Title 31A. Insurance Code Chapter 1 General Provisions Part 1

Utah Code

Page 1

Title 31A. Insurance Code

Chapter 1

General Provisions

Part 1

Purposes, Scope, and Application

31A-1-101 Short title.

This title is known as the "Insurance Code."

Enacted by Chapter 242, 1985 General Session

31A-1-102 Purposes.

The purposes of the Insurance Code are to:

(1) ensure the solidity of insurers doing business in Utah;

(2) ensure that policyholders, claimants, and insurers are treated fairly and equitably;

(3) ensure that Utah has an adequate and healthy insurance market, characterized by competitive

conditions, the spirit of innovation, and the exercise of initiative;

(4) provide for an insurance department that is expert in the field of insurance and able to enforce

the Insurance Code effectively;

(5) encourage cooperation between the Insurance Department and other Utah regulatory bodies,

as well as other federal and state governmental entities;

(6) preserve and improve state regulation of insurance;

(7) maintain freedom of contract and enterprise;

(8) encourage self regulation of the insurance industry;

(9) encourage loss prevention as part of the insurance industry;

(10) keep the public informed on insurance matters; and

(11) achieve other purposes stated elsewhere in the Insurance Code.

Enacted by Chapter 242, 1985 General Session

31A-1-103 Scope and applicability of title.

(1) This title does not apply to:

(a) a retainer contract made by an attorney-at-law:

(i) with an individual client; and

(ii) under which fees are based on estimates of the nature and amount of services to be

provided to the specific client;

(b) a contract similar to a contract described in Subsection (1)(a) made with a group of clients

involved in the same or closely related legal matters;

advice on simple legal matters, either alone or in combination with referral services, or the

promise of fee discounts for handling other legal matters;

(d) limited legal assistance on an informal basis involving neither an express contractual

obligation nor reasonable expectations, in the context of an employment, membership,

educational, or similar relationship;

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(e) legal assistance by employee organizations to their members in matters relating to

employment;

(f) death, accident, health, or disability benefits provided to a person by an organization or its

affiliate if:

(i) the organization is tax exempt under Section 501(c)(3) of the Internal Revenue Code and

has had its principal place of business in Utah for at least five years;

(ii) the person is not an employee of the organization; and

(iii)

(A) substantially all the person's time in the organization is spent providing voluntary services:

(I) in furtherance of the organization's purposes;

(II) for a designated period of time; and

(III) for which no compensation, other than expenses, is paid; or

(B) the time since the service under Subsection (1)(f)(iii)(A) was completed is no more than

18 months; or

(g) a prepaid contract of limited duration that provides for scheduled maintenance only.

(2)

(a) This title restricts otherwise legitimate business activity.

(b) What this title does not prohibit is permitted unless contrary to other provisions of Utah law.

(3) Except as otherwise expressly provided, this title does not apply to:

(a) those activities of an insurer where state jurisdiction is preempted by Section 514 of the

federal Employee Retirement Income Security Act of 1974, as amended;

(b) ocean marine insurance;

(i) has as the organization's principal purpose to achieve charitable, educational, social, or

religious objectives rather than to provide death, accident, health, or disability benefits;

(ii) does not incur a legal obligation to pay a specified amount;

(iii) does not create reasonable expectations of receiving a specified amount on the part of an

insured person; and

(iv) is not a health care sharing ministry that provides that a participant make a contribution to

pay another participant's qualified expenses with no assumption of risk or promise to pay.

(d) other business specified in rules adopted by the commissioner on a finding that:

(i) the transaction of the business in this state does not require regulation for the protection of

the interests of the residents of this state; or

(ii) it would be impracticable to require compliance with this title;

(e) except as provided in Subsection (4), a transaction independently procured through

negotiations under Section 31A-15-104;

(f) self-insurance;

(g) reinsurance;

(h) subject to Subsection (5), an employee or labor union group insurance policy covering risks in

this state or an employee or labor union blanket insurance policy covering risks in this state,

if:

(i) the policyholder exists primarily for purposes other than to procure insurance;

(ii) the policyholder:

(A) is not a resident of this state;

