirements of
] 
obtain and maintain an offer of qualified health insurance coverage
described in
 Subsection (5)(b)
(i)
.
(ii) (A) A subcontractor [
who fails to meet the requirements of
] 
that fails to obtain and
maintain an offer of qualified health insurance coverage described in
 Subsection (5)(b)
(i)
during the duration of the [
contract
] 
subcontract
 is subject to penalties in accordance with
administrative rules adopted by the department under Subsection (6).
(B) A subcontractor is not subject to penalties for the failure of a contractor to [
meet
the requirements of
] 
maintain an offer of qualified health insurance coverage described in
Subsection (5)(a).
(6) The department shall adopt administrative rules:
(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(b) in coordination with:
(i) the Department of Environmental Quality in accordance with Section 
19-1-206
;
(ii) the Department of Natural Resources in accordance with Section 
79-2-404
;
(iii) the State Building Board in accordance with Section [
63A-5-205
] 
63A-5-205.5
;
(iv) a public transit district in accordance with Section 
17B-2a-818.5
;
(v) the Department of Transportation in accordance with Section 
72-6-107.5
; and
(vi) the Legislature's Administrative Rules Review Committee; and
(c) that establish:
(i) the requirements and procedures a contractor [
must
] 
and a subcontractor shall
follow to demonstrate [
to the executive director
] compliance with this section [
that shall
include
]
, including
:
[
(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
time of the execution of each initial contract described in Subsection (2)(b);
]
[
(B) that the contractor's
]
(A) that a contractor or subcontractor's
 compliance 
with this section
 is subject to an
audit by the department or the Office of the Legislative Auditor General; [
and
]
[
(C) that the actuarially equivalent determination required for the qualified health
insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
department or division with a written statement of actuarial equivalency, which is no more than
one year old, regarding the contractor's offer of qualified health coverage from an actuary
selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
developing the employer group's premium rates;
]
(B) that a contractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(a); and
(C) that a subcontractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(b)(ii);
(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
violates the provisions of this section, which may include:
(A) a three-month suspension of the contractor or subcontractor from entering into
future contracts with the state upon the first violation;
(B) a six-month suspension of the contractor or subcontractor from entering into future
contracts with the state upon the second violation;
(C) an action for debarment of the contractor or subcontractor in accordance with
Section 
63G-6a-904
 upon the third or subsequent violation; and
(D) monetary penalties which may not exceed 50% of the amount necessary to
purchase qualified health insurance coverage for employees and dependents of employees of
the contractor or subcontractor who were not offered qualified health insurance coverage
during the duration of the contract; and
(iii) a website on which the department shall post the commercially equivalent
benchmark, for the qualified health insurance coverage identified in Subsection (1)[
(c)
]
(e)
, that
is provided by the Department of Health, in accordance with Subsection 
26-40-115
(2).
(7) (a) (i) In addition to the penalties imposed under Subsection (6)(c)
(ii)
, a contractor
or subcontractor who intentionally violates the provisions of this section [
shall be
] 
is
 liable to
the employee for health care costs that would have been covered by qualified health insurance
coverage.
(ii) An employer has an affirmative defense to a cause of action under Subsection
(7)(a)(i) if:
(A) the employer relied in good faith on a written statement [
of actuarial equivalency
provided by:
] 
described in Subsection (5)(a) or (5)(b)(ii); or
[
(I) an actuary; or
]
[
(II) an underwriter who is responsible for developing the employer group's premium
rates; or
]
(B) the department determines that compliance with this section is not required under
the provisions of Subsection (3) [
or (4)
].
(b) An employee has a private right of action only against the employee's employer to
enforce the provisions of this Subsection (7).
(8) Any penalties imposed and collected under this section shall be deposited into the
Medicaid Restricted Account created in Section 
26-18-402
.
(9) The failure of a contractor or subcontractor to provide qualified health insurance
coverage as required by this section:
(a) may not be the basis for a protest or other action from a prospective bidder, offeror,
or contractor under
:
(i)
 Section 
63G-6a-1602
;
 or
(ii)
 any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
(b) may not be used by the procurement entity or a prospective bidder, offeror, or
contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
or construction.
Section 50. Section 
63G-2-305
 is amended to read:
63G-2-305.
Protected records.
