Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 410 Second Substitute (2023GS)

Sponsor

Rep. Dunnigan, J.

Final action

Governor Signed 3/14/2023

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• makes changes to provisions of the Insurance Code to:
• amend what is considered protected work papers when the commissioner conducts an examination;
• amend requirements for service of process;
• increase the amount of the annual appropriation for the Captive Insurance Division;
• amend the required process for insurers to file certain documents;
• specify the filing requirements for insurers to submit annual statements with the National Association of Insurance Commissioners;
• prohibit insurance credit when a risk is ceded to an out-of-state captive;
• eliminate certain requirements for a title insurance licensee to submit certain filings;
• enacts provisions requiring certain reporting for insurers that offer large employer health benefit plans;
• add a limited line insurance producer license for pet insurance;
• permit the Department of Insurance (department) to take action against licensees if the licensee enters a plea in abeyance to certain crimes;
• clarify provisions related to title insurance companies' deposit of trust money in federally-insured depository institutions in Utah;
• eliminate the requirement that the Title and Escrow Commission (commission) establish in rule an amount of costs and expenses that are covered by the annual assessment on agency title insurance producers and title insurers (annual assessment);

Every vote on this bill

Bill text

INSURANCE AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: James A. Dunnigan
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill amends the Insurance Code, the Public Employees' Benefit and Insurance
Program Act, and related provisions.
Highlighted Provisions:
This bill:
▸ makes changes to provisions of the Insurance Code to:
• amend what is considered protected work papers when the commissioner
conducts an examination;
• amend requirements for service of process;
• increase the amount of the annual appropriation for the Captive Insurance
Division;
• amend the required process for insurers to file certain documents;
• specify the filing requirements for insurers to submit annual statements with the
National Association of Insurance Commissioners;
• prohibit insurance credit when a risk is ceded to an out-of-state captive;
• eliminate certain requirements for a title insurance licensee to submit certain
filings;
• enacts provisions requiring certain reporting for insurers that offer large
employer health benefit plans;
• add a limited line insurance producer license for pet insurance;
• permit the Department of Insurance (department) to take action against licensees
if the licensee enters a plea in abeyance to certain crimes;
• clarify provisions related to title insurance companies' deposit of trust money in
federally-insured depository institutions in Utah;
• eliminate the requirement that the Title and Escrow Commission (commission)
establish in rule an amount of costs and expenses that are covered by the annual
assessment on agency title insurance producers and title insurers (annual
assessment);
• allow the commission to approve costs and expenses covered by the annual
assessment for the prior fiscal year;
• eliminate the limitation on the amount of costs covered by the annual
assessment;
• create the State Mandated Insurer Payments Restricted Account (account) and
provide that appropriations from the account are nonlapsing;
• amend requirements for the method of reporting insurance fraud;
• eliminate the requirement that an association of captives be in continuous
existence for at least one year;
• change requirements for a captive insurer's paid-in capital;
• prohibit insuring an award of punitive damages against a third party; and
• amend the requirements for pure captive insurance companies to which the
commissioner issues a certificate of authority;
▸ amends provisions related to certain recommendations for benefit and rate
adjustments for state employees that the Public Employees' Benefit and Insurance
Program is required to submit;
▸ makes technical and conforming changes; and
▸ defines terms.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-2-204
, as last amended by Laws of Utah 2018, Chapter 319
31A-2-310
, as last amended by Laws of Utah 1995, Chapter 20
31A-3-304
, as last amended by Laws of Utah 2019, Chapter 193
31A-4-113.5
, as last amended by Laws of Utah 2003, Chapter 252
31A-16-103
, as last amended by Laws of Utah 2018, Chapter 319
31A-17-404
, as last amended by Laws of Utah 2021, Chapter 252
31A-19a-209
, as last amended by Laws of Utah 2015, Chapters 312, 330
31A-23a-106
, as last amended by Laws of Utah 2015, Chapter 330
31A-23a-111
, as last amended by Laws of Utah 2022, Chapter 198
31A-23a-406
, as last amended by Laws of Utah 2021, Chapter 252
31A-23a-409
, as last amended by Laws of Utah 2021, Chapter 252
31A-23a-415
, as last amended by Laws of Utah 2020, Chapter 32
31A-23b-401
, as last amended by Laws of Utah 2020, Chapter 32
31A-25-208
, as last amended by Laws of Utah 2020, Chapter 32
31A-26-213
, as last amended by Laws of Utah 2020, Chapter 32
31A-30-118
, as last amended by Laws of Utah 2020, Chapter 32
31A-31-110
, as last amended by Laws of Utah 2008, Chapter 150
31A-35-504
, as last amended by Laws of Utah 2021, Second Special Session, Chapter 4
31A-37-102
, as last amended by Laws of Utah 2021, Chapter 252
31A-37-202
, as last amended by Laws of Utah 2021, Chapter 252
31A-37-204
, as last amended by Laws of Utah 2021, Chapter 252
49-20-401
, as last amended by Laws of Utah 2022, Chapter 302
63J-1-602.1
, as last amended by Laws of Utah 2022, Chapters 48, 191, 255, 335, 415,
and 451
ENACTS:
31A-22-728
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. 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[
.
]
; or
(c) in requesting, responding to a request, or reviewing a response to a request under
Section 
31A-2-202
.
(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 (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 (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
(2) is not a violation of this title.
(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.
(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).
(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.
(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.
(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 (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 (8), except the commissioner may use information from the report as a basis for
action under Chapter 27a, Insurer Receivership Act.
(8) (a) The commissioner shall serve a copy of the examination report described in
Subsection (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 (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 (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.
(9) The examinee shall promptly furnish copies of the adopted examination report
described in Subsection (8) to each member of the examinee's board.
(10) After an examination report becomes a public document under Subsection (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.
(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 2. Section 
31A-2-310
 is amended to read:
31A-2-310.
Procedure for service of process through state officer.
(1) Service upon the commissioner or lieutenant governor under Section 
31A-2-309
 is
service on the principal, if:
(a) [
two copies of the process
] 
the following
 are delivered personally or to the office of
the official designated in Section 
31A-2-309
[
, and
]
:
(i) two copies of the process to be served; and
(ii) a certificate of proof of service that meets the requirements of Subsection (3), dated
and signed by the official designated in Section 
31A-2-309
; and
(b) that official mails a copy of the process to the person to be served according to
Subsection (2)(b).
(2) (a) The commissioner and the lieutenant governor shall give receipts for and keep
records of all process served through them.
(b) The commissioner or the lieutenant governor shall immediately send by certified
mail one copy of the process received to the person to be served at that person's last known
principal place of business, residence, or post-office address. The commissioner or the
lieutenant governor shall retain the other copy for his files.
(c) No plaintiff or complainant may take a judgment by default in any proceeding in
which process is served under this section and Section 
31A-2-309
 until the expiration of 40
days from the date of service of process under Subsection (2)(b).
(3) Proof of service shall be evidenced by a certificate by the official designated in
Section 
31A-2-309
, showing service made upon him and mailing by him, and attached to a
copy of the process presented to him for that purpose.
(4) When process is served under this section, the words "twenty days" in the first
sentence of Rule 12(a) of the Utah Rules of Civil Procedure shall be changed to read "forty
days." 
Section 3. 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 2018-2019 and subsequent fiscal years, in excess of $1,600,000;
[
and
]
(ii) for fiscal year 2019-2020 and subsequent fiscal years, in excess of $1,450,000[
.
]
;
and
(iii) for fiscal year 2023-2024 and subsequent fiscal years, in excess of $1,650,000.
Section 4. Section 
31A-4-113.5
 is amended to read:
31A-4-113.5.
Filing requirements -- National Association of Insurance
Commissioners.
(1) (a) Each domestic, foreign, and alien insurer who is authorized to transact insurance
business in this state shall annually[
, on or before March 1, file with the National Association
of Insurance Commissioners
] 
file with the NAIC
 a copy of the insurer's:
(i) annual statement convention blank 
on or before March 1
; [
and
]
(ii) market conduct annual statements:
(A) on or before April 30, for all lines of business except health; and
(B) on or before June 30, for the health line of business; and
[
(ii)
] 
(iii)
 any additional filings required by the commissioner for the preceding year.
(b) 
(i)
 The information filed with the [
National Association of Insurance
Commissioners
] 
NAIC
 under Subsection [
(1)(a)
] 
(1)(a)(i)
 shall:
[
(i)
] 
(A)
 [
be in the format and scope required by the commissioner; and
] 
be prepared in
accordance with the NAIC's:
(I) annual statement instructions; and
(II) Accounting Practices and Procedures Manual; and
[
(ii)
] 
(B)
 include:
[
(A)
] 
(I)
 the signed jurat page; and
[
(B)
] 
(II)
 the actuarial certification.
(ii) An insurer shall file with the NAIC amendments and addenda to information filed
with the commissioner under Subsection (1)(a)(i).
(c) [
Any amendments and addendums to an annual statement that are filed with the
commissioner shall be filed by the insurer with the National Association of Insurance
Commissioners.
] 
The information filed with the NAIC under Subsection (1)(a)(ii) shall be
prepared in accordance with the NAIC's Market Conduct Annual Statement Industry User
Guide.
(d) At the time an insurer makes a filing under this Subsection (1), the insurer shall pay
any filing fees assessed by the [
National Association of Insurance Commissioners
] 
NAIC
.
(e) A foreign insurer that is domiciled in a state that has a law substantially similar to
this section shall be considered to be in compliance with this section.
(2) All financial analysis ratios and examination synopses concerning insurance
companies that are submitted to the department by the Insurance Regulatory Information
System are confidential and may not be disclosed by the department.
(3) The commissioner may suspend, revoke, or refuse to renew the certificate of
authority of any insurer failing to:
(a) [
file the annual statement as required by
] 
submit the filings under
 Subsection (1)(a)
when due or within any extension of time granted for good cause by:
(i) the commissioner; or
(ii) the [
National Association of Insurance Commissioners
] 
NAIC
; or
(b) pay by the time specified in Subsection (3)(a) a fee the insurer is required to pay
under this section to:
(i) the commissioner; or
(ii) the [
National Association of Insurance Commissioners
] 
NAIC
.
Section 5. 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) 
(a)
 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 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
] 
an
 interested party.
(10) (a) [
The commissioner shall hold a public hearing under Subsection (9) no later
than 45 days after the day on which the statement required by Subsection (1) is filed.
] 
If the
commissioner does not hold a hearing described in Subsection (9), the commissioner shall
approve or deny the merger or other acquisition within 30 days after the day on which the
department deems the statement required under Subsection (1) complete.
(b) (i) The commissioner shall give at least 20 [
days notice of the hearing to the person
filing the statement
] 
days' notice of a hearing described in Subsection (9) to the person filing
the statement described in Subsection (1)
.
(ii) [
Affected parties may waive the notice required by this Subsection (9)(b).
] 
The
commissioner shall hold a hearing described in Subsection (9) within 30 days after the day on
which the department deems the statement required under Subsection (1) complete.
(iii) Not less than seven [
days
] 
days'
 notice of the [
public
] hearing shall be given by the
person filing the statement 
under Subsection (1)
 to:
(A) the insurer; and
(B) any person designated by the commissioner.
(iv) Affected parties may waive the notice required under this Subsection (10)(b).
(v) At the hearing, the person filing the statement under Subsection (1), the insurer, any
person to whom notice of hearing was sent, and any person whose interest may be affected by
the hearing may:
(A) present evidence;
(B) examine and cross-examine witnesses; and
(C) offer oral and written arguments.
(vi) (A) A person or insurer described in Subsection (10)(b)(v) may conduct discovery
in the same manner as is allowed in the district courts of this state.
(B) All discovery shall be concluded not later than three days before the
commencement of the hearing.
[
(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 (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.
]
(11) If the proposed acquisition of control will require the approval of more than one
commissioner, the public hearing described in Subsection (9) 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
(11) in person or by telecommunication.
(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).
(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 (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 (13)(c)(iii)(A);
and
(C) file with the department as a public record a copy of the consolidated account
described in Subsection (13)(c)(iii)(A).
(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 (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 (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 (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 (14).
(15) (a) All statements, amendments, or other material filed under Subsection (1), and
all notices of public hearings held under Subsection [
(8)
] 
(10)
, 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.
(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.
(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.
(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 (18)(a)(i) arising out of a
violation of this section.
(b) A person described in Subsection (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 (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 6. Section 
31A-17-404
 is amended to read:
31A-17-404.
Credit allowed a domestic ceding insurer against reserves for
reinsurance.
(1) (a) Subject to Subsections (1)(b) and (c), a domestic ceding insurer is allowed
credit for reinsurance as either an asset or a reduction from liability for reinsurance ceded only
if the reinsurer meets the requirements of Subsection (3), (4), (5), (6), (7), (8), or (9).
(b) Credit is allowed under Subsection (3), (4), or (5) only with respect to a cession of
a kind or class of business that the assuming insurer is licensed or otherwise permitted to write
or assume:
(i) in the assuming insurer's state of domicile; or
(ii) in the case of a United States branch of an alien assuming insurer, in the state
through which the assuming insurer is entered and licensed to transact insurance or
reinsurance.
(c) Credit is allowed under Subsection (5) or (6) only if the applicable requirements of
Subsection (11) are met.
(2) A domestic ceding insurer is allowed credit for reinsurance ceded:
(a) only if the reinsurance is payable in a manner consistent with Section 
31A-22-1201
;
(b) only to the extent that the accounting:
(i) is consistent with the terms of the reinsurance contract; and
(ii) clearly reflects:
(A) the amount and nature of risk transferred; and
(B) liability, including contingent liability, of the ceding insurer;
(c) only to the extent the reinsurance contract shifts insurance policy risk from the
ceding insurer to the assuming reinsurer in fact and not merely in form; and
(d) only if the reinsurance contract contains a provision placing on the reinsurer the
credit risk of all dealings with intermediaries regarding the reinsurance contract.
(3) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
assuming insurer that is licensed to transact insurance or reinsurance in this state.
(4) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
assuming insurer that is accredited by the commissioner as a reinsurer in this state.
(b) An insurer is accredited as a reinsurer if the insurer:
(i) files with the commissioner evidence of the insurer's submission to this state's
jurisdiction;
(ii) submits to the commissioner's authority to examine the insurer's books and records;
(iii) (A) is licensed to transact insurance or reinsurance in at least one state; or
(B) in the case of a United States branch of an alien assuming insurer, is entered
through and licensed to transact insurance or reinsurance in at least one state;
(iv) files annually with the commissioner a copy of the insurer's:
(A) annual statement filed with the insurance department of the insurer's state of
domicile; and
(B) most recent audited financial statement; and
(v) (A) (I) has not had the insurer's accreditation denied by the commissioner within 90
days after the day on which the insurer submits the information required by this Subsection (4);
and
(II) maintains a surplus with regard to policyholders in an amount not less than
$20,000,000; or
(B) (I) has the insurer's accreditation approved by the commissioner; and
(II) maintains a surplus with regard to policyholders in an amount less than
$20,000,000.
(c) Credit may not be allowed a domestic ceding insurer if the assuming insurer's
accreditation is revoked by the commissioner after a notice and hearing.
