Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 215 First Substitute (2023GS)

Sponsor

Sen. Weiler, T.

Final action

Senate/ filed 3/3/2023

Outcome

Failed / filed without passage

Summary

What it does

• This bill:
• defines terms;
• adds to the type of actions that are considered an unfair claim settlement practice by an insurance adjuster; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

INSURANCE ADJUSTER CLAIM AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Todd D. Weiler
House Sponsor: 
____________
LONG TITLE
General Description:
This bill modifies provisions related to insurance adjuster claim practices.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ adds to the type of actions that are considered an unfair claim settlement practice by
an insurance adjuster; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-26-102
, as last amended by Laws of Utah 2021, Chapter 252
31A-26-303
, as last amended by Laws of Utah 1987, Chapter 91
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
31A-26-102
 is amended to read:
31A-26-102.
Definitions.
As used in this chapter, unless expressly provided otherwise:
(1) "Company adjuster" means a person employed by an insurer who negotiates or
settles claims on behalf of the insurer or an affiliated insurer.
(2) "Designated home state" means the state or territory of the United States or the
District of Columbia:
(a) in which an insurance adjuster does not maintain the adjuster's principal:
(i) place of residence; or
(ii) place of business;
(b) if the resident state, territory, or District of Columbia of the adjuster does not
license adjusters for the line of authority sought, the adjuster has qualified for the license as if
the person were a resident in the state, territory, or District of Columbia described in
Subsection (2)(a), including an applicable:
(i) examination requirement;
(ii) fingerprint background check requirement; and
(iii) continuing education requirement; and
(c) that the adjuster has designated as the insurance adjuster's designated home state.
(3) "Home state" means:
(a) a state or territory of the United States or the District of Columbia in which an
insurance adjuster:
(i) maintains the adjuster's principal:
(A) place of residence; or
(B) place of business; and
(ii) is licensed to act as a resident adjuster; or
(b) if the resident state, territory, or the District of Columbia described in Subsection
(3)(a) does not license adjusters for the line of authority sought, a state, territory, or the District
of Columbia:
(i) in which the adjuster is licensed;
(ii) in which the adjuster is in good standing; and
(iii) that the adjuster has designated as the adjuster's designated home state.
(4) "Independent adjuster" means an insurance adjuster required to be licensed under
Section 
31A-26-201
, who engages in insurance adjusting as a representative of one or more
insurers.
(5) "Insurance adjusting" or "adjusting" means directing or conducting the
investigation, negotiation, or settlement of a claim under an insurance policy, on behalf of an
insurer, policyholder, or a claimant under an insurance policy.
(6) (a) "Organization" means a person other than a natural person.
(b) "Organization" includes a sole proprietorship by which a natural person does
business under an assumed name.
(7) "Portable electronics insurance" means the same as that term is defined in Section
31A-22-1802
.
(8) "Public adjuster" means a person required to be licensed under Section
31A-26-201
, who engages in insurance adjusting as a representative of insureds and claimants
under insurance policies.
(9) (a) "Subrogation" means the assumption of the right to pursue an obligation owed
by a debtor to the original creditor.
(b) "Subrogation" does not include:
(i) a claim under a contract to repay benefits from compensation received from a
responsible third party; or
(ii) a lien created under applicable statute or a contract.
Section 2. Section 
31A-26-303
 is amended to read:
31A-26-303.
Unfair claim settlement practices.
(1) [
No
] 
An
 insurer or person representing an insurer may 
not
 engage in any unfair
claim settlement practice under [
Subsections (2), (3), and (4)
] 
Subsection (2), (3), or (4)
.
(2) Each of the following acts is an unfair claim settlement practice:
(a) knowingly misrepresenting material facts or the contents of insurance policy
provisions at issue in connection with a claim under an insurance contract; however, this
provision does not include the failure to disclose information;
(b) attempting to use a policy application which was altered by the insurer without
notice to, or knowledge, or consent of, the insured as the basis for settling or refusing to settle a
claim; [
or
]
(c) failing to settle a claim promptly under one portion of the insurance policy
coverage, where liability and the amount of loss are reasonably clear, in order to influence
settlements under other portions of the insurance policy coverage, but this Subsection (2)(c)
applies only to claims made by persons in direct privity of contract with the insurer[
.
]
;
(d) separately paying a portion of settlement funds other than by subrogation to a
lienholder or a party claiming entitlement to reimbursement;
(e) insisting on including a lienholder or party claiming entitlement to reimbursement
other than by subrogation as a payee on instruments used to pay settlement funds; or
(f) refusing to promptly issue settlement funds without naming a lienholder or party
claiming entitlement to reimbursement other than by subrogation if the person receiving the
settlement:
(i) accepts liability for the satisfaction of liens or claims of entitlement to
reimbursement; and
(ii) agrees to hold the insurer and insured harmless from the liens and claims.
(3) Each of the following is an unfair claim settlement practice if committed or
performed with such frequency as to indicate a general business practice by an insurer or
persons representing an insurer:
(a) failing to acknowledge and act promptly upon communications about claims under
insurance policies;
(b) failing to adopt and implement reasonable standards for the prompt investigation
and processing of claims under insurance policies;
(c) compelling insureds to institute litigation to recover amounts due under an
insurance policy by offering substantially less than the amounts ultimately recovered in actions
brought by those insureds when the amounts claimed were reasonably near to the amounts
recovered;
(d) failing, after payment of a claim, to inform insureds or beneficiaries, upon request
by them, of the coverage under which payment was made;
(e) failing to promptly provide to the insured a reasonable explanation of the basis for
denial of a claim or for the offer of a compromise settlement;
(f) appealing from substantially all arbitration awards in favor of insureds for the
purpose of compelling them to accept settlements or compromises for less than the amount
awarded in arbitration;
(g) delaying the investigation or payment of claims by requiring an insured, claimant,
or the physician of either to submit a preliminary claim report and then requiring the
subsequent submission of formal proof of loss forms which contain substantially the same
information; or
(h) not attempting in good faith to effectuate a prompt, fair, and equitable settlement of
claims in which liability is reasonably clear.
(4) The commissioner may define by rule[
,
] 
made in accordance with Title 63G,
Chapter 3, Utah Administrative Rulemaking Act,
 acts or general business practices which are
unfair claim settlement practices, after a finding that those practices are misleading, deceptive,
unfairly discriminatory, overreaching, or an unreasonable restraint on competition.
(5) This section does not create any private cause of action.