The following records are protected if properly classified by a governmental entity:
(1) trade secrets as defined in Section 
13-24-2
 if the person submitting the trade secret
has provided the governmental entity with the information specified in Section 
63G-2-309
;
(2) commercial information or nonindividual financial information obtained from a
person if:
(a) disclosure of the information could reasonably be expected to result in unfair
competitive injury to the person submitting the information or would impair the ability of the
governmental entity to obtain necessary information in the future;
(b) the person submitting the information has a greater interest in prohibiting access
than the public in obtaining access; and
(c) the person submitting the information has provided the governmental entity with
the information specified in Section 
63G-2-309
;
(3) commercial or financial information acquired or prepared by a governmental entity
to the extent that disclosure would lead to financial speculations in currencies, securities, or
commodities that will interfere with a planned transaction by the governmental entity or cause
substantial financial injury to the governmental entity or state economy;
(4) records, the disclosure of which could cause commercial injury to, or confer a
competitive advantage upon a potential or actual competitor of, a commercial project entity as
defined in Subsection 
11-13-103
(4);
(5) test questions and answers to be used in future license, certification, registration,
employment, or academic examinations;
(6) records, the disclosure of which would impair governmental procurement
proceedings or give an unfair advantage to any person proposing to enter into a contract or
agreement with a governmental entity, except, subject to Subsections (1) and (2), that this
Subsection (6) does not restrict the right of a person to have access to, after the contract or
grant has been awarded and signed by all parties, a bid, proposal, application, or other
information submitted to or by a governmental entity in response to:
(a) an invitation for bids;
(b) a request for proposals;
(c) a request for quotes;
(d) a grant; or
(e) other similar document;
(7) information submitted to or by a governmental entity in response to a request for
information, except, subject to Subsections (1) and (2), that this Subsection (7) does not restrict
the right of a person to have access to the information, after:
(a) a contract directly relating to the subject of the request for information has been
awarded and signed by all parties; or
(b) (i) a final determination is made not to enter into a contract that relates to the
subject of the request for information; and
(ii) at least two years have passed after the day on which the request for information is
issued;
(8) records that would identify real property or the appraisal or estimated value of real
or personal property, including intellectual property, under consideration for public acquisition
before any rights to the property are acquired unless:
(a) public interest in obtaining access to the information is greater than or equal to the
governmental entity's need to acquire the property on the best terms possible;
(b) the information has already been disclosed to persons not employed by or under a
duty of confidentiality to the entity;
(c) in the case of records that would identify property, potential sellers of the described
property have already learned of the governmental entity's plans to acquire the property;
(d) in the case of records that would identify the appraisal or estimated value of
property, the potential sellers have already learned of the governmental entity's estimated value
of the property; or
(e) the property under consideration for public acquisition is a single family residence
and the governmental entity seeking to acquire the property has initiated negotiations to acquire
the property as required under Section 
78B-6-505
;
(9) records prepared in contemplation of sale, exchange, lease, rental, or other
compensated transaction of real or personal property including intellectual property, which, if
disclosed prior to completion of the transaction, would reveal the appraisal or estimated value
of the subject property, unless:
(a) the public interest in access is greater than or equal to the interests in restricting
access, including the governmental entity's interest in maximizing the financial benefit of the
transaction; or
(b) when prepared by or on behalf of a governmental entity, appraisals or estimates of
the value of the subject property have already been disclosed to persons not employed by or
under a duty of confidentiality to the entity;
(10) records created or maintained for civil, criminal, or administrative enforcement
purposes or audit purposes, or for discipline, licensing, certification, or registration purposes, if
release of the records:
(a) reasonably could be expected to interfere with investigations undertaken for
enforcement, discipline, licensing, certification, or registration purposes;
(b) reasonably could be expected to interfere with audits, disciplinary, or enforcement
proceedings;
(c) would create a danger of depriving a person of a right to a fair trial or impartial
hearing;
(d) reasonably could be expected to disclose the identity of a source who is not
generally known outside of government and, in the case of a record compiled in the course of
an investigation, disclose information furnished by a source not generally known outside of
government if disclosure would compromise the source; or
(e) reasonably could be expected to disclose investigative or audit techniques,
procedures, policies, or orders not generally known outside of government if disclosure would
interfere with enforcement or audit efforts;
(11) records the disclosure of which would jeopardize the life or safety of an
individual;
(12) records the disclosure of which would jeopardize the security of governmental
property, governmental programs, or governmental recordkeeping systems from damage, theft,
or other appropriation or use contrary to law or public policy;
(13) records that, if disclosed, would jeopardize the security or safety of a correctional
facility, or records relating to incarceration, treatment, probation, or parole, that would interfere
with the control and supervision of an offender's incarceration, treatment, probation, or parole;
(14) records that, if disclosed, would reveal recommendations made to the Board of
Pardons and Parole by an employee of or contractor for the Department of Corrections, the
Board of Pardons and Parole, or the Department of Human Services that are based on the
employee's or contractor's supervision, diagnosis, or treatment of any person within the board's
jurisdiction;