(5) (a) A domestic ceding insurer is allowed a credit if:
(i) the reinsurance is ceded to an assuming insurer that is:
(A) domiciled in a state meeting the requirements of Subsection (5)(a)(ii); or
(B) in the case of a United States branch of an alien assuming insurer, is entered
through a state meeting the requirements of Subsection (5)(a)(ii);
(ii) the state described in Subsection (5)(a)(i) employs standards regarding credit for
reinsurance substantially similar to those applicable under this section; and
(iii) the assuming insurer or United States branch of an alien assuming insurer:
(A) maintains a surplus with regard to policyholders in an amount not less than
$20,000,000; and
(B) submits to the authority of the commissioner to examine the insurer's books and
records.
(b) The requirements of Subsections (5)(a)(i) and (ii) do not apply to reinsurance ceded
and assumed pursuant to a pooling arrangement among insurers in the same holding company
system.
(6) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
assuming insurer that maintains a trust fund:
(i) created in accordance with rules made by the commissioner pursuant to Title 63G,
Chapter 3, Utah Administrative Rulemaking Act; and
(ii) in a qualified United States financial institution for the payment of a valid claim of:
(A) a United States ceding insurer of the assuming insurer;
(B) an assign of the United States ceding insurer; and
(C) a successor in interest to the United States ceding insurer.
(b) To enable the commissioner to determine the sufficiency of the trust fund described
in Subsection (6)(a), the assuming insurer shall:
(i) report annually to the commissioner information substantially the same as that
required to be reported on the National Association of Insurance Commissioners Annual
Statement form by a licensed insurer; and
(ii) (A) submit to examination of its books and records by the commissioner; and
(B) pay the cost of an examination.
(c) (i) Credit for reinsurance may not be granted under this Subsection (6) unless the
form of the trust and any amendment to the trust is approved by:
(A) the commissioner of the state where the trust is domiciled; or
(B) the commissioner of another state who, pursuant to the terms of the trust
instrument, accepts principal regulatory oversight of the trust.
(ii) The form of the trust and an amendment to the trust shall be filed with the
commissioner of every state in which a ceding insurer beneficiary of the trust is domiciled.
(iii) The trust instrument shall provide that a contested claim is valid and enforceable
upon the final order of a court of competent jurisdiction in the United States.
(iv) The trust shall vest legal title to the trust's assets in one or more of the trust's
trustees for the benefit of:
(A) a United States ceding insurer of the assuming insurer;
(B) an assign of the United States ceding insurer; or
(C) a successor in interest to the United States ceding insurer.
(v) The trust and the assuming insurer are subject to examination as determined by the
commissioner.
(vi) The trust shall remain in effect for as long as the assuming insurer has an
outstanding obligation due under a reinsurance agreement subject to the trust.
(vii) No later than February 28 of each year, the trustee of the trust shall:
(A) report to the commissioner in writing the balance of the trust;
(B) list the trust's investments at the end of the preceding calendar year; and
(C) (I) certify the date of termination of the trust, if so planned; or
(II) certify that the trust will not expire before the following December 31.
(d) The following requirements apply to the following categories of assuming insurer:
(i) For a single assuming insurer:
(A) the trust fund shall consist of funds in trust in an amount not less than the assuming
insurer's liabilities attributable to reinsurance ceded by United States ceding insurers; and
(B) the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000,
except as provided in Subsection (6)(d)(ii).
(ii) (A) At any time after the assuming insurer has permanently discontinued
underwriting new business secured by the trust for at least three full years, the commissioner
with principal regulatory oversight of the trust may authorize a reduction in the required
trusteed surplus, but only after a finding, based on an assessment of the risk, that the new
required surplus level is adequate for the protection of United States ceding insurers,
policyholders, and claimants in light of reasonably foreseeable adverse loss development.
(B) The risk assessment may involve an actuarial review, including an independent
analysis of reserves and cash flows, and shall consider all material risk factors, including, when
applicable, the lines of business involved, the stability of the incurred loss estimates, and the
effect of the surplus requirements on the assuming insurer's liquidity or solvency.
(C) The minimum required trusteed surplus may not be reduced to an amount less than
30% of the assuming insurer's liabilities attributable to reinsurance ceded by United States
ceding insurers covered by the trust.
(iii) For a group acting as assuming insurer, including incorporated and individual
unincorporated underwriters:
(A) for reinsurance ceded under a reinsurance agreement with an inception,
amendment, or renewal date on or after August 1, 1995, the trust shall consist of a trusteed
account in an amount not less than the respective underwriters' several liabilities attributable to
business ceded by the one or more United States domiciled ceding insurers to an underwriter of
the group;
(B) for reinsurance ceded under a reinsurance agreement with an inception date on or
before July 31, 1995, and not amended or renewed after July 31, 1995, notwithstanding the
other provisions of this chapter, the trust shall consist of a trusteed account in an amount not
less than the respective underwriters' several insurance and reinsurance liabilities attributable to
business written in the United States;
(C) in addition to a trust described in Subsection (6)(d)(iii)(A) or (B), the group shall
maintain in trust a trusteed surplus of which $100,000,000 is held jointly for the benefit of the
one or more United States domiciled ceding insurers of a member of the group for all years of
account;
(D) the incorporated members of the group:
(I) may not be engaged in a business other than underwriting as a member of the group;
and
(II) are subject to the same level of regulation and solvency control by the group's
domiciliary regulator as are the unincorporated members; and
(E) within 90 days after the day on which the group's financial statements are due to be
filed with the group's domiciliary regulator, the group shall provide to the commissioner:
(I) an annual certification by the group's domiciliary regulator of the solvency of each
underwriter member; or
(II) if a certification is unavailable, a financial statement, prepared by an independent
public accountant, of each underwriter member of the group.
(iv) For a group of incorporated underwriters under common administration, the group
shall:
(A) have continuously transacted an insurance business outside the United States for at
least three years immediately preceding the day on which the group makes application for
accreditation;
(B) maintain aggregate policyholders' surplus of at least $10,000,000,000;
(C) maintain a trust fund in an amount not less than the group's several liabilities
attributable to business ceded by the one or more United States domiciled ceding insurers to a
member of the group pursuant to a reinsurance contract issued in the name of the group;
(D) in addition to complying with the other provisions of this Subsection (6)(d)(iv),
maintain a joint trusteed surplus of which $100,000,000 is held jointly for the benefit of the one
or more United States domiciled ceding insurers of a member of the group as additional
security for these liabilities; and
(E) within 90 days after the day on which the group's financial statements are due to be
filed with the group's domiciliary regulator, make available to the commissioner:
(I) an annual certification of each underwriter member's solvency by the member's
domiciliary regulator; and
(II) a financial statement of each underwriter member of the group prepared by an
independent public accountant.
(7) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
assuming insurer that secures the assuming insurer's obligations in accordance with this
Subsection (7):
(a) The insurer shall be certified by the commissioner as a reinsurer in this state.
(b) To be eligible for certification, the assuming insurer shall:
(i) be domiciled and licensed to transact insurance or reinsurance in a qualified
jurisdiction, as determined by the commissioner pursuant to Subsection (7)(d);
(ii) maintain minimum capital and surplus, or its equivalent, in an amount to be
determined by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
3, Utah Administrative Rulemaking Act;
(iii) maintain financial strength ratings from two or more rating agencies considered
acceptable by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
3, Utah Administrative Rulemaking Act; and
(iv) agree to:
(A) submit to the jurisdiction of this state;
(B) appoint the commissioner as the assuming insurer's agent for service of process in
this state;
(C) provide security for 100% of the assuming insurer's liabilities attributable to
reinsurance ceded by United States ceding insurers if the assuming insurer resists enforcement
of a final United States judgment;
(D) agree to meet applicable information filing requirements as determined by the
commissioner including an application for certification, a renewal and on an ongoing basis; and
(E) any other requirements for certification considered relevant by the commissioner.
(c) An association, including incorporated and individual unincorporated underwriters,
may be a certified reinsurer, if the association:
(i) satisfies the requirements of Subsections (7)(a) and (b);
(ii) satisfies the association's minimum capital and surplus requirements through the
capital and surplus equivalents, net of liabilities, of the association and the association's
members, which shall include a joint central fund that may be applied to any unsatisfied
obligation of the association or any of the association's members in an amount determined by
the commissioner to provide adequate protection;
(iii) does not have incorporated members of the association engaged in any business
other than underwriting as a member of the association;
(iv) is subject to the same level of regulation and solvency control of the incorporated
members of the association by the association's domiciliary regulator as are the unincorporated
members; and
(v) within 90 days after the day on which the association's financial statements are due
to be filed with the association's domiciliary regulator, provides to the commissioner:
(A) an annual certification by the association's domiciliary regulator of the solvency of
each underwriter member; or
(B) if a certification described in Subsection (7)(c)(v)(A) is unavailable, financial
statements prepared by independent public accountants, of each underwriter member of the
association.
(d) (i) The commissioner shall create and publish a list of qualified jurisdictions under
which an assuming insurer licensed and domiciled in the jurisdiction is eligible to be
considered for certification by the commissioner as a certified reinsurer.
(ii) To determine whether the domiciliary jurisdiction of a non-United States assuming
insurer is eligible to be recognized as a qualified jurisdiction, the commissioner:
(A) shall evaluate the appropriateness and effectiveness of the reinsurance supervisory
system of the jurisdiction, both initially and on an ongoing basis;
(B) shall consider the rights, the benefits, and the extent of reciprocal recognition
afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the
United States;
(C) shall require the qualified jurisdiction to share information and cooperate with the
commissioner with respect to all certified reinsurers domiciled within that jurisdiction; and
(D) may not recognize a jurisdiction as a qualified jurisdiction if the commissioner has
determined that the jurisdiction does not adequately and promptly enforce final United States
judgments and arbitration awards.
(iii) The commissioner may consider additional factors in determining a qualified
jurisdiction.
(iv) A list of qualified jurisdictions shall be published through the National Association
of Insurance Commissioners' Committee Process.
(v) The commissioner shall:
(A) consider the National Association of Insurance Commissioners' list of qualified
jurisdictions in determining qualified jurisdictions; and
(B) if the commissioner approves a jurisdiction as qualified that does not appear on the
National Association of Insurance Commissioners' list of qualified jurisdictions, provide
thoroughly documented justification in accordance with criteria to be developed by rule made
in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(vi) United States jurisdictions that meet the requirement for accreditation under the
National Association of Insurance Commissioners' financial standards and accreditation
program shall be recognized as qualified jurisdictions.
(vii) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified
jurisdiction, the commissioner may suspend the reinsurer's certification indefinitely, in lieu of
revocation.
(e) The commissioner shall:
(i) assign a rating to each certified reinsurer, giving due consideration to the financial
strength ratings that have been assigned by rating agencies considered acceptable to the
commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
Rulemaking Act; and
(ii) publish a list of all certified reinsurers and their ratings.
(f) A certified reinsurer shall secure obligations assumed from United States ceding
insurers under this Subsection (7) at a level consistent with the certified reinsurer's rating, as
specified in rules made by the commissioner in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(i) For a domestic ceding insurer to qualify for full financial statement credit for
reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a
form acceptable to the commissioner and consistent with Section 
31A-17-404.1
, or in a
multibeneficiary trust in accordance with Subsections (5), (6), and (9), except as otherwise
provided in this Subsection (7).
(ii) If a certified reinsurer maintains a trust to fully secure the certified reinsurer's
obligations subject to Subsections (5), (6), and (9), and chooses to secure the certified
reinsurer's obligations incurred as a certified reinsurer in the form of a multibeneficiary trust,
the certified reinsurer shall maintain separate trust accounts for the certified reinsurer's
obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer
with reduced security as permitted by this Subsection (7) or comparable laws of other United
States jurisdictions and for the certified reinsurer's obligations subject to Subsections (5), (6),
and (9).
(iii) It shall be a condition to the grant of certification under this Subsection (7) that the
certified reinsurer shall have bound itself:
(A) by the language of the trust and agreement with the commissioner with principal
regulatory oversight of the trust account; and
(B) upon termination of the trust account, to fund, out of the remaining surplus of the
trust, any deficiency of any other trust account.
(iv) The minimum trusteed surplus requirements provided in Subsections (5), (6), and
(9) are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer
for the purpose of securing obligations incurred under this Subsection (7), except that the trust
shall maintain a minimum trusteed surplus of $10,000,000.
(v) With respect to obligations incurred by a certified reinsurer under this Subsection
(7), if the security is insufficient, the commissioner:
(A) shall reduce the allowable credit by an amount proportionate to the deficiency; and
(B) may impose further reductions in allowable credit upon finding that there is a
material risk that the certified reinsurer's obligations will not be paid in full when due.
(vi) (A) For purposes of this Subsection (7), a certified reinsurer whose certification
has been terminated for any reason shall be treated as a certified reinsurer required to secure
100% of the certified reinsurer's obligations.
(B) As used in this Subsection (7), the term "terminated" refers to revocation,
suspension, voluntary surrender, and inactive status.
(C) If the commissioner continues to assign a higher rating as permitted by other
provisions of this section, the requirement under this Subsection (7)(f)(vi) does not apply to a
certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.
(g) If an applicant for certification has been certified as a reinsurer in a National
Association of Insurance Commissioners' accredited jurisdiction, the commissioner may:
(i) defer to that jurisdiction's certification;
(ii) defer to the rating assigned by that jurisdiction; and
(iii) consider such reinsurer to be a certified reinsurer in this state.
(h) (i) A certified reinsurer that ceases to assume new business in this state may request
to maintain the certified reinsurer's certification in inactive status in order to continue to qualify
for a reduction in security for its in-force business.
(ii) An inactive certified reinsurer shall continue to comply with all applicable
requirements of this Subsection (7).
(iii) The commissioner shall assign a rating to a reinsurer that qualifies under this
Subsection (7)(h), that takes into account, if relevant, the reasons why the reinsurer is not
assuming new business.
(8) (a) As used in this Subsection (8):
(i) "Covered agreement" means an agreement entered into pursuant to Dodd-Frank
Wall Street Reform and Consumer Protection Act, 31 U.S.C. Sections 313 and 314, that:
(A) is currently in effect or in a period of provisional application; and
(B) addresses the elimination, under specified conditions, of collateral requirements as
a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this
state or for allowing the ceding insurer to recognize credit for reinsurance.
(ii) "Reciprocal jurisdiction" means a jurisdiction that is:
(A) a non-United States jurisdiction that is subject to an in-force covered agreement
with the United States, each within its legal authority, or, in the case of a covered agreement
between the United States and European Union, is a member state of the European Union;
(B) a United States jurisdiction that meets the requirements for accreditation under the
National Association of Insurance Commissioners' financial standards and accreditation
program; or
(C) a qualified jurisdiction, as determined by the commissioner in accordance with
Subsection (7)(d), that is not otherwise described in this Subsection (8)(a)(ii) and meets certain
additional requirements, consistent with the terms and conditions of in-force covered
agreements, as specified by the commissioner in rule made in accordance with Title 63G,
Chapter 3, Utah Administrative Rulemaking Act.
(b) (i) Credit is allowed when the reinsurance is ceded to an assuming insurer meeting
each of the conditions set forth in this Subsection (8)(b).
(ii) The assuming insurer must have the assuming insurer's head office in or be
domiciled in, as applicable, and be licensed in a reciprocal jurisdiction.
(iii) (A) The assuming insurer shall have and maintain, on an ongoing basis, minimum
capital and surplus, or its equivalent, calculated according to the methodology of the assuming
insurer's domiciliary jurisdiction, in an amount to be set forth in regulation.