(B) is not a domestic corporation; or

(iii) no more than 25% of the certificate holders or insureds are residents of this state;

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(iv) on request of the commissioner, the insurer files with the department a copy of the policy

and a copy of each form or certificate; and

(v)

(A) the insurer agrees to pay premium taxes on the Utah portion of the insurer's business, as

if the insurer were authorized to do business in this state; and

(B) the insurer provides the commissioner with the security the commissioner considers

necessary for the payment of premium taxes under Title 59, Chapter 9, Taxation of

Admitted Insurers;

(i) to the extent provided in Subsection (6):

(i) a manufacturer's or seller's warranty; and

(ii) a manufacturer's or seller's service contract;

(j) except to the extent provided in Subsection (7), a public agency insurance mutual;

(k) except as provided in Chapter 6b, Guaranteed Asset Protection Waiver Act, a guaranteed

asset protection waiver; or

(l) a health care sharing ministry, if the health care sharing ministry:

(i) provides to each participant upon enrollment and annually thereafter a written statement

of nationwide data from the preceding calendar year that lists the total dollar amount of

contributions provided to participants toward qualified expenses; and

(ii) includes a written disclaimer, titled "Notice", on or with each application and all guideline

materials that states:

(A) the health care sharing ministry is not an insurance company;

(B) nothing the health care sharing ministry offers or provides is an insurance policy, including

the health care sharing ministry's guidelines or plan of operations;

compelled by law to contribute to another participant's expenses;

(D) participation in the health care sharing ministry or subscription to any of the health care

sharing ministry's services is not insurance; and

(E) each participant is always personally responsible for the participant's expenses regardless

of whether the participant receives payment for the expenses through the health care

sharing ministry or whether this health care sharing ministry continues to operate.

(4) A transaction described in Subsection (3)(e) is subject to taxation under Section 31A-3-301.

(5)

(a) After a hearing, the commissioner may order an insurer of certain group insurance policies

or blanket insurance policies to transfer the Utah portion of the business otherwise exempted

under Subsection (3)(h) to an authorized insurer if the contracts have been written by an

unauthorized insurer.

(b) If the commissioner finds that the conditions required for the exemption of a group or blanket

insurer are not satisfied or that adequate protection to residents of this state is not provided,

the commissioner may require:

(i) the insurer to be authorized to do business in this state; or

(ii) that any of the insurer's transactions be subject to this title.

insurance.

(6)

(a) As used in Subsection (3)(i) and this Subsection (6):

(i) "manufacturer's or seller's service contract" means a service contract:

(A) made available by:

(I) a manufacturer of a product;

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(II) a seller of a product; or

(III) an affiliate of a manufacturer or seller of a product;

(B) made available:

(I) on one or more specific products; or

(II) on products that are components of a system; and

provided under the service contract including, if the manufacturer's or seller's service

contract designates, providing parts and labor;

(ii) "manufacturer's or seller's warranty" means the guaranty of:

(A)

(I) the manufacturer of a product;

(II) a seller of a product; or

(III) an affiliate of a manufacturer or seller of a product;

(B)

(I) on one or more specific products; or

(II) on products that are components of a system; and

be provided under the warranty, including, if the manufacturer's or seller's warranty

designates, providing parts and labor; and

(iii) "service contract" means the same as that term is defined in Section 31A-6a-101.

(b) A manufacturer's or seller's warranty may be designated as:

(i) a warranty;

(ii) a guaranty; or

(iii) a term similar to a term described in Subsection (6)(b)(i) or (ii).

(i) a manufacturer's or seller's warranty;

(ii) a manufacturer's or seller's service contract paid for with consideration that is in addition to

the consideration paid for the product itself; and

(iii) a service contract that is not a manufacturer's or seller's warranty or manufacturer's or

seller's service contract if:

(A) the service contract is paid for with consideration that is in addition to the consideration

paid for the product itself;

(B) the service contract is for the repair or maintenance of goods;

(D) the product is not a motor vehicle; and

(E) the product is not the subject of a home warranty service contract.