(15) records and audit workpapers that identify audit, collection, and operational
procedures and methods used by the State Tax Commission, if disclosure would interfere with
audits or collections;
(16) records of a governmental audit agency relating to an ongoing or planned audit
until the final audit is released;
(17) records that are subject to the attorney client privilege;
(18) records prepared for or by an attorney, consultant, surety, indemnitor, insurer,
employee, or agent of a governmental entity for, or in anticipation of, litigation or a judicial,
quasi-judicial, or administrative proceeding;
(19) (a) (i) personal files of a state legislator, including personal correspondence to or
from a member of the Legislature; and
(ii) notwithstanding Subsection (19)(a)(i), correspondence that gives notice of
legislative action or policy may not be classified as protected under this section; and
(b) (i) an internal communication that is part of the deliberative process in connection
with the preparation of legislation between:
(A) members of a legislative body;
(B) a member of a legislative body and a member of the legislative body's staff; or
(C) members of a legislative body's staff; and
(ii) notwithstanding Subsection (19)(b)(i), a communication that gives notice of
legislative action or policy may not be classified as protected under this section;
(20) (a) records in the custody or control of the Office of Legislative Research and
General Counsel, that, if disclosed, would reveal a particular legislator's contemplated
legislation or contemplated course of action before the legislator has elected to support the
legislation or course of action, or made the legislation or course of action public; and
(b) notwithstanding Subsection (20)(a), the form to request legislation submitted to the
Office of Legislative Research and General Counsel is a public document unless a legislator
asks that the records requesting the legislation be maintained as protected records until such
time as the legislator elects to make the legislation or course of action public;
(21) research requests from legislators to the Office of Legislative Research and
General Counsel or the Office of the Legislative Fiscal Analyst and research findings prepared
in response to these requests;
(22) drafts, unless otherwise classified as public;
(23) records concerning a governmental entity's strategy about:
(a) collective bargaining; or
(b) imminent or pending litigation;
(24) records of investigations of loss occurrences and analyses of loss occurrences that
may be covered by the Risk Management Fund, the Employers' Reinsurance Fund, the
Uninsured Employers' Fund, or similar divisions in other governmental entities;
(25) records, other than personnel evaluations, that contain a personal recommendation
concerning an individual if disclosure would constitute a clearly unwarranted invasion of
personal privacy, or disclosure is not in the public interest;
(26) records that reveal the location of historic, prehistoric, paleontological, or
biological resources that if known would jeopardize the security of those resources or of
valuable historic, scientific, educational, or cultural information;
(27) records of independent state agencies if the disclosure of the records would
conflict with the fiduciary obligations of the agency;
(28) records of an institution within the state system of higher education defined in
Section 
53B-1-102
 regarding tenure evaluations, appointments, applications for admissions,
retention decisions, and promotions, which could be properly discussed in a meeting closed in
accordance with Title 52, Chapter 4, Open and Public Meetings Act, provided that records of
the final decisions about tenure, appointments, retention, promotions, or those students
admitted, may not be classified as protected under this section;
(29) records of the governor's office, including budget recommendations, legislative
proposals, and policy statements, that if disclosed would reveal the governor's contemplated
policies or contemplated courses of action before the governor has implemented or rejected
those policies or courses of action or made them public;
(30) records of the Office of the Legislative Fiscal Analyst relating to budget analysis,
revenue estimates, and fiscal notes of proposed legislation before issuance of the final
recommendations in these areas;
(31) records provided by the United States or by a government entity outside the state
that are given to the governmental entity with a requirement that they be managed as protected
records if the providing entity certifies that the record would not be subject to public disclosure
if retained by it;
(32) transcripts, minutes, or reports of the closed portion of a meeting of a public body
except as provided in Section 
52-4-206
;
(33) records that would reveal the contents of settlement negotiations but not including
final settlements or empirical data to the extent that they are not otherwise exempt from
disclosure;
(34) memoranda prepared by staff and used in the decision-making process by an
administrative law judge, a member of the Board of Pardons and Parole, or a member of any
other body charged by law with performing a quasi-judicial function;
(35) records that would reveal negotiations regarding assistance or incentives offered
by or requested from a governmental entity for the purpose of encouraging a person to expand
or locate a business in Utah, but only if disclosure would result in actual economic harm to the
person or place the governmental entity at a competitive disadvantage, but this section may not
be used to restrict access to a record evidencing a final contract;
(36) materials to which access must be limited for purposes of securing or maintaining
the governmental entity's proprietary protection of intellectual property rights including patents,
copyrights, and trade secrets;
(37) the name of a donor or a prospective donor to a governmental entity, including an
institution within the state system of higher education defined in Section 
53B-1-102
, and other
information concerning the donation that could reasonably be expected to reveal the identity of
the donor, provided that:
(a) the donor requests anonymity in writing;
(b) any terms, conditions, restrictions, or privileges relating to the donation may not be
classified protected by the governmental entity under this Subsection (37); and
(c) except for an institution within the state system of higher education defined in
Section 
53B-1-102
, the governmental unit to which the donation is made is primarily engaged
in educational, charitable, or artistic endeavors, and has no regulatory or legislative authority
over the donor, a member of the donor's immediate family, or any entity owned or controlled