(B) If the assuming insurer is an association, including incorporated and individual
unincorporated underwriters, the assuming insurer shall have and maintain, on an ongoing
basis, minimum capital and surplus equivalents (net of liabilities), calculated according to the
methodology applicable in the assuming insurer's domiciliary jurisdiction, and a central fund
containing a balance in amounts set forth in regulation.
(iv) (A) The assuming insurer must have and maintain, on an ongoing basis, a
minimum solvency or capital ration, as applicable, which will be set forth in regulation.
(B) If the assuming insurer is an association, including incorporated and individual
unincorporated underwriters, the assuming insurer must have and maintain, on an ongoing
basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming
insurer has the assuming insurer's head office or is domiciled, as applicable, and is also
licensed.
(v) The assuming insurer must agree and provide adequate assurance to the
commissioner, in a form specified by the commissioner by rule made in accordance with Title
63G, Chapter 3, Utah Administrative Rulemaking Act, as follows:
(A) the assuming insurer must provide prompt written notice and explanation to the
commissioner if the assuming insurer falls below the minimum requirements set forth in
Subsection (8)(c) or (d), or if any regulatory action is taken against the assuming insurer for
serious noncompliance with applicable law;
(B) the assuming insurer must consent in writing to the jurisdiction of the courts of this
state and to the appointment of the commissioner as agent for service of process, however the
commissioner may require that consent for service of process be provided to the commissioner
and included in each reinsurance agreement and nothing in this provision shall limit, or in any
way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute
resolution mechanisms, except to the extent such agreements are unenforceable under
applicable insolvency or delinquency laws;
(C) the assuming insurer must consent in writing to pay all final judgments, wherever
enforcement is sought, obtained by a ceding insurer or the ceding insurer's legal successor, that
have been declared enforceable in the jurisdiction where the judgment was obtained;
(D) each reinsurance agreement must include a provision requiring the assuming
insurer to provide security in an amount equal to 100% of the assuming insurer's liabilities
attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists
enforcement of a final judgment that is enforceable under the law of the jurisdiction in which
the final judgement was obtained or a properly enforceable arbitration award, whether obtained
by the ceding insurer or by the ceding insurer's legal successor on behalf of the ceding insurer's
resolution estate; and
(E) the assuming insurer must confirm that the assuming insurer is not presently
participating in any solvent scheme of arrangement which involved this state's ceding insurers,
and agree to notify the ceding insurer and the commissioner and to provide security:
(I) in an amount equal to 100% of the assuming insurer's liabilities to the ceding
insurer, should the assuming insurer enter into such a solvent scheme of arrangement; and
(II) in a form consistent with the provisions of Subsections (7) and (10) and as
specified by the commissioner in regulation.
(vi) The assuming insurer or the assuming insurer's legal successor must provide, if
requested by the commissioner, on behalf of the assuming insurer and any legal predecessors,
certain documentation to the commissioner, as specified by the commissioner by rule made in
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(vii) The assuming insurer must maintain a practice of prompt payment of claims under
reinsurance agreements, pursuant to criteria set forth in rule made in accordance with Title
63G, Chapter 3, Utah Administrative Rulemaking Act.
(viii) The assuming insurer's supervisory authority must confirm to the commissioner
on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily
reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements
set forth in Subsections (8)(c) and (d).
(ix) Nothing in this provision precludes an assuming insurer from providing the
commissioner with information on a voluntary basis.
(c) (i) The commissioner shall timely create and publish a list of reciprocal
jurisdictions.
(ii) (A) A list of reciprocal jurisdictions is published through the National Association
of Insurance Commissioners' Committee Process.
(B) The commissioner's list of reciprocal jurisdictions shall include any reciprocal
jurisdiction as defined in this Subsection (8), and shall consider any other reciprocal
jurisdictions in accordance with the criteria developed under rule made in accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(iii) (A) The commissioner may remove a jurisdiction from the list of reciprocal
jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a
reciprocal jurisdiction, in accordance with a process set forth in rule made in accordance with
Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except that the commissioner may
not remove from the list a reciprocal jurisdiction.
(B) Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance
ceded to an assuming insurer whose home office or domicile is in that jurisdiction is allowed, if
otherwise allowed under this chapter.
(d) (i) The commissioner shall timely create and publish a list of assuming insurers that
have satisfied the conditions set forth in this subsection and to which cessions shall be granted
credit in accordance with this Subsection (8).
(ii) The commissioner may add an assuming insurer to such list if a National
Association of Insurance Commissioners accredited jurisdiction has added such assuming
insurer to a list of such assuming insurers or if, upon initial eligibility, the assuming insurer
submits the information to the commissioner as required under this Subsection (8) and
complies with any additional requirements that the commissioner may impose by rule made in
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except to the
extent that they conflict with an applicable covered agreement.
(e) (i) If the commissioner determines that an assuming insurer no longer meets one or
more of the requirements under this Subsection (8), the commissioner may revoke or suspend
the eligibility of the assuming insurer for recognition under this Subsection (8) in accordance
with procedures established in rule made in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(ii) (A) While an assuming insurer's eligibility is suspended, no reinsurance agreement
issued, amended, or renewed after the day on which the suspension is effective qualifies for
credit except to the extent that the assuming insurer's obligations under the contract are secured
in accordance with Subsection (10).
(B) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be
granted after the day on which the revocation is effective with respect to any reinsurance
agreements entered into by the assuming insurer, including reinsurance agreements entered into
before the day on which the revocation is effective, except to the extent that the assuming
insurer's obligations under the contract are secured in a form acceptable to the commissioner
and consistent with the provisions of Subsection (10).
(f) If subject to a legal process of rehabilitation, liquidation, or conservation, as
applicable, the ceding insurer, or the ceding insurer's representative, may seek and, if
determined appropriate by the court in which the proceedings are pending, may obtain an order
requiring that the assuming insurer post security for all outstanding ceded liabilities.
(g) Nothing in this Subsection (8) limits or in any way alters the capacity of parties to a
reinsurance agreement to agree on requirements for security or other terms in that reinsurance
agreement, except as expressly prohibited by this chapter or other applicable law or regulation.
(h) (i) Credit may be taken under this Subsection (8) only for reinsurance agreements
entered into, amended, or renewed on or after the effective date of the statute adding this
Subsection (8), and only with respect to losses incurred and reserves reported on or after the
later of:
(A) the day on which the assuming insurer has met all eligibility requirements pursuant
to Subsection (8)(b); and
(B) the day on which the new reinsurance agreement, amendment, or renewal is
effective.
(ii) This Subsection (8) does not alter or impair a ceding insurer's right to take credit
for reinsurance, to the extent that credit is not available under this Subsection (8), as long as the
reinsurance qualifies for credit under any other applicable provision of this chapter.
(iii) Nothing in this Subsection (8) authorizes an assuming insurer to withdraw or
reduce the security provided under any reinsurance agreement except as permitted by the terms
of the agreement.
(iv) Nothing in this Subsection (8) limits, or in any way alters, the capacity of parties to
any reinsurance agreement to renegotiate the agreement.
(9) If reinsurance is ceded to an assuming insurer not meeting the requirements of
Subsection (3), (4), (5), (6), (7), or (8), a domestic ceding insurer is allowed credit only as to
the insurance of a risk located in a jurisdiction where the reinsurance is required by applicable
law or regulation of that jurisdiction.
(10) (a) An asset or a reduction from liability for the reinsurance ceded by a domestic
insurer to an assuming insurer not meeting the requirements of Subsection (3), (4), (5), (6), (7),
or (8) shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer.
(b) The commissioner may adopt by rule made in accordance with Title 63G, Chapter
3, Utah Administrative Rulemaking Act, specific additional requirements relating to or setting
forth:
(i) the valuation of assets or reserve credits;
(ii) the amount and forms of security supporting reinsurance arrangements; and
(iii) the circumstances pursuant to which credit will be reduced or eliminated.
(c) (i) The reduction shall be in the amount of funds held by or on behalf of the ceding
insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with
the assuming insurer as security for the payment of obligations thereunder, if the security is:
(A) held in the United States subject to withdrawal solely by, and under the exclusive
control of, the ceding insurer; or
(B) in the case of a trust, held in a qualified United States financial institution.
(ii) The security described in this Subsection (10)(c) may be in the form of:
(A) cash;
(B) securities listed by the Securities Valuation Office of the National Association of
Insurance Commissioners, including those deemed exempt from filing as defined by the
Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted
assets;
(C) clean, irrevocable, unconditional letters of credit, issued or confirmed by a
qualified United States financial institution effective no later than December 31 of the year for
which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or
before the filing date of its annual statement;
(D) letters of credit meeting applicable standards of issuer acceptability as of the dates
of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's
subsequent failure to meet applicable standards of issuer acceptability, continue to be
acceptable as security until their expiration, extension, renewal, modification or amendment,
whichever first occurs; or
(E) any other form of security acceptable to the commissioner.
(11) Reinsurance credit is not allowed a domestic ceding insurer unless the assuming
insurer under the reinsurance contract submits to the jurisdiction of Utah courts by:
(a) (i) being an admitted insurer; and
(ii) submitting to jurisdiction under Section 
31A-2-309
;
(b) having irrevocably appointed the commissioner as the domestic ceding insurer's
agent for service of process in an action arising out of or in connection with the reinsurance,
which appointment is made under Section 
31A-2-309
; or
(c) agreeing in the reinsurance contract:
(i) that if the assuming insurer fails to perform the assuming insurer's obligations under
the terms of the reinsurance contract, the assuming insurer, at the request of the ceding insurer,
shall:
(A) submit to the jurisdiction of a court of competent jurisdiction in a state of the
United States;
(B) comply with all requirements necessary to give the court jurisdiction; and
(C) abide by the final decision of the court or of an appellate court in the event of an
appeal; and
(ii) to designate the commissioner or a specific attorney licensed to practice law in this
state as its attorney upon whom may be served lawful process in an action, suit, or proceeding
instituted by or on behalf of the ceding company.
(12) Submitting to the jurisdiction of Utah courts under Subsection (11) does not
override a duty or right of a party under the reinsurance contract, including a requirement that
the parties arbitrate their disputes.
(13) (a) If an assuming insurer does not meet the requirements of Subsection (3), (4),
(5), or (8), the credit permitted by Subsection (6) or (7) may not be allowed unless the
assuming insurer agrees in the trust instrument to the conditions described in Subsections
(13)(b) through (e).
(b) (i) Notwithstanding any other provision in the trust instrument, if an event
described in Subsection (13)(b)(ii) occurs the trustee shall comply with:
(A) an order of the commissioner with regulatory oversight over the trust; or
(B) an order of a court of competent jurisdiction directing the trustee to transfer to the
commissioner with regulatory oversight all of the assets of the trust fund.
(ii) This Subsection (13)(b) applies if:
(A) the trust fund is inadequate because the trust contains an amount less than the
amount required by Subsection (6)(d); or
(B) the grantor of the trust is:
(I) declared insolvent; or
(II) placed into receivership, rehabilitation, liquidation, or similar proceeding under the
laws of its state or country of domicile.
(c) The assets of a trust fund described in Subsection (13)(b) shall be distributed by and
a claim shall be filed with and valued by the commissioner with regulatory oversight in
accordance with the laws of the state in which the trust is domiciled that are applicable to the
liquidation of a domestic insurance company.
(d) If the commissioner with regulatory oversight determines that the assets of the trust
fund, or any part of the assets, are not necessary to satisfy the claims of the one or more United
States ceding insurers of the grantor of the trust, the assets, or a part of the assets, shall be
returned by the commissioner with regulatory oversight to the trustee for distribution in
accordance with the trust instrument.
(e) A grantor shall waive any right otherwise available to the grantor under United
States law that is inconsistent with this Subsection (13).
(14) (a) If an accredited or certified reinsurer ceases to meet the requirements for
accreditation or certification, the commissioner may suspend or revoke the reinsurer's
accreditation or certification.
(b) The commissioner shall give the reinsurer notice and opportunity for hearing.
(c) The suspension or revocation may not take effect until after the day on which the
commissioner issues an order after a hearing, unless:
(i) the reinsurer waives the reinsurer's right to hearing;
(ii) the commissioner's order is based on:
(A) regulatory action by the reinsurer's domiciliary jurisdiction; or
(B) the voluntary surrender or termination of the reinsurer's eligibility to transact
insurance or reinsurance business in its domiciliary jurisdiction or primary certifying state
under Subsection (7)(g); or
(iii) the commissioner's finding that an emergency requires immediate action and a
court of competent jurisdiction has not stayed the commissioner's action.
(d) While a reinsurer's accreditation or certification is suspended, no reinsurance
contract issued or renewed after the effective date of the suspension qualifies for credit except
to the extent that the reinsurer's obligations under the contract are secured in accordance with
Section 
31A-17-404.1
.
(e) If a reinsurer's accreditation or certification is revoked, no credit for reinsurance
may be granted after the effective date of the revocation except to the extent that the reinsurer's
obligations under the contract are secured in accordance with Subsection (7)(f) or Section
31A-17-404.1
.
(15) (a) A ceding insurer shall take steps to manage the ceding insurer's reinsurance
recoverables proportionate to the ceding insurer's own book of business.
(b) (i) A domestic ceding insurer shall notify the commissioner within 30 days after the
day on which reinsurance recoverables from any single assuming insurer, or group of affiliated
assuming insurers:
(A) exceeds 50% of the domestic ceding insurer's last reported surplus to
policyholders; or
(B) after it is determined that reinsurance recoverables from any single assuming
insurer, or group of affiliated assuming insurers, is likely to exceed 50% of the domestic ceding
insurer's last reported surplus to policyholders.
(ii) The notification required by Subsection (15)(b)(i) shall demonstrate that the
exposure is safely managed by the domestic ceding insurer.
(c) A ceding insurer shall take steps to diversify the ceding insurer's reinsurance
program.
(d) (i) A domestic ceding insurer shall notify the commissioner within 30 days after the
day on which the ceding insurer cedes or is likely to cede more than 20% of the ceding insurer's
gross written premium in the prior calendar year to any:
(A) single assuming insurer; or
(B) group of affiliated assuming insurers.
(ii) The notification shall demonstrate that the exposure is safely managed by the
domestic ceding insurer.
(16) A ceding insurer licensed under Chapter 5, Domestic Stock and Mutual Insurance
Corporations, Chapter 7, Nonprofit Health Service Insurance Corporations, Chapter 8, Health
Maintenance Organizations and Limited Health Plans, 
or
 Chapter 9, Insurance Fraternals, [
or
Chapter 14, Foreign Insurers is not
] 
may be
 allowed credit if
:
(a)
 the reinsurance is ceded to an assuming domestic [
or foreign
] captive insurer[
,
unless
]
; and
(b)
 the assuming domestic [
or foreign
] captive insurer complies with:
(i) Sections 
31A-2-202
 through 
31A-2-205
;
[
(a)
] 
(ii)
 Chapter 4, Insurers in General;
[
(b)
] 
(iii)
 Chapter 16, Insurance Holding Companies;
[
(c)
] 
(iv)
 Chapter 16a, Risk Management and Own Risk and Solvency Assessment Act;
[
(d)
] 
(v)
 Chapter 17, Determination of Financial Condition; [
and
]
[
(e)
] 
(vi)
 Chapter 18, Investments[
.
]
; and
(vii) any other requirement that, in the commissioner's discretion, is necessary to
promote the captive insurer's solvency.
Section 7. Section 
31A-19a-209
 is amended to read:
31A-19a-209.
Special provisions for title insurance.