(d) This title does not apply to a manufacturer's or seller's warranty or service contract paid for

with consideration that is in addition to the consideration paid for the product itself regardless

of whether the manufacturer's or seller's warranty or service contract is sold:

(i) at the time of the purchase of the product; or

(ii) at a time other than the time of the purchase of the product.

(7)

(a) For purposes of this Subsection (7), "public agency insurance mutual" means an entity

formed by two or more political subdivisions or public agencies of the state:

(i) under Title 11, Chapter 13, Interlocal Cooperation Act; and

(ii) for the purpose of providing for the political subdivisions or public agencies:

(A) subject to Subsection (7)(b), insurance coverage; or

(B) risk management.

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(b) Notwithstanding Subsection (7)(a)(ii)(A), a public agency insurance mutual may not provide

health insurance unless the public agency insurance mutual provides the health insurance

using:

(i) a third party administrator licensed under Chapter 25, Third Party Administrators;

(ii) an admitted insurer; or

(iii) a program authorized by Title 49, Chapter 20, Public Employees' Benefit and Insurance

Program Act.

(d) A public agency insurance mutual is considered to be a governmental entity and political

subdivision of the state with all of the rights, privileges, and immunities of a governmental

entity or political subdivision of the state including all the rights and benefits of Title 63G,

Chapter 7, Governmental Immunity Act of Utah.

Amended by Chapter 120, 2024 General Session

31A-1-104 Authorization to do insurance business.

A person may not engage in the following without complying with this title:

(1) do an insurance business as defined under Section 31A-1-301;

(2) act as an insurance producer or consultant as defined under Section 31A-1-301; or

(3) engage in insurance adjusting as defined under Section 31A-26-102.

Amended by Chapter 298, 2003 General Session

31A-1-105 Presumption of jurisdiction.

(1) Any insurer that provides coverage of a resident of this state, property located in this state,

or a business activity conducted in this state, or that engages in any activity described in

Subsections 31A-15-102(2)(a) through (h), is:

(a) doing an insurance business in this state; and

(b) subject to the jurisdiction of the insurance commissioner and the courts of this state under

Sections 31A-2-309 and 31A-2-310 to the extent of that coverage or activity.

(2) Any person doing or purporting to do an insurance business in this state as defined in Section

31A-1-301 is subject to the jurisdiction of the insurance commissioner and this title, unless the

insurer can establish that the exemptions of Section 31A-1-103 apply.

(3) This section does not limit the jurisdiction of the courts of this state under other applicable law.

Amended by Chapter 363, 2017 General Session

31A-1-106 Residual unlicensed domestic insurers.

(1) Every person doing an insurance business in Utah not covered under another section of this

title, that does not hold a valid certificate of authority or license under this title shall, by July

1, 1987, complete one of the actions prescribed in Subsections (2) through (5). This section

does not apply to an unauthorized foreign insurer doing an insurance business in Utah in full

compliance with Section 31A-15-103.

(2) An insurer under Subsection (1) may incorporate and apply, or if already incorporated, may

apply for a certificate of authority 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.

If the commissioner is satisfied that the insurer substantially complies with the requirements

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of the appropriate chapter necessary for the protection of insureds and the public, the

commissioner shall issue a certificate of authority.

(3) An insurer under Subsection (1) may transfer all its obligations to a corporation authorized

under this title to assume them, according to a plan approved by the commissioner. The

commissioner may disapprove the plan on a finding, after a hearing, that it is contrary to the

interests of insureds, the public, or the law.

(4) An insurer under Subsection (1) may adopt a plan to run off existing obligations without

accepting any new policyholders or new obligations. The commissioner may disapprove the

plan on a finding, after a hearing, that it is contrary to the interests of insureds, the public, or the

law.

(5) The commissioner may, by order, exempt an insurer from the requirements of Subsection (1) or

extend the deadline under Subsection (1) on a finding that:

(a) incorporation, licensing, reinsurance, or run off would cause disproportionate expense, loss,

or substantial hardship; and

(b) the nature of the existing and prospective business, the assets, or the business plan of the

insurer can be reasonably expected to continue to operate in a sound manner and can be

subjected to adequate regulatory controls.