by the donor or the donor's immediate family;
(38) accident reports, except as provided in Sections 
41-6a-404
, 
41-12a-202
, and
73-18-13
;
(39) a notification of workers' compensation insurance coverage described in Section
34A-2-205
;
(40) (a) the following records of an institution within the state system of higher
education defined in Section 
53B-1-102
, which have been developed, discovered, disclosed to,
or received by or on behalf of faculty, staff, employees, or students of the institution:
(i) unpublished lecture notes;
(ii) unpublished notes, data, and information:
(A) relating to research; and
(B) of:
(I) the institution within the state system of higher education defined in Section
53B-1-102
; or
(II) a sponsor of sponsored research;
(iii) unpublished manuscripts;
(iv) creative works in process;
(v) scholarly correspondence; and
(vi) confidential information contained in research proposals;
(b) Subsection (40)(a) may not be construed to prohibit disclosure of public
information required pursuant to Subsection 
53B-16-302
(2)(a) or (b); and
(c) Subsection (40)(a) may not be construed to affect the ownership of a record;
(41) (a) records in the custody or control of the Office of Legislative Auditor General
that would reveal the name of a particular legislator who requests a legislative audit prior to the
date that audit is completed and made public; and
(b) notwithstanding Subsection (41)(a), a request for a legislative audit submitted to the
Office of the Legislative Auditor General is a public document unless the legislator asks that
the records in the custody or control of the Office of Legislative Auditor General that would
reveal the name of a particular legislator who requests a legislative audit be maintained as
protected records until the audit is completed and made public;
(42) records that provide detail as to the location of an explosive, including a map or
other document that indicates the location of:
(a) a production facility; or
(b) a magazine;
(43) information:
(a) contained in the statewide database of the Division of Aging and Adult Services
created by Section 
62A-3-311.1
; or
(b) received or maintained in relation to the Identity Theft Reporting Information
System (IRIS) established under Section 
67-5-22
;
(44) information contained in the Management Information System and Licensing
Information System described in Title 62A, Chapter 4a, Child and Family Services;
(45) information regarding National Guard operations or activities in support of the
National Guard's federal mission;
(46) records provided by any pawn or secondhand business to a law enforcement
agency or to the central database in compliance with Title 13, Chapter 32a, Pawnshop and
Secondhand Merchandise Transaction Information Act;
(47) information regarding food security, risk, and vulnerability assessments performed
by the Department of Agriculture and Food;
(48) except to the extent that the record is exempt from this chapter pursuant to Section
63G-2-106
, records related to an emergency plan or program, a copy of which is provided to or
prepared or maintained by the Division of Emergency Management, and the disclosure of
which would jeopardize:
(a) the safety of the general public; or
(b) the security of:
(i) governmental property;
(ii) governmental programs; or
(iii) the property of a private person who provides the Division of Emergency
Management information;
(49) records of the Department of Agriculture and Food that provides for the
identification, tracing, or control of livestock diseases, including any program established under
Title 4, Chapter 24, Utah Livestock Brand and Anti-Theft Act, or Title 4, Chapter 31, Control
of Animal Disease;
(50) as provided in Section 
26-39-501
:
(a) information or records held by the Department of Health related to a complaint
regarding a child care program or residential child care which the department is unable to
substantiate; and
(b) information or records related to a complaint received by the Department of Health
from an anonymous complainant regarding a child care program or residential child care;
(51) unless otherwise classified as public under Section 
63G-2-301
 and except as
provided under Section 
41-1a-116
, an individual's home address, home telephone number, or
personal mobile phone number, if:
(a) the individual is required to provide the information in order to comply with a law,
ordinance, rule, or order of a government entity; and
(b) the subject of the record has a reasonable expectation that this information will be
kept confidential due to:
(i) the nature of the law, ordinance, rule, or order; and
(ii) the individual complying with the law, ordinance, rule, or order;
(52) the name, home address, work addresses, and telephone numbers of an individual
that is engaged in, or that provides goods or services for, medical or scientific research that is:
(a) conducted within the state system of higher education, as defined in Section
53B-1-102
; and
(b) conducted using animals;
(53) an initial proposal under Title 63N, Chapter 13, Part 2, Government Procurement
Private Proposal Program, to the extent not made public by rules made under that chapter;
(54) in accordance with Section 
78A-12-203
, any record of the Judicial Performance
Evaluation Commission concerning an individual commissioner's vote on whether or not to
recommend that the voters retain a judge including information disclosed under Subsection
78A-12-203
(5)(e);
(55) information collected and a report prepared by the Judicial Performance
Evaluation Commission concerning a judge, unless Section 
20A-7-702
 or Title 78A, Chapter
12, Judicial Performance Evaluation Commission Act, requires disclosure of, or makes public,
the information or report;
(56) records contained in the Management Information System created in Section
62A-4a-1003
;
(57) records provided or received by the Public Lands Policy Coordinating Office in
furtherance of any contract or other agreement made in accordance with Section 
63J-4-603
;
(58) information requested by and provided to the 911 Division under Section
63H-7a-302
;
(59) in accordance with Section 
73-10-33
:
(a) a management plan for a water conveyance facility in the possession of the Division
of Water Resources or the Board of Water Resources; or
(b) an outline of an emergency response plan in possession of the state or a county or
municipality;
(60) the following records in the custody or control of the Office of Inspector General
of Medicaid Services, created in Section 
63A-13-201
:
(a) records that would disclose information relating to allegations of personal
misconduct, gross mismanagement, or illegal activity of a person if the information or
allegation cannot be corroborated by the Office of Inspector General of Medicaid Services