(1) (a) (i) The Title and Escrow Commission [
shall adopt rules
] 
may make rules, in
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and
 subject to
Section 
31A-2-404
, establishing rate standards and rating methods [
for individual title
insurance producers and agency title insurance producers
].
(ii) The commissioner shall determine compliance with rate standards and rating
methods for title insurers, individual title insurance producers, and agency title insurance
producers.
(b) In addition to the considerations in determining compliance with rate standards and
rating methods as set forth in Sections 
31A-19a-201
 and 
31A-19a-202
, including for title
insurers, the commissioner and the Title and Escrow Commission shall consider the costs and
expenses incurred by title insurers, individual title insurance producers, and agency title
insurance producers [
peculiar
] 
pertaining
 to the business of title insurance including:
(i) the maintenance of title plants; and
(ii) the examining of public records to determine insurability of title to real
[
redevelopment
] property.
[
(2) (a) A title insurer, an agency title insurance producer, or an individual title
insurance producer who is not an employee of a title insurer or who is not designated by an
agency title insurance producer shall file with the commissioner:
]
[
(i) a schedule of the escrow charges that the title insurer, individual title insurance
producer, or agency title insurance producer proposes to use in this state for services performed
in connection with the issuance of policies of title insurance; and
]
[
(ii) any changes to the schedule of the escrow charges described in Subsection
(2)(a)(i).
]
[
(b) Except for a schedule filed by a title insurer under this Subsection (2), a schedule
filed under this Subsection (2) is subject to review by the Title and Escrow Commission.
]
[
(c) (i) The schedule of escrow charges required to be filed by Subsection (2)(a)(i)
takes effect on the day on which the schedule of escrow charges is filed.
]
[
(ii) Any changes to the schedule of the escrow charges required to be filed by
Subsection (2)(a)(ii) take effect on the day specified in the change to the schedule of escrow
charges except that the effective date may not be less than 30 calendar days after the day on
which the change to the schedule of escrow charges is filed.
]
[
(3)
] 
(2)
 A title insurer, individual title insurance producer, or agency title insurance
producer may not [
file or
] use any rate or other charge relating to the business of title
insurance, including rates or charges [
filed
] for escrow that would cause the title insurance
company, individual title insurance producer, or agency title insurance producer to:
(a) operate at less than the cost of doing[
:
]
[
(i)
] the insurance business; or
[
(ii) the escrow business; or
]
(b) fail to adequately underwrite a title insurance policy.
[
(4) (a) All or any of the schedule of rates or schedule of charges, including the
schedule of escrow charges, may be changed or amended at any time, subject to the limitations
in this Subsection (4).
]
[
(b) Each change or amendment shall:
]
[
(i) be filed with the commissioner, subject to review by the Title and Escrow
Commission; and
]
[
(ii) state the effective date of the change or amendment, which may not be less than 30
calendar days after the day on which the change or amendment is filed.
]
[
(c) Any change or amendment remains in force for a period of at least 90 calendar
days from the change or amendment's effective date.
]
[
(5) While the schedule of rates and schedule of charges are effective, a copy of each
shall be:
]
[
(a) retained in each of the offices of:
]
[
(i) the title insurer in this state;
]
[
(ii) the title insurer's individual title insurance producers or agency title insurance
producers in this state; and
]
[
(b) upon request, furnished to the public.
]
[
(6) Except in accordance with the schedules of rates and charges filed with the
commissioner, a title insurer, individual title insurance producer, or agency title insurance
producer may not make or impose any premium or other charge:
]
[
(a) in connection with the issuance of a policy of title insurance; or
]
[
(b) for escrow services performed in connection with the issuance of a policy of title
insurance.
]
Section 8. Section 
31A-22-728
 is enacted to read:
 31A-22-728.
Large employer health benefit plan required report.
(1) As used in this section:
(a) "Claims run-out period" means the period beginning on the first day following the
last day of a plan year and ending on the 90th day following the last day of a plan year.
(b) "Large employer" means an employer who:
(i) with respect to a calendar year and to a plan year:
(A) employed an average of at least 51 employees on a business day during the
preceding calendar year; and
(B) employs at least one employee on the first day of the plan year; and
(ii) has at least 51 but fewer than 100 enrolled eligible employees enrolled in a group
health benefit plan during each consecutive month during the plan year.
(c) "Medical loss ratio" means a group health benefit plan's paid claims incurred during
a plan year, including the claims run-out period, divided by the total premium revenue
collected for the plan year.
(2) Except as provided in Subsection (6), beginning on January 1, 2024, an insurer that
offers a large employer health benefit plan to a large employer shall annually provide a report,
upon request of:
(a) the large employer;
(b) the large employer's appointed producer; or
(c) the large employer's consultant.
(3) The report described in Subsection (2) shall include:
(a) after the first renewal, the health benefit plan's aggregate performance from the
immediately preceding plan year that describes whether the health benefit plan had a medical
loss ratio of:
(i) less than 85%;
(ii) between 85% and 125%; or
(iii) greater than 125%; and
(b) after the second renewal and each subsequent renewal thereafter, a summary of the
health benefit plan's aggregate 24-month medical loss ratio from the immediately preceding
two plan years combined.
(4) An insurer that offers a large employer health benefit plan shall provide the
requested report described in Subsection (2) not less than 30 days after the claims run-out
period.
(5) (a) The report described in Subsection (2) is proprietary to the large employer, the
large employer's appointed producer, or the large employer's consultant.
(b) A person may not share the report described in Subsection (2) with a party other
than a party described in Subsection (5)(a).
(6) An insurer is not required to provide a report as described in this section if:
(a) the health benefit plan is a qualified health plan as defined in 45 C.F.R. Sec.
155.20;
(b) the health benefit plan is issued to a group other than an employee group described
in Section 
31A-22-502
;
(c) the large employer has not had continuous large employer health benefit plan
coverage with the insurer for at least 18 months before the date on which the large employer
requests the report;
(d) the large employer does not renew coverage with the insurer; or
(e) the insurer reasonably believes that providing the report would disclose information
described in Subsection 
13-61-102
(2)(g).
(7) An insurer that provides a report in compliance with this section is immune from
civil liability for the insurer's acts or omissions in providing information required under
Subsection (3).
Section 9. Section 
31A-23a-106
 is amended to read:
31A-23a-106.
License types.
(1) (a) A resident or nonresident license issued under this chapter shall be issued under
the license types described under Subsection (2).
(b) A license type and a line of authority pertaining to a license type describe the type
of licensee and the lines of business that a licensee may sell, solicit, or negotiate. A license
type is intended to describe the matters to be considered under any education, examination, and
training required of a license applicant under Sections 
31A-23a-108
, 
31A-23a-202
, and
31A-23a-203
.
(2) (a) A producer license type includes the following lines of authority:
(i) life insurance, including a nonvariable contract;
(ii) variable contracts, including variable life and annuity, if the producer has the life
insurance line of authority;
(iii) accident and health insurance, including a contract issued to a policyholder under
Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
Organizations and Limited Health Plans;
(iv) property insurance;
(v) casualty insurance, including a surety or other bond;
(vi) title insurance under one or more of the following categories:
(A) title examination, including authority to act as a title marketing representative;
(B) escrow, including authority to act as a title marketing representative; and
(C) title marketing representative only; and
(vii) personal lines insurance.
(b) A surplus lines producer license type includes the following lines of authority:
(i) property insurance, if the person holds an underlying producer license with the
property line of insurance; and
(ii) casualty insurance, if the person holds an underlying producer license with the
casualty line of authority.
(c) A limited line producer license type includes the following limited lines of
authority:
(i) limited line credit insurance;
(ii) travel insurance, as set forth in Part 9, Travel Insurance Act;
(iii) motor club insurance;
(iv) car rental related insurance;
(v) legal expense insurance;
(vi) crop insurance;
(vii) self-service storage insurance;
(viii) bail bond producer;
(ix) guaranteed asset protection waiver; [
and
]
(x) portable electronics insurance[
.
]
; and
(xi) pet insurance.
(d) A consultant license type includes the following lines of authority:
(i) life insurance, including a nonvariable contract;
(ii) variable contracts, including variable life and annuity, if the consultant has the life
insurance line of authority;
(iii) accident and health insurance, including a contract issued to a policyholder under
Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
Organizations and Limited Health Plans;
(iv) property insurance;
(v) casualty insurance, including a surety or other bond; and
(vi) personal lines insurance.
(e) A managing general agent license type includes the following lines of authority:
(i) life insurance, including a nonvariable contract;
(ii) variable contracts, including variable life and annuity, if the managing general
agent has the life insurance line of authority;
(iii) accident and health insurance, including a contract issued to a policyholder under
Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
Organizations and Limited Health Plans;
(iv) property insurance;
(v) casualty insurance, including a surety or other bond; and
(vi) personal lines insurance.
(f) A reinsurance intermediary license type includes the following lines of authority:
(i) life insurance, including a nonvariable contract;
(ii) variable contracts, including variable life and annuity, if the reinsurance
intermediary has the life insurance line of authority;
(iii) accident and health insurance, including a contract issued to a policyholder under
Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
Organizations and Limited Health Plans;
(iv) property insurance;
(v) casualty insurance, including a surety or other bond; and
(vi) personal lines insurance.
(g) A person who holds a license under Subsection (2)(a) has the qualifications
necessary to act as a holder of a license under Subsection (2)(c), except that the person may not
act under Subsection (2)(c)(viii) or (ix).
(3) (a) The commissioner may by rule recognize other producer, surplus lines producer,
limited line producer, consultant, managing general agent, or reinsurance intermediary lines of
authority as to kinds of insurance not listed under Subsections (2)(a) through (f).
(b) Notwithstanding Subsection (3)(a), for purposes of title insurance the Title and
Escrow Commission may by rule, with the concurrence of the commissioner and subject to
Section 
31A-2-404
, recognize other categories for an individual title insurance producer or
agency title insurance producer line of authority not listed under Subsection (2)(a)(vi).
(4) The variable contracts line of authority requires:
(a) for a producer, licensure by the Financial Industry Regulatory Authority as a:
(i) registered broker-dealer; or
(ii) broker-dealer agent, with a current registration with a broker-dealer; and
(b) for a consultant, registration with the Securities and Exchange Commission or
licensure by the Utah Division of Securities as an:
(i) investment adviser; or
(ii) investment adviser representative, with a current association with an investment
adviser.
(5) A surplus lines producer is a producer who has a surplus lines license.
Section 10. 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 or license applicant:
(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 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) has been convicted of
, or has entered a plea in abeyance as defined in Section
77-2a-1
 to
:
(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 an
equivalent to an insurance license or registration, or other professional or occupational license
or registration:
(A) denied;
(B) suspended;
(C) revoked; 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) has been convicted of violating the federal Violent Crime Control and Law
Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
in the business of insurance or participate in such business as required by 18 U.S.C. Sec. 1033;
(xxiv) engages in a method or practice in the conduct of business that endangers the
legitimate interests of customers and the public; or
(xxv) has been convicted of any criminal felony involving dishonesty or breach of trust
and has not obtained written consent to engage in the business of insurance or participate in
such business as required by 18 U.S.C. Sec. 1033.
(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 11. Section 
31A-23a-406
 is amended to read:
31A-23a-406.
Title insurance producer's business.
(1) As used in this section:
(a) "Automated clearing house network" or "ACH network" means a national
electronic funds transfer system regulated by the Federal Reserve and the Office of the
Comptroller of the Currency.
(b) "Depository institution" means the same as that term is defined in Section 
7-1-103
.
(c) "Funds transfer system" means the same as that term is defined in Section 
7-1-103
.
[
(1)
] 
(2)
 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) except as provided in Subsection [
(3)
] 
(4)
, 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 offering title insurance;
(ii) a lender's policy offering 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 offering title insurance;
(d) money deposited with the individual title insurance producer or agency title
insurance producer in connection with any escrow is deposited:
(i) in a federally insured depository institution, as defined in Section 
7-1-103
, that:
(A) has [
an office
] 
a branch
 in this state, if the individual title insurance producer or
agency title insurance producer depositing the money is a resident licensee; and
(B) is authorized by the depository institution's primary regulator to engage in trust
business, as defined in Section 
7-5-1
, in this state; and
(ii) in a trust account that is separate from all other trust account money that is not
related to real estate transactions;
(e) money deposited with the individual title insurance producer or agency title
insurance producer in connection with any escrow is the property of the one or more persons
entitled to the money under the provisions of the escrow; [
and
]
(f) money deposited with the individual title insurance producer or agency title
insurance producer in connection with an escrow is segregated escrow by escrow in the records
of the individual title insurance producer or agency title insurance producer;
(g) 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;
(h) 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
(i) 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)
] 
(3)
 Notwithstanding Subsection [
(1)
] 
(2)
, 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)
] 
(2)(c)
.
[
(3)
] 
(4)
 (a) Subsection [
(1)(c)
] 
(2)(c)
 does not apply if the transaction is for the
transfer of real property from the School and Institutional Trust Lands Administration.
(b) This subsection does not prohibit an individual title insurance producer or agency
title insurance producer from issuing a policy described in Subsection [
(1)(c)
] 
(2)(c)
 as part of a
transaction described in Subsection [
(3)(a)
] 
(4)(a)
.
[
(4)
] 
(5)
 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.
[
(5)
] 
(6)
 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.
[
(6)
] 
(7)
 (a) A check from the trust account described in Subsection [
(1)(d)
] 
(2)(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 [
(6)
] 
(7)
, 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[
.
]
;
(iv) deposits made through the ACH network may be disbursed on the same day the
deposit is made if:
(A) the transferred funds remain uniquely designated and traceable throughout the
entire ACH network transfer process;
(B) except as a function of the ACH network process, the transferred funds are not
subject to comingling or third party access during the transfer process;
(C) the transferred funds are deposited into the title insurance producer's escrow
account and are available for disbursement; and
(D) either the ACH network payment type or the title insurance producer's systems
prevent the transaction from being unilaterally canceled or reversed by the consumer once the
transferred funds are deposited to the individual title insurance producer or agency title
producer;
(v) deposits may be disbursed on the same day the deposit is made if the deposit is
made via:
(A) the Federal Reserve Bank through the Federal Reserve's funds transfer system; or
(B) a funds transfer system provided by an association of banks.
(c) A check or deposit not described in Subsection [
(6)(b)
] 
(7)(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.
[
(7)
] 
(8)
 An individual title insurance producer or agency title insurance producer shall
maintain a record of a receipt or disbursement of escrow money.
[
(8)
] 
(9)
 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.
[
(9)
] 
(10)
 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 12. Section 
31A-23a-409
 is amended to read:
31A-23a-409.
Trust obligation for money collected.
(1) (a) Subject to Subsection (7), a licensee is a trustee for money that is paid to,
received by, or collected by a licensee for forwarding to insurers or to insureds.
(b) (i) Except as provided in Subsection (1)(b)(ii), a licensee may not commingle trust
funds with:
(A) the licensee's own money; or
(B) money held in any other capacity.
(ii) This Subsection (1)(b) does not apply to:
(A) amounts necessary to pay bank charges; and
(B) money paid by insureds and belonging in part to the licensee as a fee or
commission.
(c) Except as provided under Subsection (4), a licensee owes to insureds and insurers
the fiduciary duties of a trustee with respect to money to be forwarded to insurers or insureds
through the licensee.
(d) (i) Unless money is sent to the appropriate payee by the close of the next business
day after their receipt, the licensee shall deposit them in an account authorized under
Subsection (2).
(ii) Money deposited under this Subsection (1)(d) shall remain in an account
authorized under Subsection (2) until sent to the appropriate payee.