(6) Whenever the commissioner grants an exemption under Subsection (5), the commissioner

shall issue to the insurer a certificate of authority. The commissioner may amend the certificate

at any time, specifying the business that the insurer may transact and specifying in detail the

controls to which the insurer shall be subject. These controls shall correspond as nearly as

practicable to the controls applicable to corporations transacting a like business.

(7) It is a ground for liquidation under Section 31A-27a-207 if an insurer has not completed action

under one of Subsections (2) through (4) and has not applied for and been granted exemption

under Subsection (5) before July 1, 1987.

Amended by Chapter 340, 2011 General Session

31A-1-107 Licensees under former Title 31.

Every holder of a license under former Title 31, Insurance, at the time Title 31A, Insurance

Code, takes effect shall continue to be a licensee of the Insurance Department, subject to the

provisions of this title. If a licensee must make changes in its articles, bylaws, or manner of doing

business to be in full compliance with this title, and the transition is not specifically provided for

under this title, the licensee shall apply for, and the commissioner shall automatically grant, a

reasonable, but determinate, time period to enable the licensee to conform to this title.

Amended by Chapter 204, 1986 General Session

31A-1-108 Corporations in the process of organizing.

Corporations in the process of organizing on July 1, 1986, may continue to organize under

former Title 31, Insurance. Any corporation so organizing that does not obtain a certificate of

authority by July 1, 1987, shall make appropriate refunds and reimbursements to subscribers,

incorporators, and creditors in accordance with a plan approved by the commissioner. This plan

shall specify the date that the legal existence of the corporation terminates.

Enacted by Chapter 242, 1985 General Session

31A-1-109 Name of licensee.

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(1) The name of any licensee who is not a natural person may not be the same as or deceptively

similar to the name of any licensee existing under the laws of the state or licensee authorized to

transact business in this state.

(2) Notwithstanding Subsection (1), the department may authorize the use of a name that is

deceptively similar to the name of a licensee described in Subsection (1) if the name requested

is not identical with any name already on file and either:

(a) the owner of the other name consents to the use with the department; or

(b) the department is provided a certified copy of the final judgment of a court of competent

jurisdiction establishing the applicant's right to use the name in this state.

Enacted by Chapter 344, 1995 General Session

31A-1-110 Scope of a license.

Unless a license is designated as limited, a license authorizes the person holding the license to

transact business for all products within a line of authority.

Enacted by Chapter 298, 2003 General Session

Part 2

Construction and Interpretation

31A-1-201 Construction.

(1) This code shall be liberally construed to achieve the purposes stated in Section 31A-1-102 and

under other chapters of the Insurance Code. The statements of purpose shall aid and guide

interpretation but are not independent sources of power.

(2) A provision of the Insurance Code relating to a particular kind of insurance or a particular

type of insurer prevails over a provision relating to insurance or insurers in general if there is

inconsistency between them.

Enacted by Chapter 242, 1985 General Session

31A-1-202 Effect of repeal of former provisions.

(1) The repeal of any statute by this title does not affect any right accrued or established, or any

liability or penalty incurred under the repealed statute.

(2) An action or proceeding commenced under any law repealed by this title is not affected by the

repeal. However, all procedures followed or sanctions imposed after the repeal of Title 31,

Insurance, shall conform to this title as far as possible.

Amended by Chapter 91, 1987 General Session

31A-1-203 Interpretive rules.

References under Section 31A-1-301 to particular sections do not limit application to those

sections but merely indicate a place where a term is especially relevant.

Enacted by Chapter 242, 1985 General Session

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31A-1-205 Severability.

If any provision of this title, or the application of any provision of this title to any person or

circumstance, is held invalid, the remainder of this title shall be given effect without the invalid

provision or application.

Enacted by Chapter 204, 1986 General Session

Part 3

Definitions

31A-1-301 Definitions.

As used in this title, unless otherwise specified:

(1)

(a) "Accident and health insurance" means insurance to provide protection against economic

losses resulting from:

(i) a medical condition including:

(A) a medical care expense; or

(B) the risk of disability;

(ii) accident; or

(iii) sickness.