through other documents or evidence, and the records relating to the allegation are not relied
upon by the Office of Inspector General of Medicaid Services in preparing a final investigation
report or final audit report;
(b) records and audit workpapers to the extent they would disclose the identity of a
person who, during the course of an investigation or audit, communicated the existence of any
Medicaid fraud, waste, or abuse, or a violation or suspected violation of a law, rule, or
regulation adopted under the laws of this state, a political subdivision of the state, or any
recognized entity of the United States, if the information was disclosed on the condition that
the identity of the person be protected;
(c) before the time that an investigation or audit is completed and the final
investigation or final audit report is released, records or drafts circulated to a person who is not
an employee or head of a governmental entity for the person's response or information;
(d) records that would disclose an outline or part of any investigation, audit survey
plan, or audit program; or
(e) requests for an investigation or audit, if disclosure would risk circumvention of an
investigation or audit;
(61) records that reveal methods used by the Office of Inspector General of Medicaid
Services, the fraud unit, or the Department of Health, to discover Medicaid fraud, waste, or
abuse;
(62) information provided to the Department of Health or the Division of Occupational
and Professional Licensing under Subsection 
58-68-304
(3) or (4);
(63) a record described in Section 
63G-12-210
;
(64) captured plate data that is obtained through an automatic license plate reader
system used by a governmental entity as authorized in Section 
41-6a-2003
;
(65) any record in the custody of the Utah Office for Victims of Crime relating to a
victim, including:
(a) a victim's application or request for benefits;
(b) a victim's receipt or denial of benefits; and
(c) any administrative notes or records made or created for the purpose of, or used to,
evaluate or communicate a victim's eligibility for or denial of benefits from the Crime Victim
Reparations Fund;
(66) an audio or video recording created by a body-worn camera, as that term is
defined in Section 
77-7a-103
, that records sound or images inside a hospital or health care
facility as those terms are defined in Section 
78B-3-403
, inside a clinic of a health care
provider, as that term is defined in Section 
78B-3-403
, or inside a human service program as
that term is defined in Subsection 
62A-2-101
(19)(a)(vi), except for recordings that:
(a) depict the commission of an alleged crime;
(b) record any encounter between a law enforcement officer and a person that results in
death or bodily injury, or includes an instance when an officer fires a weapon;
(c) record any encounter that is the subject of a complaint or a legal proceeding against
a law enforcement officer or law enforcement agency;
(d) contain an officer involved critical incident as defined in Subsection
76-2-408
(1)(d); or
(e) have been requested for reclassification as a public record by a subject or
authorized agent of a subject featured in the recording; [
and
] 
(67) a record pertaining to the search process for a president of an institution of higher
education described in Section 
53B-2-102
, except for application materials for a publicly
announced finalist[
.
]
; and
(68) work papers as defined in Section 
31A-2-204.
Section 51. Section 
72-6-107.5
 is amended to read:
72-6-107.5.
Construction of improvements of highway -- Contracts -- Health
insurance coverage.
(1) [
For purposes of
] 
As used in
 this section:
(a) "Aggregate" means the sum of all contracts, change orders, and modifications
related to a single project.
(b) "Change order" means the same as that term is defined in Section 
63G-6a-103
.
[
(a)
] 
(c)
 "Employee" means
, as defined in Section 
34A-2-104
,
 an "employee,"
"worker," or "operative" [
as defined in Section 
34A-2-104
] who:
(i) works at least 30 hours per calendar week; and
(ii) meets employer eligibility waiting requirements for health care insurance
,
 which
may not exceed the first day of the calendar month following 60 days [
from the date of hire
]
after the day on which the individual is hired
.
[
(b)
] 
(d)
 "Health benefit plan" means the same as that term is defined in Section
31A-1-301
.
[
(c)
] 
(e)
 "Qualified health insurance coverage" means the same as that term is defined
in Section 
26-40-115
.
[
(d)
] 
(f)
 "Subcontractor" means the same as that term is defined in Section 
63A-5-208
.
[
(2) (a) Except as provided in Subsection (3), this section applies to contracts entered
into by the department on or after July 1, 2009, for construction or design of highways and to a
prime contractor or to a subcontractor in accordance with Subsection (2)(b).
]
[
(b) (i) A prime contractor is subject to this section if the prime contract is in the
amount of $2,000,000 or greater at the original execution of the contract.
]
[
(ii) A subcontractor is subject to this section if a subcontract is in the amount of
$1,000,000 or greater at the original execution of the contract.
]
[
(3) This section does not apply if:
]
(2) (a) Except as provided in Subsection (3), the requirements of this section apply to:
(a) a contractor of a design or construction contract entered into by the department on
or after July 1, 2009, if the prime contract is in an aggregate amount equal to or greater than
$2,000,000; and
(b) a subcontractor of a contractor of a design or construction contract entered into by
the department on or after July 1, 2009, if the subcontract is in an aggregate amount equal to or
greater than $1,000,000.
(3) The requirements of this section do not apply to a contractor or subcontractor
described in Subsection (2) if:
(a) the application of this section jeopardizes the receipt of federal funds;
(b) the contract is a sole source contract; or
(c) the contract is an emergency procurement.
[
(4) (a) This section does not apply to a change order as defined in Section
63G-6a-103
, or a modification to a contract, when the contract does not meet the initial
threshold required by Subsection (2).
]
[
(b)
] 
(4)
 A person [
who
] 
that
 intentionally uses change orders [
or
]
,
 contract
modifications
, or multiple contracts
 to circumvent the requirements of [
Subsection (2)
] 
this
section
 is guilty of an infraction.
(5) (a) A contractor subject to [
Subsection (2)
] 
the requirements of this section
 shall
demonstrate to the department that the contractor has and will maintain an offer of qualified
health insurance coverage for the contractor's employees and the employees' dependents during
the duration of the contract[
.