(2) Money required to be deposited under Subsection (1) shall be deposited:
(a) in a federally insured trust account in a depository institution, as defined in Section
7-1-103
, which:
(i) has [
an office
] 
a branch
 in this state, if the [
licensee
] 
individual title insurance
producer or agency title insurance producer
 depositing the money is a resident licensee;
(ii) has federal deposit insurance; and
(iii) is authorized by its primary regulator to engage in the trust business, as defined by
Section 
7-5-1
, in this state; or
(b) in some other account, that:
(i) the commissioner approves by rule or order; and
(ii) provides safety comparable to an account described in Subsection (2)(a).
(3) It is not a violation of Subsection (2)(a) if the amounts in the accounts exceed the
amount of the federal insurance on the accounts.
(4) A trust account into which money is deposited may be interest bearing. The
interest accrued on the account may be paid to the licensee, so long as the licensee otherwise
complies with this section and with the contract with the insurer.
(5) A depository institution or other organization holding trust funds under this section
may not offset or impound trust account funds against debts and obligations incurred by the
licensee.
(6) A licensee who, not being lawfully entitled to do so, diverts or appropriates any
portion of the money held under Subsection (1) to the licensee's own use, is guilty of theft
under Title 76, Chapter 6, Part 4, Theft. Section 
76-6-412
 applies in determining the
classification of the offense. Sanctions under Section 
31A-2-308
 also apply.
(7) A nonresident licensee:
(a) shall comply with Subsection (1)(a) by complying with the trust account
requirements of the nonresident licensee's home state; and
(b) is not required to comply with the other provisions of this section.
Section 13. Section 
31A-23a-415
 is amended to read:
31A-23a-415.
Assessment on agency title insurance producers or title insurers --
Account created.
(1) For purposes of this section:
(a) "Premium" is as described in Subsection 
59-9-101
(3).
(b) "Title insurer" means a person:
(i) making any contract or policy of title insurance as:
(A) insurer;
(B) guarantor; or
(C) surety;
(ii) proposing to make any contract or policy of title insurance as:
(A) insurer;
(B) guarantor; or
(C) surety; or
(iii) transacting or proposing to transact any phase of title insurance, including:
(A) soliciting;
(B) negotiating preliminary to execution;
(C) executing of a contract of title insurance;
(D) insuring; and
(E) transacting matters subsequent to the execution of the contract and arising out of
the contract.
(c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
personal property located in Utah, an owner of real or personal property, the holders of liens or
encumbrances on that property, or others interested in the property against loss or damage
suffered by reason of:
(i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
property; or
(ii) invalidity or unenforceability of any liens or encumbrances on the property.
(2) (a) The commissioner may assess each title insurer, each individual title insurance
producer who is not an employee of a title insurer or who is not designated by an agency title
insurance producer, and each agency title insurance producer an annual assessment:
(i) determined by the Title and Escrow Commission:
(A) after consultation with the commissioner; and
(B) in accordance with this Subsection (2); and
(ii) to be used for the purposes described in Subsection (3).
(b) An agency title insurance producer and individual title insurance producer who is
not an employee of a title insurer or who is not designated by an agency title insurance
producer shall be assessed up to:
(i) $250 for the first office in each county in which the agency title insurance producer
or individual title insurance producer maintains an office; and
(ii) $150 for each additional office the agency title insurance producer or individual
title insurance producer maintains in the county described in Subsection (2)(b)(i).
(c) A title insurer shall be assessed up to:
(i) $250 for the first office in each county in which the title insurer maintains an office;
(ii) $150 for each additional office the title insurer maintains in the county described in
Subsection (2)(c)(i); and
(iii) an amount calculated by:
(A) aggregating the assessments imposed on:
(I) agency title insurance producers and individual title insurance producers under
Subsection (2)(b); and
(II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
(B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
costs and expenses determined under Subsection (2)(d); and
(C) multiplying:
(I) the amount calculated under Subsection (2)(c)(iii)(B); and
(II) the percentage of total premiums for title insurance on Utah risk that are premiums
of the title insurer.
(d) Notwithstanding Section 
31A-3-103
 and subject to Section 
31A-2-404
, 
during the
first quarter of each fiscal year
 the Title and Escrow Commission [
by rule shall establish
] 
shall
approve
 the amount of costs and expenses described under Subsection (3) 
for the prior fiscal
year
 that will be covered by the assessment[
, except the costs or expenses to be covered by the
assessment may not exceed the cost of one full-time equivalent position
].
(e) (i) An individual licensed to practice law in Utah is exempt from the requirements
of this Subsection (2) if that person issues 12 or less policies during a 12-month period.
(ii) In determining the number of policies issued by an individual licensed to practice
law in Utah for purposes of Subsection (2)(e)(i), if the individual issues a policy to more than
one party to the same closing, the individual is considered to have issued only one policy.
(3) (a) Money received by the state under this section shall be deposited into the Title
Licensee Enforcement Restricted Account.
(b) There is created in the General Fund a restricted account known as the "Title
Licensee Enforcement Restricted Account."
(c) The Title Licensee Enforcement Restricted Account shall consist of the money
received by the state under this section.
(d) The commissioner shall administer the Title Licensee Enforcement Restricted
Account. Subject to appropriations by the Legislature, the commissioner shall use the money
deposited into the Title Licensee Enforcement Restricted Account only to pay for a cost or
expense incurred by the department in the administration, investigation, and enforcement of
laws governing individual title insurance producers, agency title insurance producers, or title
insurers.
(e) An appropriation from the Title Licensee Enforcement Restricted Account is
nonlapsing.
(4) The assessment imposed by this section shall be in addition to any premium
assessment imposed under Subsection 
59-9-101
(3).
Section 14. Section 
31A-23b-401
 is amended to read:
31A-23b-401.
Revoking, suspending, surrendering, lapsing, limiting, or otherwise
terminating a license -- Rulemaking for renewal or reinstatement.
(1) A license as a navigator under this chapter remains in force until:
(a) revoked or suspended under Subsection (4);
(b) surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action;
(c) the licensee dies or is adjudicated incompetent as defined under:
(i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
(ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
Minors;
(d) lapsed under this section; or
(e) voluntarily surrendered.
(2) The following may be reinstated within one year after the day on which the license
is no longer in force:
(a) a lapsed license; or
(b) a voluntarily surrendered license, except that a voluntarily surrendered license may
not be reinstated after the license period in which the license is voluntarily surrendered.
(3) Unless otherwise stated in a written agreement for the voluntary surrender of a
license, submission and acceptance of a voluntary surrender of a license does not prevent the
department from pursuing additional disciplinary or other action authorized under:
(a) this title; or
(b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
commissioner may:
(i) revoke a license;
(ii) suspend a license for a specified period of 12 months or less;
(iii) limit a license in whole or in part;
(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 (4)(a)(i) through (iv) and
Subsection (4)(a)(v).
(b) The commissioner may take an action described in Subsection (4)(a) if the
commissioner finds that the licensee or license applicant:
(i) is unqualified for a license under Section 
31A-23b-204
, 
31A-23b-205
, or
31A-23b-206
;
(ii) violated:
(A) an insurance statute;
(B) a rule that is valid under Subsection 
31A-2-201
(3); or
(C) an order that is valid under Subsection 
31A-2-201
(4);
(iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
delinquency proceedings in any state;
(iv) failed to pay a final judgment rendered against the person in this state within 60
days after the day on which the judgment became final;
(v) refused:
(A) to be examined; or
(B) to produce its accounts, records, and files for examination;
(vi) had an officer who refused to:
(A) give information with respect to the navigator's affairs; or
(B) perform any other legal obligation as to an examination;
(vii) provided information in the license application that is:
(A) incorrect;
(B) misleading;
(C) incomplete; or
(D) materially untrue;
(viii) violated an insurance law, valid rule, or valid order of another regulatory agency
in any jurisdiction;
(ix) obtained or attempted to obtain a license through misrepresentation or fraud;
(x) improperly withheld, misappropriated, or converted money or properties received
in the course of doing insurance business;
(xi) intentionally misrepresented the terms of an actual or proposed:
(A) insurance contract;
(B) application for insurance; or
(C) application for public program;
(xii) has been convicted of
, or has entered a plea in abeyance as defined in Section
77-2a-1
 to
:
(A) a felony; or
(B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
(xiii) admitted or is found to have committed an insurance unfair trade practice or
fraud;
(xiv) in the conduct of business in this state or elsewhere:
(A) used fraudulent, coercive, or dishonest practices; or
(B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
(xv) has had an insurance license, navigator license, or other professional or
occupational license or registration, or an equivalent of the same denied, suspended, revoked,
or surrendered to resolve an administrative action;
(xvi) forged another's name to:
(A) an application for insurance;
(B) a document related to an insurance transaction;
(C) a document related to an application for a public program; or
(D) a document related to an application for premium subsidies;
(xvii) improperly used notes or another reference material to complete an examination
for a license;
(xviii) knowingly accepted insurance business from an individual who is not licensed;
(xix) failed to comply with an administrative or court order imposing a child support
obligation;
(xx) failed to:
(A) pay state income tax; or
(B) comply with an administrative or court order directing payment of state income
tax;
(xxi) has been convicted of violating the federal Violent Crime Control and Law
Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
in the business of insurance or participate in such business as required by 18 U.S.C. Sec. 1033;
(xxii) engaged in a method or practice in the conduct of business that endangered the
legitimate interests of customers and the public; or
(xxiii) has been convicted of any criminal felony involving dishonesty or breach of
trust and has not obtained written consent to engage in the business of insurance or participate
in such business as required by 18 U.S.C. Sec. 1033.
(c) For purposes of this section, if a license is held by an agency, both the agency itself
and any individual designated under the license are considered to be the holders of the license.
(d) If an individual designated under the agency license commits an act or fails to
perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
the commissioner may suspend, revoke, or limit the license of:
(i) the individual;
(ii) the agency, if the agency:
(A) is reckless or negligent in its supervision of the individual; or
(B) knowingly participates in the act or failure to act that is the ground for suspending,
revoking, or limiting the license; or
(iii) (A) the individual; and
(B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
(5) A licensee under this chapter is subject to the penalties for acting as a licensee
without a license if:
(a) the licensee's license is:
(i) revoked;
(ii) suspended;
(iii) surrendered in lieu of administrative action;
(iv) lapsed; or
(v) voluntarily surrendered; and
(b) the licensee:
(i) continues to act as a licensee; or
(ii) violates the terms of the license limitation.
(6) A licensee under this chapter shall immediately report to the commissioner:
(a) a revocation, suspension, or limitation of the person's license in another state, the
District of Columbia, or a territory of the United States;
(b) the imposition of a disciplinary sanction imposed on that person by another state,
the District of Columbia, or a territory of the United States; or
(c) a judgment or injunction entered against that person on the basis of conduct
involving:
(i) fraud;
(ii) deceit;
(iii) misrepresentation; or
(iv) a violation of an insurance law or rule.
(7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
license in lieu of administrative action may specify a time, not to exceed five years, within
which the former licensee may not apply for a new license.
(b) If no time is specified in an order or agreement described in Subsection (7)(a), the
former licensee may not apply for a new license for five years from the day on which the order
or agreement is made without the express approval of the commissioner.
(8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
a license issued under this chapter if so ordered by a court.
(9) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
Section 15. Section 
31A-25-208
 is amended to read:
31A-25-208.
Revoking, suspending, surrendering, lapsing, limiting, or otherwise
terminating a license -- Rulemaking for renewal and reinstatement.
(1) A license type issued under this chapter remains in force until:
(a) revoked or suspended under Subsection (4);
(b) surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action;
(c) the licensee dies or is adjudicated incompetent as defined under:
(i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
(ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
Minors;
(d) lapsed under Section 
31A-25-210
; or
(e) voluntarily surrendered.
(2) The following may be reinstated within one year after the day on which the license
is no longer in force:
(a) a lapsed license; or
(b) a voluntarily surrendered license, except that a voluntarily surrendered license may
not be reinstated after the license period in which the license is voluntarily surrendered.
(3) Unless otherwise stated in a written agreement for the voluntary surrender of a
license, submission and acceptance of a voluntary surrender of a license does not prevent the
department from pursuing additional disciplinary or other action authorized under:
(a) this title; or
(b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
commissioner may:
(i) revoke a license;
(ii) suspend a license for a specified period of 12 months or less;
(iii) limit a license in whole or in part; or
(iv) deny a license application.
(b) The commissioner may take an action described in Subsection (4)(a) if the
commissioner finds that the licensee or license applicant:
(i) is unqualified for a license under Section 
31A-25-202
, 
31A-25-203
, or 
31A-25-204
;
(ii) has violated:
(A) an insurance statute;
(B) a rule that is valid under Subsection 
31A-2-201
(3); or
(C) an order that is valid under Subsection 
31A-2-201
(4);
(iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
delinquency proceedings in any state;
(iv) fails to pay a final judgment rendered against the person in this state within 60
days after the day on which the judgment became final;
(v) fails to meet the same good faith obligations in claims settlement that is required of
admitted insurers;
(vi) is affiliated with and under the same general management or interlocking
directorate or ownership as another third party administrator that transacts business in this state
without a license;
(vii) refuses:
(A) to be examined; or
(B) to produce its accounts, records, and files for examination;
(viii) has an officer who refuses to:
(A) give information with respect to the third party administrator's affairs; or
(B) perform any other legal obligation as to an examination;
(ix) provides information in the license application that is:
(A) incorrect;
(B) misleading;
(C) incomplete; or
(D) materially untrue;
(x) has violated an insurance law, valid rule, or valid order of another regulatory
agency in any jurisdiction;
(xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
(xii) has improperly withheld, misappropriated, or converted money or properties
received in the course of doing insurance business;
(xiii) has intentionally misrepresented the terms of an actual or proposed:
(A) insurance contract; or
(B) application for insurance;
(xiv) has been convicted of
, or has entered a plea in abeyance as defined in Section
77-2a-1
 to
:
(A) a felony; or
(B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
(xv) has admitted or been found to have committed an insurance unfair trade practice
or fraud;
(xvi) in the conduct of business in this state or elsewhere has:
(A) used fraudulent, coercive, or dishonest practices; or
(B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
(xvii) has had an insurance license or other professional or occupational license or
registration, or an equivalent of the same, denied, suspended, revoked, or surrendered to
resolve an administrative action;
(xviii) has forged another's name to:
(A) an application for insurance; or
(B) a document related to an insurance transaction;
(xix) has improperly used notes or any other reference material to complete an
examination for an insurance license;
(xx) has knowingly accepted insurance business from an individual who is not
licensed;
(xxi) has failed to comply with an administrative or court order imposing a child
support obligation;
(xxii) has failed to:
(A) pay state income tax; or
(B) comply with an administrative or court order directing payment of state income
tax;
(xxiii) is convicted of violating the federal Violent Crime Control and Law
Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
in the business of insurance or participate in such business as required under 18 U.S.C. Sec.
1033;
(xxiv) has engaged in methods and practices in the conduct of business that endanger
the legitimate interests of customers and the public; or
(xxv) has been convicted of a criminal felony involving dishonesty or breach of trust
and has not obtained written consent to engage in the business of insurance or participate in
such business as required under 18 U.S.C. Sec. 1033.
(c) For purposes of this section, if a license is held by an agency, both the agency itself
and any individual designated under the license are considered to be the holders of the agency
license.