(b) "Accident and health insurance":

(i) includes a contract with disability contingencies including:

(A) an income replacement contract;

(B) a health care contract;

(D) a credit accident and health contract;

(E) a continuing care contract; and

(F) a long-term care contract; and

(ii) may provide:

(A) hospital coverage;

(B) surgical coverage;

(D) loss of income coverage;

(E) prescription drug coverage;

(F) dental coverage; or

(G) vision coverage.

(d) For purposes of a national licensing registry, "accident and health insurance" is the same as

"accident and health or sickness insurance."

(2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title 63G,

Chapter 3, Utah Administrative Rulemaking Act.

(3) "Administrator" means the same as that term is defined in Subsection (187).

(4) "Adult" means an individual who is 18 years old or older.

(5) "Affiliate" means a person who controls, is controlled by, or is under common control with,

another person. A corporation is an affiliate of another corporation, regardless of ownership, if

substantially the same group of individuals manage the corporations.

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(6) "Agency" means:

(a) a person other than an individual, including a sole proprietorship by which an individual does

business under an assumed name; and

(b) an insurance organization licensed or required to be licensed under Section 31A-23a-301,

31A-25-207, or 31A-26-209.

(7) "Alien insurer" means an insurer domiciled outside the United States.

(8) "Amendment" means an endorsement to an insurance policy or certificate.

(9) "Annuity" means an agreement to make periodical payments for a period certain or over the

lifetime of one or more individuals if the making or continuance of all or some of the series of

the payments, or the amount of the payment, is dependent upon the continuance of human life.

(10) "Application" means a document:

(a)

(i) completed by an applicant to provide information about the risk to be insured; and

(ii) that contains information that is used by the insurer to evaluate risk and decide whether to:

(A) insure the risk under:

(I) the coverage as originally offered; or

(II) a modification of the coverage as originally offered; or

(B) decline to insure the risk; or

(b) used by the insurer to gather information from the applicant before issuance of an annuity

contract.

(11) "Articles" or "articles of incorporation" means:

(a) the original articles;

(b) a special law;

(d) an amendment;

(e) restated articles;

(f) articles of merger or consolidation;

(g) a trust instrument;

(h) another constitutive document for a trust or other entity that is not a corporation; and

(i) an amendment to an item listed in Subsections (11)(a) through (h).

(12) "Bail bond insurance" means a guarantee that a person will attend court when required, up to

and including surrender of the person in execution of a sentence imposed under Subsection

77-20-501(1), as a condition to the release of that person from confinement.

(13) "Binder" means the same as that term is defined in Section 31A-21-102.

(14) "Blanket insurance policy" or "blanket contract" means a group insurance policy covering a

defined class of persons:

(a) without individual underwriting or application; and

(b) that is determined by definition without designating each person covered.

(15) "Board," "board of trustees," or "board of directors" means the group of persons with

responsibility over, or management of, a corporation, however designated.

(16) "Bona fide office" means a physical office in this state:

(a) that is open to the public;

(b) that is staffed during regular business hours on regular business days; and

(17) "Business entity" means:

(a) a corporation;

(b) an association;

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(d) a limited liability company;

(e) a limited liability partnership; or

(f) another legal entity.

(18) "Business of insurance" means the same as that term is defined in Subsection (98).

(19) "Business plan" means the information required to be supplied to the commissioner under

Subsections 31A-5-204(2)(i) and (j), including the information required when these subsections

apply by reference under:

(a) Section 31A-8-205; or

(b) Subsection 31A-9-205(2).

(20)

(a) "Bylaws" means the rules adopted for the regulation or management of a corporation's affairs,

however designated.

(b) "Bylaws" includes comparable rules for a trust or other entity that is not a corporation.

(21) "Captive insurance company" means:

(a) an insurer:

(i) owned by a parent organization; and

(ii) whose purpose is to insure risks of the parent organization and other risks as authorized

under:

(A) Chapter 37, Captive Insurance Companies Act; and

(B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; or

(b) in the case of a group or association, an insurer:

(i) owned by the insureds; and

(ii) whose purpose is to insure risks of:

(A) a member organization;

(B) a group member; or

(I) a member organization; or

(II) a group member.

(22) "Casualty insurance" means liability insurance.