] 
by submitting to the department a written statement that:
[
(b) If a subcontractor of the contractor is subject to Subsection (2), the contractor
shall:
]
(i) the contractor offers qualified health insurance coverage that complies with Section
26-40-115
;
(ii) is from:
(A) an actuary selected by the contractor or the contractor's insurer; or
(B) an underwriter who is responsible for developing the employer group's premium
rates; and
(iii) was created within one year before the day on which the statement is submitted.
(b) A contractor that is subject to the requirements of this section shall:
(i) place a requirement in [
the subcontract that the subcontractor
] 
each of the
contractor's subcontracts that a subcontractor that is subject to the requirements of this section
shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
employees and the employees' dependents during the duration of the subcontract; and
[
(ii) certify to the department that the subcontractor has and will maintain an offer of
qualified health insurance coverage for the subcontractor's employees and the employees'
dependents during the duration of the prime contract.
]
(ii) obtain from a subcontractor that is subject to the requirements of this section a
written statement that:
(A) the subcontractor offers qualified health insurance coverage that complies with
Section 
26-40-115
;
(B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
underwriter who is responsible for developing the employer group's premium rates; and
(C) was created within one year before the day on which the contractor obtains the
statement.
(c) (i) (A) A contractor [
who fails to meet the requirements of
] 
that fails to maintain an
offer of qualified health insurance coverage described in
 Subsection (5)(a) during the duration
of the contract is subject to penalties in accordance with administrative rules adopted by the
department under Subsection (6).
(B) A contractor is not subject to penalties for the failure of a subcontractor to [
meet
the requirements of
] 
obtain and maintain an offer of qualified health insurance coverage
described in
 Subsection (5)(b)
(i)
.
(ii) (A) A subcontractor [
who fails to meet the requirements of
] 
that fails to obtain and
maintain an offer of qualified health insurance coverage described in
 Subsection (5)(b) during
the duration of the [
contract
] 
subcontract
 is subject to penalties in accordance with
administrative rules adopted by the department under Subsection (6).
(B) A subcontractor is not subject to penalties for the failure of a contractor to [
meet
the requirements of
] 
maintain an offer of qualified health insurance coverage described in
Subsection (5)(a).
(6) The department shall adopt administrative rules:
(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(b) in coordination with:
(i) the Department of Environmental Quality in accordance with Section 
19-1-206
;
(ii) the Department of Natural Resources in accordance with Section 
79-2-404
;
(iii) the State Building Board in accordance with Section [
63A-5-205
] 
63A-5-205.5
;
(iv) the State Capitol Preservation Board in accordance with Section 
63C-9-403
;
(v) a public transit district in accordance with Section 
17B-2a-818.5
; and
(vi) the Legislature's Administrative Rules Review Committee; and
(c) that establish:
(i) the requirements and procedures a contractor [
must
] 
and a subcontractor shall
follow to demonstrate [
to the department
] compliance with this section [
that shall include
]
,
including
:
[
(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
time of the execution of each initial contract described in Subsection (2)(b);
]
[
(B) that the contractor's
]
(A) that a contractor or subcontractor's
 compliance 
with this section
 is subject to an
audit by the department or the Office of the Legislative Auditor General; [
and
]
[
(C) that the actuarially equivalent determination required for qualified health
insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
department or division with a written statement of actuarial equivalency, which is no more than
one year old, regarding the contractor's offer of qualified health coverage from an actuary
selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
developing the employer group's premium rates;
]
(B) that a contractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(a); and
(C) that a subcontractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(b)(ii);
(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
violates the provisions of this section, which may include:
(A) a three-month suspension of the contractor or subcontractor from entering into
future contracts with the state upon the first violation;
(B) a six-month suspension of the contractor or subcontractor from entering into future
contracts with the state upon the second violation;
(C) an action for debarment of the contractor or subcontractor in accordance with
Section 
63G-6a-904
 upon the third or subsequent violation; and
(D) monetary penalties which may not exceed 50% of the amount necessary to
purchase qualified health insurance coverage for an employee and a dependent of the employee
of the contractor or subcontractor who was not offered qualified health insurance coverage
during the duration of the contract; and
(iii) a website on which the department shall post the commercially equivalent
benchmark, for the qualified health insurance coverage identified in Subsection (1)[
(c)
]
(e)
, that
is provided by the Department of Health, in accordance with Subsection 
26-40-115
(2).
(7) (a) (i) In addition to the penalties imposed under Subsection (6)
(c)(ii)
, a contractor
or subcontractor who intentionally violates the provisions of this section [
shall be
] 
is
 liable to
the employee for health care costs that would have been covered by qualified health insurance
coverage.
(ii) An employer has an affirmative defense to a cause of action under Subsection
(7)(a)(i) if:
(A) the employer relied in good faith on a written statement [
of actuarial equivalency
provided by:
] 
described in Subsection (5)(a) or (5)(b)(ii); or
[
(I) an actuary; or
]
[
(II) an underwriter who is responsible for developing the employer group's premium
rates; or
]
(B) the department determines that compliance with this section is not required under
the provisions of Subsection (3) [
or (4)
].
(b) An employee has a private right of action only against the employee's employer to
enforce the provisions of this Subsection (7).