(d) If an individual designated under the agency license commits an act or fails to
perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
the commissioner may suspend, revoke, or limit the license of:
(i) the individual;
(ii) the agency if the agency:
(A) is reckless or negligent in its supervision of the individual; or
(B) knowingly participated in the act or failure to act that is the ground for suspending,
revoking, or limiting the license; or
(iii) (A) the individual; and
(B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
(5) A licensee under this chapter is subject to the penalties for acting as a licensee
without a license if:
(a) the licensee's license is:
(i) revoked;
(ii) suspended;
(iii) limited;
(iv) surrendered in lieu of administrative action;
(v) lapsed; or
(vi) voluntarily surrendered; and
(b) the licensee:
(i) continues to act as a licensee; or
(ii) violates the terms of the license limitation.
(6) A licensee under this chapter shall immediately report to the commissioner:
(a) a revocation, suspension, or limitation of the person's license in any other state, the
District of Columbia, or a territory of the United States;
(b) the imposition of a disciplinary sanction imposed on that person by any other state,
the District of Columbia, or a territory of the United States; or
(c) a judgment or injunction entered against the person on the basis of conduct
involving:
(i) fraud;
(ii) deceit;
(iii) misrepresentation; or
(iv) a violation of an insurance law or rule.
(7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
license in lieu of administrative action may specify a time, not to exceed five years, within
which the former licensee may not apply for a new license.
(b) If no time is specified in the order or agreement described in Subsection (7)(a), the
former licensee may not apply for a new license for five years from the day on which the order
or agreement is made without the express approval of the commissioner.
(8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
a license issued under this part if so ordered by the court.
(9) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
Section 16. Section 
31A-26-213
 is amended to read:
31A-26-213.
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-26-214.5
; or
(e) voluntarily surrendered.
(2) The following may be reinstated within one year after the day on which the license
is no longer in force:
(a) a lapsed license; or
(b) a voluntarily surrendered license, except that a voluntarily surrendered license may
not be reinstated after the license period in which it is voluntarily surrendered.
(3) Unless otherwise stated in a written agreement for the voluntary surrender of a
license, submission and acceptance of a voluntary surrender of a license does not prevent the
department from pursuing additional disciplinary or other action authorized under:
(a) this title; or
(b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(4) A license classification issued under this chapter remains in force until:
(a) the qualifications pertaining to a license classification are no longer met by the
licensee; or
(b) the supporting license type:
(i) is revoked or suspended under Subsection (5); or
(ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
administrative action.
(5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
commissioner may:
(i) revoke:
(A) a license; or
(B) a license classification;
(ii) suspend for a specified period of 12 months or less:
(A) a license; or
(B) a license classification;
(iii) limit in whole or in part:
(A) a license; or
(B) a license classification;
(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 or license applicant:
(i) is unqualified for a license or license classification under Section 
31A-26-202
,
31A-26-203
, 
31A-26-204
, or 
31A-26-205
;
(ii) has violated:
(A) an insurance statute;
(B) a rule that is valid under Subsection 
31A-2-201
(3); or
(C) an order that is valid under Subsection 
31A-2-201
(4);
(iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
delinquency proceedings in any state;
(iv) fails to pay a final judgment rendered against the person in this state within 60
days after the judgment became final;
(v) fails to meet the same good faith obligations in claims settlement that is required of
admitted insurers;
(vi) is affiliated with and under the same general management or interlocking
directorate or ownership as another insurance adjuster that transacts business in this state
without a license;
(vii) refuses:
(A) to be examined; or
(B) to produce its accounts, records, and files for examination;
(viii) has an officer who refuses to:
(A) give information with respect to the insurance adjuster's affairs; or
(B) perform any other legal obligation as to an examination;
(ix) provides information in the license application that is:
(A) incorrect;
(B) misleading;
(C) incomplete; or
(D) materially untrue;
(x) has violated an insurance law, valid rule, or valid order of another regulatory
agency in any jurisdiction;
(xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
(xii) has improperly withheld, misappropriated, or converted money or properties
received in the course of doing insurance business;
(xiii) has intentionally misrepresented the terms of an actual or proposed:
(A) insurance contract; or
(B) application for insurance;
(xiv) has been convicted of
, or has entered a plea in abeyance as defined in Section
77-2a-1
 to
:
(A) a felony; or
(B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
(xv) has admitted or been found to have committed an insurance unfair trade practice
or fraud;
(xvi) in the conduct of business in this state or elsewhere has:
(A) used fraudulent, coercive, or dishonest practices; or
(B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
(xvii) has had an insurance license or other professional or occupational license or
registration, or equivalent, denied, suspended, revoked, or surrendered to resolve an
administrative action;
(xviii) has forged another's name to:
(A) an application for insurance; or
(B) a document related to an insurance transaction;
(xix) has improperly used notes or any other reference material to complete an
examination for an insurance license;
(xx) has knowingly accepted insurance business from an individual who is not
licensed;
(xxi) has failed to comply with an administrative or court order imposing a child
support obligation;
(xxii) has failed to:
(A) pay state income tax; or
(B) comply with an administrative or court order directing payment of state income
tax;
(xxiii) has been convicted of a violation of the federal Violent Crime Control and Law
Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent in
accordance with 18 U.S.C. Sec. 1033 to engage in the business of insurance or participate in
such business;
(xxiv) has engaged in methods and practices in the conduct of business that endanger
the legitimate interests of customers and the public; or
(xxv) has been convicted of any criminal felony involving dishonesty or breach of trust
and has not obtained written consent in accordance with 18 U.S.C. Sec. 1033 to engage in the
business of insurance or participate in such business.
(c) For purposes of this section, if a license is held by an agency, both the agency itself
and any individual designated under the license are considered to be the holders of the license.
(d) If an individual designated under the agency license commits an act or fails to
perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
the commissioner may suspend, revoke, or limit the license of:
(i) the individual;
(ii) the agency, if the agency:
(A) is reckless or negligent in its supervision of the individual; or
(B) knowingly participated in the act or failure to act that is the ground for suspending,
revoking, or limiting the license; or
(iii) (A) the individual; and
(B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
(6) A licensee under this chapter is subject to the penalties for conducting an insurance
business without a license if:
(a) the licensee's license is:
(i) revoked;
(ii) suspended;
(iii) limited;
(iv) surrendered in lieu of administrative action;
(v) lapsed; or
(vi) voluntarily surrendered; and
(b) the licensee:
(i) continues to act as a licensee; or
(ii) violates the terms of the license limitation.
(7) A licensee under this chapter shall immediately report to the commissioner:
(a) a revocation, suspension, or limitation of the person's license in any other state, the
District of Columbia, or a territory of the United States;
(b) the imposition of a disciplinary sanction imposed on that person by any other state,
the District of Columbia, or a territory of the United States; or
(c) a judgment or injunction entered against that person on the basis of conduct
involving:
(i) fraud;
(ii) deceit;
(iii) misrepresentation; or
(iv) a violation of an insurance law or rule.
(8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
license in lieu of administrative action may specify a time not to exceed five years within
which the former licensee may not apply for a new license.
(b) If no time is specified in the order or agreement described in Subsection (8)(a), the
former licensee may not apply for a new license for five years without the express approval of
the commissioner.
(9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
a license issued under this part if so ordered by a court.
(10) The commissioner shall by rule prescribe the license renewal and reinstatement
procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
Section 17. Section 
31A-30-118
 is amended to read:
31A-30-118.
Patient Protection and Affordable Care Act -- State insurance
mandates -- Cost of additional benefits.
(1) (a) The commissioner shall identify a new mandated benefit that is in excess of the
essential health benefits required by PPACA.
(b) The state shall quantify the cost attributable to each additional mandated benefit
specified in Subsection (1)(a) based on a qualified health plan issuer's calculation of the cost
associated with the mandated benefit, which shall be:
(i) calculated in accordance with generally accepted actuarial principles and
methodologies;
(ii) conducted by a member of the American Academy of Actuaries; and
(iii) reported to the commissioner and to the individual exchange operating in the state.
(c) The commissioner may require a proponent of a new mandated benefit under
Subsection (1)(a) to provide the commissioner with a cost analysis conducted in accordance
with Subsection (1)(b). The commissioner may use the cost information provided under this
Subsection (1)(c) to establish estimates of the cost to the state under Subsection (2).
(2) If the state is required to defray the cost of additional required benefits under the
provisions of 45 C.F.R. 155.170:
(a) the state shall make the required payments:
(i) in accordance with Subsection (3); and
(ii) directly to the qualified health plan issuer in accordance with 45 C.F.R. 155.170;
(b) an issuer of a qualified health plan that receives a payment under the provisions of
Subsection (1) and 45 C.F.R. 155.170 shall:
(i) reduce the premium charged to the individual on whose behalf the issuer will be
paid under Subsection (1), in an amount equal to the amount of the payment under Subsection
(1); or
(ii) notwithstanding Subsection 
31A-23a-402.5
(5), provide a premium rebate to an
individual on whose behalf the issuer received a payment under Subsection (1), in an amount
equal to the amount of the payment under Subsection (1); and
(c) a premium rebate made under this section is not a prohibited inducement under
Section 
31A-23a-402.5
.
(3) A payment required under 45 C.F.R. 155.170(c) shall:
(a) unless otherwise required by PPACA, be based on a statewide average of the cost
of the additional benefit for all issuers who are entitled to payment under the provisions of 45
C.F.R. 155.170; and
(b) be submitted to an issuer through a process established by the commissioner.
(4) 
(a) As used in this Subsection (4), "account" means the State Mandated Insurer
Payments Restricted Account created in Subsection (4)(b).
(b) There is created in the General Fund a restricted account known as the "State
Mandated Insurer Payments Restricted Account."
(c) The account shall consist of:
(i) money appropriated to the account by the Legislature; and
(ii) interest earned on money in the account.
(d) Subject to appropriations from the Legislature, the commissioner shall administer
the account for the sole benefit of a qualified health plan issuer who is eligible to receive
payments under this section.
(e) An appropriation from the account is nonlapsing.
(5)
 The commissioner may adopt rules in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act, to:
(a) administer the provisions of this section and 45 C.F.R. 155.170; and
(b) establish or implement a process for submitting a payment to an issuer under
Subsection (3)(b).
Section 18. Section 
31A-31-110
 is amended to read:
31A-31-110.
Mandatory reporting of fraudulent insurance acts.
(1) (a) A person shall report a fraudulent insurance act to the department if:
(i) the person has a good faith belief on the basis of a preponderance of the evidence
that a fraudulent insurance act is being, will be, or has been committed by a person other than
the person making the report; and
(ii) the person is:
(A) an insurer; or
(B) in relation to the business of title insurance, an auditor that is employed by a title
insurer.
(b) The report required by this Subsection (1) shall:
(i) be in writing;
(ii) be submitted through:
(A) the National Insurance Crime Bureau fraud reporting system;
(B) the NAIC's online fraud reporting system; or
(C) email using an email address established by the department for the purpose of
submitting the report required by this Subsection (1);
[
(ii)
] 
(iii)
 provide information in detail relating to:
(A) the fraudulent insurance act; and
(B) the perpetrator of the fraudulent insurance act; and
[
(iii)
] 
(iv)
 (A) state whether the person required to report under Subsection (1)(a) also
reported the fraudulent insurance act in writing to:
(I) the attorney general;
(II) a state law enforcement agency;
(III) a criminal investigative department or agency of the United States;
(IV) a district attorney; or
(V) the prosecuting attorney of a municipality or county; and
(B) if the person reported the fraudulent insurance act as provided in Subsection
[
(1)(b)(iii)(A)
] 
(1)(b)(iv)(A)
, state the agency to which the person reported the fraudulent
insurance act.
(c) A person required to submit a written report under this Subsection (1) shall submit
the written report to the department by no later than 90 days from the day on which the person
required to report the fraudulent insurance act has a good faith belief on the basis of a
preponderance of the evidence that the fraudulent insurance act is being, will be, or has been
committed.
(2) An action brought under Section 
31A-2-201
, 
31A-2-308
, or 
31A-31-109
, for failure
to comply with Subsection (1) shall be commenced within four years from the date on which a
person described in Subsection (1):
(a) has a good faith belief on the basis of a preponderance of the evidence that a
fraudulent insurance act is being, will be, or has been committed; and
(b) willfully fails to report the fraudulent insurance act.
(3) The department may by rule made in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act, provide a process by which a person described in Subsection
(1)(a)(ii)(B) may comply with the requirements of Subsection (1) by reporting a fraudulent
insurance act to the insurer with whom the person is employed, except that the rule shall
provide that if the person reports the fraudulent insurance act to the insurer, the insurer is
required to report the fraudulent insurance act to the department.
(4) A person described in Subsection (1)(a)(ii) who in good faith makes a report under
this section, in accordance with Section 
31A-31-105
, is immune from civil action, civil
penalty, or damages for making that report.
Section 19. Section 
31A-35-504
 is amended to read:
31A-35-504.
Failure to pay bail bond forfeiture -- Grounds for suspension and
revocation of bail bond agency license.
(1) As used in this section:
(a) "Agency" means a bail bond agency.
(b) "Judgment" means a judgment of bail bond forfeiture issued under Section
77-20-505
.
(2) (a) (i) An agency shall pay a judgment not later than 15 days following service of
notice upon the agency from a prosecutor of the entry of the judgment.
(ii) An agency may pay a bail bond forfeiture to the court prior to judgment.
(b) (i) A prosecutor who does not receive proof of or notice of payment of the
judgment within 15 days after the service of notice to the agency of a judgment shall notify the
commissioner of the failure to pay the judgment.
(ii) The commissioner shall notify the agency, by the most expeditious means
available, of the nonpayment of the judgment.
(iii) The agency shall satisfy the judgment within five business days after receiving
notice under Subsection (2)(b)(ii). [
If the judgment is not satisfied at the end of the five days,
the commissioner may suspend the agency's license under Subsection (3).
]
(c) If notice of entry of judgment is served upon the agency by mail, three additional
days are added to the 15 days provided in Subsections (2)(a), (2)(b), and (2)(d).
(d) A prosecutor may not proceed under Subsection (2)(b) if an agency, within 15 days
after service of notice of the entry of judgment is served:
(i) files a motion to set aside the judgment or files an application for an extraordinary
writ; and
(ii) provides proof that the agency has posted the judgment amount with the court in
the form of cash, a cashier's check, or certified funds.
(e) As used in this section, the filing of the following tolls the time within which an
agency is required to pay a judgment if the motion or application is filed within 15 days after
the day on which service of notice of the entry of a judgment is served:
(i) a motion to set aside a judgment; or
(ii) an application for extraordinary writ.
(3) The commissioner shall suspend the license of the agency not later than five days
following the agency's failure to satisfy the judgment as required under Subsection (2)(b).
(4) If the prosecutor receives proof of or notice of payment of the judgment during the
suspension period under Subsection (3), the prosecutor shall immediately notify the
commissioner of the payment. The notice shall be in writing and by the most expeditious
means possible, including facsimile or other electronic means.
(5) The commissioner shall lift a suspension under Subsection (3) within five days of
the day on which all of the following conditions are met:
(a) the suspension has been in place for no fewer than 14 days;
(b) the commissioner has received written notice of payment of the unpaid forfeiture
from the prosecutor; and
(c) the commissioner has received:
(i) no other notice of any unpaid forfeiture from a prosecutor; or
(ii) if a notice of unpaid forfeiture is received, written notice from the prosecutor that
the unpaid forfeiture has been paid.