(8) Any penalties imposed and collected under this section shall be deposited into the
Medicaid Restricted Account created in Section 
26-18-402
.
(9) The failure of a contractor or subcontractor to provide qualified health insurance
coverage as required by this section:
(a) may not be the basis for a protest or other action from a prospective bidder, offeror,
or contractor under
:
(i)
 Section 
63G-6a-1602
;
 or
(ii)
 any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
(b) may not be used by the procurement entity or a prospective bidder, offeror, or
contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
or construction.
Section 52. Section 
79-2-404
 is amended to read:
79-2-404.
Contracting powers of department -- Health insurance coverage.
(1) [
For purposes of
] 
As used in
 this section:
(a) "Aggregate" means the sum of all contracts, change orders, and modifications
related to a single project.
(b) "Change order" means the same as that term is defined in Section 
63G-6a-103
.
[
(a)
] 
(c)
 "Employee" means
, as defined in Section 
34A-2-104
,
 an "employee,"
"worker," or "operative" [
as defined in Section 
34A-2-104
] who:
(i) works at least 30 hours per calendar week; and
(ii) meets employer eligibility waiting requirements for health care insurance
,
 which
may not exceed the first day of the calendar month following 60 days [
from the date of hire
]
after the day on which the individual is hired
.
[
(b)
] 
(d)
 "Health benefit plan" means the same as that term is defined in Section
31A-1-301
.
[
(c)
] 
(e)
 "Qualified health insurance coverage" means the same as that term is defined
in Section 
26-40-115
.
[
(d)
] 
(f)
 "Subcontractor" means the same as that term is defined in Section 
63A-5-208
.
[
(2) (a) Except as provided in Subsection (3), this section applies a design or
construction contract entered into by, or delegated to, the department or a division, board, or
council of the department on or after July 1, 2009, and to a prime contractor or to a
subcontractor in accordance with Subsection (2)(b).
]
[
(b) (i) A prime contractor is subject to this section if the prime contract is in the
amount of $2,000,000 or greater at the original execution of the contract.
]
[
(ii) A subcontractor is subject to this section if a subcontract is in the amount of
$1,000,000 or greater at the original execution of the contract.
]
(2) Except as provided in Subsection (3), the requirements of this section apply to:
(a) a contractor of a design or construction contract entered into by, or delegated to, the
department or a division, board, or council of the department on or after July 1, 2009, if the
prime contract is in an aggregate amount equal to or greater than $2,000,000; and
(b) a subcontractor of a contractor of a design or construction contract entered into by,
or delegated to, the department or a division, board, or council of the department on or after
July 1, 2009, if the subcontract is in an aggregate amount equal to or greater than $1,000,000.
(3) This section does not apply to contracts entered into by the department or a
division, board, or council of the department if:
(a) the application of this section jeopardizes the receipt of federal funds;
(b) the contract or agreement is between:
(i) the department or a division, board, or council of the department; and
(ii) (A) another agency of the state;
(B) the federal government;
(C) another state;
(D) an interstate agency;
(E) a political subdivision of this state; or
(F) a political subdivision of another state; or
(c) the contract or agreement is:
(i) for the purpose of disbursing grants or loans authorized by statute;
(ii) a sole source contract; or
(iii) an emergency procurement.
[
(4) (a) This section does not apply to a change order as defined in Section
63G-6a-103
, or a modification to a contract, when the contract does not meet the initial
threshold required by Subsection (2).
]
[
(b)
] 
(4)
 A person [
who
] 
that
 intentionally uses change orders [
or
]
,
 contract
modifications
, or multiple contracts
 to circumvent the requirements of [
Subsection (2)
] 
this
section
 is guilty of an infraction.
(5) (a) A contractor subject to [
Subsection (2)(b)(i)
] 
the requirements of this section
shall demonstrate to the department that the contractor has and will maintain an offer of
qualified health insurance coverage for the contractor's employees and the employees'
dependents during the duration of the contract[
.
] 
by submitting to the department a written
statement that:
[
(b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
shall:
]
(i) the contractor offers qualified health insurance coverage that complies with Section
26-40-115
;
(ii) is from:
(A) an actuary selected by the contractor or the contractor's insurer; or
(B) an underwriter who is responsible for developing the employer group's premium
rates; and
(iii) was created within one year before the day on which the statement is submitted.
(b) A contractor that is subject to the requirements of this section shall:
(i) place a requirement in [
the subcontract that the subcontractor
] 
each of the
contractor's subcontracts that a subcontractor that is subject to the requirements of this section
shall obtain and maintain an offer of qualified health insurance coverage for the subcontractor's
employees and the employees' [
dependants
] 
dependents
 during the duration of the subcontract;
and
[
(ii) certify to the department that the subcontractor has and will maintain an offer of
qualified health insurance coverage for the subcontractor's employees and the employees'
dependents during the duration of the prime contract.
]
(ii) obtain from a subcontractor that is subject to the requirements of this section a
written statement that:
(A) the subcontractor offers qualified health insurance coverage that complies with
Section 
26-40-115
;
(B) is from an actuary selected by the subcontractor or the subcontractor's insurer, or an
underwriter who is responsible for developing the employer group's premium rates; and
(C) was created within one year before the day on which the contractor obtains the
statement.