(6) The commissioner shall commence an administrative proceeding and revoke the
license of an agency that fails to meet the conditions under Subsection (5) within 60 days
following the initial date of suspension.
(7) This section does not restrict or otherwise affect the rights of a prosecutor to
commence collection proceedings under Subsection 
77-20-505
(5).
Section 20. Section 
31A-37-102
 is amended to read:
31A-37-102.
Definitions.
As used in this chapter:
(1) (a) "Affiliated company" means a business entity that because of common
ownership, control, operation, or management is in the same corporate or limited liability
company system as:
(i) a parent;
(ii) an industrial insured; or
(iii) a member organization.
(b) "Affiliated company" does not include a business entity for which the
commissioner issues an order finding that the business entity is not an affiliated company.
(2) "Alien captive insurance company" means an insurer:
(a) formed to write insurance business for a parent or affiliate of the insurer; and
(b) licensed pursuant to the laws of an alien or foreign jurisdiction that imposes
statutory or regulatory standards:
(i) on a business entity transacting the business of insurance in the alien or foreign
jurisdiction; and
(ii) in a form acceptable to the commissioner.
(3) "Applicant captive insurance company" means an entity that has submitted an
application for a certificate of authority for a captive insurance company, unless the application
has been denied or withdrawn.
(4) "Association" means a legal association of two or more persons that [
has been in
continuous existence for at least one year if
] 
meets the following requirements
:
(a) the persons are exposed to similar or related liability because of related, similar, or
common business trade, products, services, premises, or operations; and
(b)
 [
(a)
] 
(i)
 the association or [
its
] 
the association's
 member organizations:
[
(i)
] 
(A)
 own, control, or hold with power to vote all of the outstanding voting
securities of an association captive insurance company incorporated as a stock insurer; [
or
]
[
(ii)
] 
(B)
 have complete voting control over an association captive insurance company
incorporated as a mutual insurer; 
or
(C) have complete voting control over an association captive insurance company
formed as a limited liability company; or
[
(b)
] 
(ii)
 the association's member organizations collectively constitute all of the
subscribers of an association captive insurance company formed as a reciprocal insurer[
; or
]
.
[
(c) the association or the association's member organizations have complete voting
control over an association captive insurance company formed as a limited liability company.
]
(5) "Association captive insurance company" means a business entity that insures risks
of:
(a) a member organization of the association;
(b) an affiliate of a member organization of the association; and
(c) the association.
(6) "Branch business" means an insurance business transacted by a branch captive
insurance company in this state.
(7) "Branch captive insurance company" means an alien captive insurance company
that has a certificate of authority from the commissioner to transact the business of insurance in
this state through a captive insurance company that is domiciled outside of this state.
(8) "Branch operation" means a business operation of a branch captive insurance
company in this state.
(9) (a) "Captive insurance company" means the same as that term is defined in Section
31A-1-301
.
(b) "Captive insurance company" includes any of the following formed or holding a
certificate of authority under this chapter:
(i) a branch captive insurance company;
(ii) a pure captive insurance company;
(iii) an association captive insurance company;
(iv) a sponsored captive insurance company;
(v) an industrial insured captive insurance company, including an industrial insured
captive insurance company formed as a risk retention group captive in this state pursuant to the
provisions of the Federal Liability Risk Retention Act of 1986;
(vi) a special purpose captive insurance company; or
(vii) a special purpose financial captive insurance company.
(10) "Commissioner" means Utah's Insurance Commissioner or the commissioner's
designee.
(11) "Common ownership and control" means that two or more captive insurance
companies are owned or controlled by the same person or group of persons as follows:
(a) in the case of a captive insurance company that is a stock corporation, the direct or
indirect ownership of 80% or more of the outstanding voting stock of the stock corporation;
(b) in the case of a captive insurance company that is a mutual corporation, the direct
or indirect ownership of 80% or more of the surplus and the voting power of the mutual
corporation;
(c) in the case of a captive insurance company that is a limited liability company, the
direct or indirect ownership by the same member or members of 80% or more of the
membership interests in the limited liability company; or
(d) in the case of a sponsored captive insurance company, a protected cell is a separate
captive insurance company owned and controlled by the protected cell's participant, only if:
(i) the participant is the only participant with respect to the protected cell; and
(ii) the participant is the sponsor or is affiliated with the sponsor of the sponsored
captive insurance company through common ownership and control.
(12) "Consolidated debt to total capital ratio" means the ratio of Subsection (12)(a) to
(b).
(a) This Subsection (12)(a) is an amount equal to the sum of all debts and hybrid
capital instruments including:
(i) all borrowings from depository institutions;
(ii) all senior debt;
(iii) all subordinated debts;
(iv) all trust preferred shares; and
(v) all other hybrid capital instruments that are not included in the determination of
consolidated GAAP net worth issued and outstanding.
(b) This Subsection (12)(b) is an amount equal to the sum of:
(i) total capital consisting of all debts and hybrid capital instruments as described in
Subsection (12)(a); and
(ii) shareholders' equity determined in accordance with generally accepted accounting
principles for reporting to the United States Securities and Exchange Commission.
(13) "Consolidated GAAP net worth" means the consolidated shareholders' or
members' equity determined in accordance with generally accepted accounting principles for
reporting to the United States Securities and Exchange Commission.
(14) "Controlled unaffiliated business" means a business entity:
(a) (i) in the case of a pure captive insurance company, that is not in the corporate or
limited liability company system of a parent or the parent's affiliate; or
(ii) in the case of an industrial insured captive insurance company, that is not in the
corporate or limited liability company system of an industrial insured or an affiliated company
of the industrial insured;
(b) (i) in the case of a pure captive insurance company, that has a contractual
relationship with a parent or affiliate; or
(ii) in the case of an industrial insured captive insurance company, that has a
contractual relationship with an industrial insured or an affiliated company of the industrial
insured; and
(c) whose risks that are or will be insured by a pure captive insurance company, an
industrial insured captive insurance company, or both, are managed in accordance with
Subsection 
31A-37-106
(1)(j) by:
(i) (A) a pure captive insurance company; or
(B) an industrial insured captive insurance company; or
(ii) a parent or affiliate of:
(A) a pure captive insurance company; or
(B) an industrial insured captive insurance company.
(15) "Criminal act" means an act for which a person receives a verdict or finding of
guilt after a criminal trial or a plea of guilty or nolo contendere to a criminal charge.
(16) "Establisher" means a person who establishes a business entity or a trust.
(17) "Governing body" means the persons who hold the ultimate authority to direct and
manage the affairs of an entity.
(18) "Industrial insured" means an insured:
(a) that produces insurance:
(i) by the services of a full-time employee acting as a risk manager or insurance
manager; or
(ii) using the services of a regularly and continuously qualified insurance consultant;
(b) whose aggregate annual premiums for insurance on all risks total at least $25,000;
and
(c) that has at least 25 full-time employees.
(19) "Industrial insured captive insurance company" means a business entity that:
(a) insures risks of the industrial insureds that comprise the industrial insured group;
and
(b) may insure the risks of:
(i) an affiliated company of an industrial insured; or
(ii) a controlled unaffiliated business of:
(A) an industrial insured; or
(B) an affiliated company of an industrial insured.
(20) "Industrial insured group" means:
(a) a group of industrial insureds that collectively:
(i) own, control, or hold with power to vote all of the outstanding voting securities of
an industrial insured captive insurance company incorporated or organized as a limited liability
company as a stock insurer; or
(ii) have complete voting control over an industrial insured captive insurance company
incorporated or organized as a limited liability company as a mutual insurer;
(b) a group that is:
(i) created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. Sec. 3901
et seq., as amended, as a corporation or other limited liability association; and
(ii) taxable under this title as a:
(A) stock corporation; or
(B) mutual insurer; or
(c) a group that has complete voting control over an industrial captive insurance
company formed as a limited liability company.
(21) "Member organization" means a person that belongs to an association.
(22) "Parent" means a person that directly or indirectly owns, controls, or holds with
power to vote more than 50% of the outstanding securities of an organization.
(23) "Participant" means an entity that is insured by a sponsored captive insurance
company:
(a) if the losses of the participant are limited through a participant contract to the assets
of a protected cell; and
(b) (i) the entity is permitted to be a participant under Section 
31A-37-403
; or
(ii) the entity is an affiliate of an entity permitted to be a participant under Section
31A-37-403
.
(24) "Participant contract" means a contract by which a sponsored captive insurance
company:
(a) insures the risks of a participant; and
(b) limits the losses of the participant to the assets of a protected cell.
(25) "Protected cell" means a separate account established and maintained by a
sponsored captive insurance company for one participant.
(26) "Pure captive insurance company" means a business entity that insures risks of a
parent or affiliate of the business entity.
(27) "Special purpose financial captive insurance company" means the same as that
term is defined in Section 
31A-37a-102
.
(28) "Sponsor" means an entity that:
(a) meets the requirements of Section 
31A-37-402
; and
(b) is approved by the commissioner to:
(i) provide all or part of the capital and surplus required by applicable law in an amount
of not less than $350,000, which amount the commissioner may increase by order if the
commissioner considers it necessary; and
(ii) organize and operate a sponsored captive insurance company.
(29) "Sponsored captive insurance company" means a captive insurance company:
(a) in which the minimum capital and surplus required by applicable law is provided by
one or more sponsors;
(b) that is formed or holding a certificate of authority under this chapter;
(c) that insures the risks of a separate participant through the contract; and
(d) that segregates each participant's liability through one or more protected cells.
(30) "Treasury rates" means the United States Treasury strip asked yield as published
in the Wall Street Journal as of a balance sheet date.
Section 21. Section 
31A-37-202
 is amended to read:
31A-37-202.
Permissive areas of insurance.
(1) Except as provided in Subsections (2) and (3), a captive insurance company may
not directly insure a risk other than the risk of the captive insurance company's parent or
affiliated company.
(2) In addition to the risks described in Subsection (1), an association captive insurance
company may insure the risk of:
(a) a member organization of the association captive insurance company's association;
or
(b) an affiliate of a member organization of the association captive insurance
company's association.
(3) The following may insure a risk of a controlled unaffiliated business:
(a) an industrial insured captive insurance company;
(b) a protected cell;
(c) a pure captive insurance company; or
(d) a sponsored captive insurance company.
(4) To the extent allowed by a captive insurance company's organizational charter, a
captive insurance company may provide any type of insurance described in this title, except:
(a) workers' compensation insurance;
(b) personal motor vehicle insurance;
(c) homeowners' insurance; and
(d) any component of the types of insurance described in Subsections (4)(a) through
(c).
(5) A captive insurance company may not provide coverage for:
(a) a wager or gaming risk;
(b) loss of an election; or
(c) the penal consequences of a crime.
(6) Unless the punitive damages award arises out of a criminal act of an insured, a
captive insurance company may provide coverage for punitive damages awarded, including
through adjudication or compromise, against the captive insurance company's:
(a) parent; 
or
(b) affiliated company[
; or
]
.
[
(c) controlled unaffiliated business.
]
(7) Notwithstanding Subsection (4), if approved by the commissioner, a captive
insurance company may insure as a reimbursement a limited layer or deductible of workers'
compensation coverage.
Section 22. Section 
31A-37-204
 is amended to read:
31A-37-204.
Paid-in capital -- Other capital.
(1) (a) The commissioner may not issue a certificate of authority to a company
described in Subsection (1)(c) unless the company possesses and thereafter maintains
unimpaired paid-in capital and unimpaired paid-in surplus of:
(i) in the case of a pure captive insurance company[
,
]
:
(A) except as provided in Subsection (1)(a)(i)(B),
 not less than $250,000; 
or
(B) if the pure captive insurance company is not acting as a pool that facilitates risk
distribution for other captive insurers, an amount that is the greater of:
(I) not less than 20% of the company's total aggregate risk; or
(II) $50,000;
(ii) in the case of an association captive insurance company, not less than $750,000;
(iii) in the case of an industrial insured captive insurance company incorporated as a
stock insurer, not less than $700,000;
(iv) in the case of a sponsored captive insurance company, not less than $500,000, of
which a minimum of $200,000 is provided by the sponsor; or
(v) in the case of a special purpose captive insurance company, an amount determined
by the commissioner after giving due consideration to the company's business plan, feasibility
study, and pro-formas, including the nature of the risks to be insured.
(b) The paid-in capital and surplus required under this Subsection (1) may be in the
form of:
(i) (A) cash; or
(B) cash equivalent;
(ii) an irrevocable letter of credit:
(A) issued by:
(I) a bank chartered by this state; [
or
]
(II) a member bank of the Federal Reserve System; [
and
] 
or
(III) a member bank of the Federal Deposit Insurance Corporation;
(B) approved by the commissioner;
(iii) marketable securities as determined by Subsection (5); or
(iv) some other thing of value approved by the commissioner, for a period not to
exceed 45 days, to facilitate the formation of a captive insurance company in this state pursuant
to an approved plan of liquidation and reorganization of another captive insurance company or
alien captive insurance company in another jurisdiction.
(c) This Subsection (1) applies to:
(i) a pure captive insurance company;
(ii) a sponsored captive insurance company;
(iii) a special purpose captive insurance company;
(iv) an association captive insurance company; or
(v) an industrial insured captive insurance company.
(2) (a) The commissioner may, under Section 
31A-37-106
, prescribe additional capital
based on the type, volume, and nature of insurance business transacted.
(b) The capital prescribed by the commissioner under this Subsection (2) may be in the
form of:
(i) cash;
(ii) an irrevocable letter of credit issued by:
(A) a bank chartered by this state; or
(B) a member bank of the Federal Reserve System; or
(iii) marketable securities as determined by Subsection (5).
(3) (a) Except as provided in Subsection (3)(c), a branch captive insurance company, as
security for the payment of liabilities attributable to branch operations, shall, through its branch
operations, establish and maintain a trust fund:
(i) funded by an irrevocable letter of credit or other acceptable asset; and
(ii) in the United States for the benefit of:
(A) United States policyholders; and
(B) United States ceding insurers under:
(I) insurance policies issued; or
(II) reinsurance contracts issued or assumed.
(b) The amount of the security required under this Subsection (3) shall be no less than:
(i) the capital and surplus required by this chapter; and
(ii) the reserves on the insurance policies or reinsurance contracts, including:
(A) reserves for losses;
(B) allocated loss adjustment expenses;
(C) incurred but not reported losses; and
(D) unearned premiums with regard to business written through branch operations.
(c) Notwithstanding the other provisions of this Subsection (3):
(i) the commissioner may permit a branch captive insurance company that is required
to post security for loss reserves on branch business by its reinsurer to reduce the funds in the
trust account required by this section by the same amount as the security posted if the security
remains posted with the reinsurer; and
(ii) a branch captive insurance company that is the result of the licensure of an alien
captive insurance company that is not formed in an alien jurisdiction is not subject to the
requirements of this Subsection (3).
(4) (a) A captive insurance company may not pay the following without the prior
approval of the commissioner:
(i) a dividend out of capital or surplus in excess of the limits under Section
16-10a-640
; or
(ii) a distribution with respect to capital or surplus in excess of the limits under Section
16-10a-640
.
(b) The commissioner shall condition approval of an ongoing plan for the payment of
dividends or other distributions on the retention, at the time of each payment, of capital or
surplus in excess of:
(i) amounts specified by the commissioner under Section 
31A-37-106
; or
(ii) determined in accordance with formulas approved by the commissioner under
Section 
31A-37-106
.