(c) (i) (A) A contractor [
who fails to meet the requirements of
] 
that fails to maintain an
offer of qualified health insurance coverage described in
 Subsection (5)(a) during the duration
of the contract is subject to penalties in accordance with administrative rules adopted by the
department under Subsection (6).
(B) A contractor is not subject to penalties for the failure of a subcontractor to [
meet
the requirements of
] 
obtain and maintain an offer of qualified health insurance coverage
described in
 Subsection (5)(b)
(i)
.
(ii) (A) A subcontractor [
who fails to meet the requirements of
] 
that fails to obtain and
maintain an offer of qualified health insurance coverage described in
 Subsection (5)(b) during
the duration of the [
contract
] 
subcontract
 is subject to penalties in accordance with
administrative rules adopted by the department under Subsection (6).
(B) A subcontractor is not subject to penalties for the failure of a contractor to [
meet
the requirements of
] 
maintain an offer of qualified health insurance coverage described in
Subsection (5)(a).
(6) The department shall adopt administrative rules:
(a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(b) in coordination with:
(i) the Department of Environmental Quality in accordance with Section 
19-1-206
;
(ii) a public transit district in accordance with Section 
17B-2a-818.5
;
(iii) the State Building Board in accordance with Section [
63A-5-205
] 
63A-5-205.5
;
(iv) the State Capitol Preservation Board in accordance with Section 
63C-9-403
;
(v) the Department of Transportation in accordance with Section 
72-6-107.5
; and
(vi) the Legislature's Administrative Rules Review Committee; and
(c) that establish:
(i) the requirements and procedures a contractor [
must
] 
and a subcontractor shall
follow to demonstrate compliance with this section [
to the department that shall include
]
,
including
:
[
(A) that a contractor shall demonstrate compliance with Subsection (5)(a) or (b) at the
time of the execution of each initial contract described in Subsection (2)(b);
]
[
(B) that the contractor's
]
(A) that a contractor or subcontractor's
 compliance 
with this section
 is subject to an
audit by the department or the Office of the Legislative Auditor General; [
and
]
[
(C) that the actuarially equivalent determination required for qualified health
insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
department or division with a written statement of actuarial equivalency, which is no more than
one year old, regarding the contractor's offer of qualified health coverage from an actuary
selected by the contractor or the contractor's insurer, or an underwriter who is responsible for
developing the employer group's premium rates;
]
(B) that a contractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(a); and
(C) that a subcontractor that is subject to the requirements of this section shall obtain a
written statement described in Subsection (5)(b)(ii);
(ii) the penalties that may be imposed if a contractor or subcontractor intentionally
violates the provisions of this section, which may include:
(A) a three-month suspension of the contractor or subcontractor from entering into
future contracts with the state upon the first violation;
(B) a six-month suspension of the contractor or subcontractor from entering into future
contracts with the state upon the second violation;
(C) an action for debarment of the contractor or subcontractor in accordance with
Section 
63G-6a-904
 upon the third or subsequent violation; and
(D) monetary penalties which may not exceed 50% of the amount necessary to
purchase qualified health insurance coverage for an employee and a dependent of an employee
of the contractor or subcontractor who was not offered qualified health insurance coverage
during the duration of the contract; and
(iii) a website on which the department shall post the commercially equivalent
benchmark, for the qualified health insurance coverage identified in Subsection (1)[
(c)
]
(e)
, 
provided by the Department of Health, in accordance with Subsection 
26-40-115
(2).
(7) (a) (i) In addition to the penalties imposed under Subsection (6)
(c)(ii)
, a contractor
or subcontractor who intentionally violates the provisions of this section [
shall be
] 
is
 liable to
the employee for health care costs that would have been covered by qualified health insurance
coverage.
(ii) An employer has an affirmative defense to a cause of action under Subsection
(7)(a)(i) if:
(A) the employer relied in good faith on a written statement [
of actuarial equivalency
provided by:
] 
described in Subsection (5)(a) or (5)(b)(ii); or
[
(I) an actuary; or
]
[
(II) an underwriter who is responsible for developing the employer group's premium
rates; or
]
(B) the department determines that compliance with this section is not required under
the provisions of Subsection (3) [
or (4)
].
(b) An employee has a private right of action only against the employee's employer to
enforce the provisions of this Subsection (7).
(8) Any penalties imposed and collected under this section shall be deposited into the
Medicaid Restricted Account created in Section 
26-18-402
.
(9) The failure of a contractor or subcontractor to provide qualified health insurance
coverage as required by this section:
(a) may not be the basis for a protest or other action from a prospective bidder, offeror,
or contractor under
:
(i)
 Section 
63G-6a-1602
;
 or
(ii)
 any other provision in Title 63G, Chapter 6a, Utah Procurement Code; and
(b) may not be used by the procurement entity or a prospective bidder, offeror, or
contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
or construction.
Section 53. 
Repealer.
This bill repeals:
Section 
31A-22-722.5
,
Mini-COBRA election -- American Recovery and
Reinvestment Act.
Section 
31A-30-209
,
Insurance producers and the Health Insurance Exchange.