(5) For purposes of this section, marketable securities means:
(a) a bond or other evidence of indebtedness of a governmental unit in the United
States or Canada or any instrumentality of the United States or Canada; or
(b) securities:
(i) traded on one or more of the following exchanges in the United States:
(A) New York;
(B) American; or
(C) NASDAQ;
(ii) when no particular security, or a substantially related security, applied toward the
required minimum capital and surplus requirement of Subsection (1) represents more than 50%
of the minimum capital and surplus requirement; and
(iii) when no group of up to four particular securities, consolidating substantially
related securities, applied toward the required minimum capital and surplus requirement of
Subsection (1) represents more than 90% of the minimum capital and surplus requirement.
(6) Notwithstanding Subsection (5), to protect the solvency and liquidity of a captive
insurance company, the commissioner may reject the application of specific assets or amounts
of specific assets to satisfying the requirement of Subsection (1).
Section 23. Section 
49-20-401
 is amended to read:
49-20-401.
Program -- Powers and duties.
(1) The program shall:
(a) act as a self-insurer of employee benefit plans and administer those plans;
(b) enter into contracts with private insurers or carriers to underwrite employee benefit
plans as considered appropriate by the program;
(c) indemnify employee benefit plans or purchase commercial reinsurance as
considered appropriate by the program;
(d) provide descriptions of all employee benefit plans under this chapter in cooperation
with covered employers;
(e) process claims for all employee benefit plans under this chapter or enter into
contracts, after competitive bids are taken, with other benefit administrators to provide for the
administration of the claims process;
(f) obtain an annual actuarial review of all health and dental benefit plans and a
periodic review of all other employee benefit plans;
(g) consult with the covered employers to evaluate employee benefit plans and develop
recommendations for benefit changes;
(h) annually submit a budget and audited financial statements to the governor and
Legislature that includes total projected benefit costs and administrative costs;
(i) maintain reserves sufficient to liquidate the unrevealed claims liability and other
liabilities of the employee benefit plans as certified by the program's consulting actuary;
(j) submit, in advance, the program's recommended benefit 
and rate
 adjustments for
state employees
, which may include actuarially substantiated member premium differentials
between networks
 to:
(i) the Legislature; and
(ii) the director of the state Division of Human Resource Management;
(k) determine benefits and rates, upon approval of the board, for multi-employer risk
pools, retiree coverage, and conversion coverage;
(l) determine benefits and rates based on the total estimated costs and the employee
premium share established by the Legislature, upon approval of the board, for state employees;
(m) administer benefits and rates, upon ratification of the board, for single-employer
risk pools;
(n) request proposals for one or more out-of-state provider networks and a dental
health plan administered by a third-party carrier at least once every three years for the purposes
of:
(i) stimulating competition for the benefit of covered individuals;
(ii) establishing better geographical coverage of medical care services; and
(iii) providing coverage for both active and retired covered individuals;
(o) for a proposal that meets the criteria specified in a request for proposals and is
accepted by the program:
(i) offer the proposal to active and retired state-covered individuals; and
(ii) at the option of the covered employer, offer the proposal to active and retired
covered individuals of other covered employers;
(p) perform the same functions established in Subsections (1)(a), (b), (e), and (h) for
the Department of Health 
and Human Services
 if the program provides program benefits to
children enrolled in the Utah Children's Health Insurance Program created in Title 26, Chapter
40, Utah Children's Health Insurance Act;
(q) establish rules and procedures governing the admission of political subdivisions or
educational institutions and their employees to the program;
(r) (i) contract directly with medical providers to provide services for covered
individuals at commercially competitive rates; and
(ii) (A) discontinue the preferred network, which offers in-network access to all
in-state hospitals, for the state risk pool created in Subsection 
49-20-202
(1)(a) for plan years
starting on or after July 1, 2022; and
(B) for an employee in the state risk pool who fails to elect one of the remaining
networks before July 1, 2022, enroll the employee and the employee's dependents into the
network that best reflects the utilization pattern of that employee and the employee's
dependents;
(s) (i) require state employees and the state employees' dependents to participate in the
electronic exchange of clinical health records in accordance with Section 
26-1-37
 unless the
enrollee opts out of participation; and
(ii) prior to enrolling the state employee, each time the state employee logs onto the
program's website, and each time the enrollee receives written enrollment information from the
program, provide notice to the enrollee of the enrollee's participation in the electronic exchange
of clinical health records and the option to opt out of participation at any time;
(t) at the request of a procurement unit, as that term is defined in Section 
63G-6a-103
,
that administers benefits to program recipients who are not covered by Title 26, Utah Health
Code, provide services for:
(i) drugs;
(ii) medical devices; or
(iii) other types of medical care; and
(u) take additional actions necessary or appropriate to carry out the purposes of this
chapter.
(2) (a) Funds budgeted and expended shall accrue from rates paid by the covered
employers and covered individuals.
(b) The board shall approve administrative costs and report the administrative costs to
the governor and the Legislature.
(3) The Division of Human Resource Management shall include the benefit 
and rate
adjustments described in Subsection (1)(j) in the total compensation plan recommended to the
governor required under Subsection 
63A-17-307
(5)(a).
(4) The program may establish a partnership with a public entity in a different state to
purchase or share services related to the administration of medical benefits if:
(a) the program receives approval for the partnership from the board; and
(b) the partnership:
(i) creates cost savings for Utah;
(ii) does not commingle state funds with funds of the public entity in the other state;
and
(iii) does not pose a greater actuarial risk to Utah than the program has already
assumed.
Section 24. Section 
63J-1-602.1
 is amended to read:
63J-1-602.1.
List of nonlapsing appropriations from accounts and funds.
Appropriations made from the following accounts or funds are nonlapsing:
(1) The Utah Intracurricular Student Organization Support for Agricultural Education
and Leadership Restricted Account created in Section 
4-42-102
.
(2) The Native American Repatriation Restricted Account created in Section 
9-9-407
.
(3) The Martin Luther King, Jr. Civil Rights Support Restricted Account created in
Section 
9-18-102
.
(4) The National Professional Men's Soccer Team Support of Building Communities
Restricted Account created in Section 
9-19-102
.
(5) Funds collected for directing and administering the C-PACE district created in
Section 
11-42a-106
.
(6) Money received by the Utah Inland Port Authority, as provided in Section
11-58-105
.
(7) The "Latino Community Support Restricted Account" created in Section 
13-1-16
.
(8) The Clean Air Support Restricted Account created in Section 
19-1-109
.
(9) The Division of Air Quality Oil, Gas, and Mining Restricted Account created in
Section 
19-2a-106
.
(10) The Division of Water Quality Oil, Gas, and Mining Restricted Account created in
Section 
19-5-126
.
(11) The "Support for State-Owned Shooting Ranges Restricted Account" created in
Section 
23-14-13.5
.
(12) Award money under the State Asset Forfeiture Grant Program, as provided under
Section 
24-4-117
.
(13) Funds collected from the program fund for local health department expenses
incurred in responding to a local health emergency under Section 
26-1-38
.
(14) The Children with Cancer Support Restricted Account created in Section
26-21a-304
.
(15) State funds for matching federal funds in the Children's Health Insurance Program
as provided in Section 
26-40-108
.
(16) The Children with Heart Disease Support Restricted Account created in Section
26-58-102
.
(17) The Technology Development Restricted Account created in Section 
31A-3-104
.
(18) The Criminal Background Check Restricted Account created in Section
31A-3-105
.
(19) The Captive Insurance Restricted Account created in Section 
31A-3-304
, except
to the extent that Section 
31A-3-304
 makes the money received under that section free revenue.
(20) The Title Licensee Enforcement Restricted Account created in Section
31A-23a-415
.
(21) The Health Insurance Actuarial Review Restricted Account created in Section
31A-30-115
.
(22) The State Mandated Insurer Payments Restricted Account created in Section
31A-30-118
.
[
(22)
] 
(23)
 The Insurance Fraud Investigation Restricted Account created in Section
31A-31-108
.
[
(23)
] 
(24)
 The Underage Drinking Prevention Media and Education Campaign
Restricted Account created in Section 
32B-2-306
.
[
(24)
] 
(25)
 The Drinking While Pregnant Prevention Media and Education Campaign
Restricted Account created in Section 
32B-2-308
.
[
(25)
] 
(26)
 The School Readiness Restricted Account created in Section 
35A-15-203
.
[
(26)
] 
(27)
 Money received by the Utah State Office of Rehabilitation for the sale of
certain products or services, as provided in Section 
35A-13-202
.
[
(27)
] 
(28)
 The Oil and Gas Administrative Penalties Account created in Section
40-6-11
.
[
(28)
] 
(29)
 The Oil and Gas Conservation Account created in Section 
40-6-14.5
.
[
(29)
] 
(30)
 The Division of Oil, Gas, and Mining Restricted account created in Section
40-6-23
.
[
(30)
] 
(31)
 The Electronic Payment Fee Restricted Account created by Section
41-1a-121
 to the Motor Vehicle Division.
[
(31)
] 
(32)
 The Motor Vehicle Enforcement Division Temporary Permit Restricted
Account created by Section 
41-3-110
 to the State Tax Commission.
[
(32)
] 
(33)
 The Utah Law Enforcement Memorial Support Restricted Account created
in Section 
53-1-120
.
[
(33)
] 
(34)
 The State Disaster Recovery Restricted Account to the Division of
Emergency Management, as provided in Section 
53-2a-603
.
[
(34)
] 
(35)
 The Post Disaster Recovery and Mitigation Restricted Account created in
Section 
53-2a-1302
.
[
(35)
] 
(36)
 The Department of Public Safety Restricted Account to the Department of
Public Safety, as provided in Section 
53-3-106
.
[
(36)
] 
(37)
 The Utah Highway Patrol Aero Bureau Restricted Account created in
Section 
53-8-303
.
[
(37)
] 
(38)
 The DNA Specimen Restricted Account created in Section 
53-10-407
.
[
(38)
] 
(39)
 The Canine Body Armor Restricted Account created in Section 
53-16-201
.
[
(39)
] 
(40)
 The Technical Colleges Capital Projects Fund created in Section
53B-2a-118
.
[
(40)
] 
(41)
 The Higher Education Capital Projects Fund created in Section
53B-22-202
.
[
(41)
] 
(42)
 A certain portion of money collected for administrative costs under the
School Institutional Trust Lands Management Act, as provided under Section 
53C-3-202
.
[
(42)
] 
(43)
 The Public Utility Regulatory Restricted Account created in Section
54-5-1.5
, subject to Subsection 
54-5-1.5
(4)(d).
[
(43)
] 
(44)
 Funds collected from a surcharge fee to provide certain licensees with
access to an electronic reference library, as provided in Section 
58-3a-105
.
[
(44)
] 
(45)
 Certain fines collected by the Division of Professional Licensing for
violation of unlawful or unprofessional conduct that are used for education and enforcement
purposes, as provided in Section 
58-17b-505
.
[
(45)
] 
(46)
 Funds collected from a surcharge fee to provide certain licensees with
access to an electronic reference library, as provided in Section 
58-22-104
.
[
(46)
] 
(47)
 Funds collected from a surcharge fee to provide certain licensees with
access to an electronic reference library, as provided in Section 
58-55-106
.
[
(47)
] 
(48)
 Funds collected from a surcharge fee to provide certain licensees with
access to an electronic reference library, as provided in Section 
58-56-3.5
.
[
(48)
] 
(49)
 Certain fines collected by the Division of Professional Licensing for use in
education and enforcement of the Security Personnel Licensing Act, as provided in Section
58-63-103
.
[
(49)
] 
(50)
 The Relative Value Study Restricted Account created in Section 
59-9-105
.
[
(50)
] 
(51)
 The Cigarette Tax Restricted Account created in Section 
59-14-204
.
[
(51)
] 
(52)
 Funds paid to the Division of Real Estate for the cost of a criminal
background check for a mortgage loan license, as provided in Section 
61-2c-202
.
[
(52)
] 
(53)
 Funds paid to the Division of Real Estate for the cost of a criminal
background check for principal broker, associate broker, and sales agent licenses, as provided
in Section 
61-2f-204
.
[
(53)
] 
(54)
 Certain funds donated to the Department of Health and Human Services, as
provided in Section 
26B-1-202
.
[
(54)
] 
(55)
 The National Professional Men's Basketball Team Support of Women and
Children Issues Restricted Account created in Section 
26B-1-302
.
[
(55)
] 
(56)
 Certain funds donated to the Division of Child and Family Services, as
provided in Section 
80-2-404
.
[
(56)
] 
(57)
 The Choose Life Adoption Support Restricted Account created in Section
80-2-502
.
[
(57)
] 
(58)
 Funds collected by the Office of Administrative Rules for publishing, as
provided in Section 
63G-3-402
.
[
(58)
] 
(59)
 The Immigration Act Restricted Account created in Section 
63G-12-103
.
[
(59)
] 
(60)
 Money received by the military installation development authority, as
provided in Section 
63H-1-504
.
[
(60)
] 
(61)
 The Computer Aided Dispatch Restricted Account created in Section
63H-7a-303
.
[
(61)
] 
(62)
 The Unified Statewide 911 Emergency Service Account created in Section
63H-7a-304
.
[
(62)
] 
(63)
 The Utah Statewide Radio System Restricted Account created in Section
63H-7a-403
.
[
(63)
] 
(64)
 The Utah Capital Investment Restricted Account created in Section
63N-6-204
.
[
(64)
] 
(65)
 The Motion Picture Incentive Account created in Section 
63N-8-103
.
[
(65)
] 
(66)
 Certain money payable for expenses of the Pete Suazo Utah Athletic
Commission, as provided under Section 
63N-10-301
.
[
(66)
] 
(67)
 Funds collected by the housing of state probationary inmates or state parole
inmates, as provided in Subsection 
64-13e-104
(2).
[
(67)
] 
(68)
 Certain forestry and fire control funds utilized by the Division of Forestry,
Fire, and State Lands, as provided in Section 
65A-8-103
.
[
(68)
] 
(69)
 The Amusement Ride Safety Restricted Account, as provided in Section
72-16-204
.
[
(69)
] 
(70)
 Certain funds received by the Office of the State Engineer for well drilling
fines or bonds, as provided in Section 
73-3-25
.
[
(70)
] 
(71)
 The Water Resources Conservation and Development Fund, as provided in
Section 
73-23-2
.
[
(71)
] 
(72)
 Funds donated or paid to a juvenile court by private sources, as provided in
Subsection 
78A-6-203
(1)(c).
[
(72)
] 
(73)
 Fees for certificate of admission created under Section 
78A-9-102
.
[
(73)
] 
(74)
 Funds collected for adoption document access as provided in Sections
78B-6-141
, 
78B-6-144
, and 
78B-6-144.5
.
[
(74)
] 
(75)
 Funds collected for indigent defense as provided in Title 78B, Chapter 22,
Part 4, Utah Indigent Defense Commission.
[
(75)
] 
(76)
 The Utah Geological Survey Oil, Gas, and Mining Restricted Account
created in Section 
79-3-403
.
[
(76)
] 
(77)
 Revenue for golf user fees at the Wasatch Mountain State Park, Palisades
State Park, and Green River State Park, as provided under Section 
79-4-403
.
[
(77)
] 
(78)
 Funds donated as described in Section 
41-1a-422
 for the State Park Fees
Restricted Account created in Section 
79-4-402
 for support of the Division of State Parks' dark
sky initiative.
[
(78)
] 
(79)
 Certain funds received by the Division of State Parks from the sale or
disposal of buffalo, as provided under Section 
79-4-1001
.