(23) "Certificate" means evidence of insurance given to:

(a) an insured under a group insurance policy; or

(b) a third party.

(24) "Certificate of authority" is included within the term "license."

(25) "Claim," unless the context otherwise requires, means a request or demand on an insurer for

payment of a benefit according to the terms of an insurance policy.

(26) "Claims-made coverage" means an insurance contract or provision limiting coverage under a

policy insuring against legal liability to claims that are first made against the insured while the

policy is in force.

(27)

(a) "Commissioner" or "commissioner of insurance" means Utah's insurance commissioner.

(b) When appropriate, the terms listed in Subsection (27)(a) apply to the equivalent supervisory

official of another jurisdiction.

(28)

(a) "Continuing care insurance" means insurance that:

(i) provides board and lodging;

(ii) provides one or more of the following:

(A) a personal service;

(B) a nursing service;

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(D) any other health-related service; and

(iii) provides the coverage described in this Subsection (28)(a) under an agreement effective:

(A) for the life of the insured; or

(B) for a period in excess of one year.

(b) Insurance is continuing care insurance regardless of whether or not the board and lodging are

provided at the same location as a service described in Subsection (28)(a)(ii).

(29)

(a) "Control," "controlling," "controlled," or "under common control" means the direct or indirect

possession of the power to direct or cause the direction of the management and policies of a

person. This control may be:

(i) by contract;

(ii) by common management;

(iii) through the ownership of voting securities; or

(iv) by a means other than those described in Subsections (29)(a)(i) through (iii).

(b) There is no presumption that an individual holding an official position with another person

controls that person solely by reason of the position.

despite the illegality or invalidity of the contract or arrangement.

(d) There is a rebuttable presumption of control in a person who directly or indirectly owns,

controls, holds with the power to vote, or holds proxies to vote 10% or more of the voting

securities of another person.

(30) "Controlled insurer" means a licensed insurer that is either directly or indirectly controlled by a

producer.

(31) "Controlling person" means a person that directly or indirectly has the power to direct or cause

to be directed, the management, control, or activities of a reinsurance intermediary.

(32) "Controlling producer" means a producer who directly or indirectly controls an insurer.

(33) "Corporate governance annual disclosure" means a report an insurer or insurance group files

in accordance with the requirements of Chapter 16b, Corporate Governance Annual Disclosure

Act.

(34)

(a) "Corporation" means an insurance corporation, except when referring to:

(i) a corporation doing business:

(A) as:

(I) an insurance producer;

(II) a surplus lines producer;

(III) a limited line producer;

(IV) a consultant;

(V) a managing general agent;

(VI) a reinsurance intermediary;

(VII) a third party administrator; or

(VIII) an adjuster; and

(B) under:

(I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance

Intermediaries;

(II) Chapter 25, Third Party Administrators; or

(III) Chapter 26, Insurance Adjusters; or

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(ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance Holding

Companies.

(b) "Mutual" or "mutual corporation" means a mutual insurance corporation.

(35)

(a) "Creditable coverage" has the same meaning as provided in federal regulations adopted

pursuant to the Health Insurance Portability and Accountability Act.

(b) "Creditable coverage" includes coverage that is offered through a public health plan such as:

(i) the Primary Care Network Program under a Medicaid primary care network demonstration

waiver obtained subject to Section 26B-3-108;

(ii) the Children's Health Insurance Program under Section 26B-3-904; or

(iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L. No.

101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. No.

109-415.

(36) "Credit accident and health insurance" means insurance on a debtor to provide indemnity

for payments coming due on a specific loan or other credit transaction while the debtor has a

disability.

(37)

(a) "Credit insurance" means insurance offered in connection with an extension of credit that is

limited to partially or wholly extinguishing that credit obligation.

(b) "Credit insurance" includes:

(i) credit accident and health insurance;

(ii) credit life insurance;

(iii) credit property insurance;

(iv) credit unemployment insurance;

(v) guaranteed automobile protection insurance;

(vi) involuntary unemployment insurance;

(vii) mortgage accident and health insurance;

(viii) mortgage guaranty insurance; and

(ix) mortgage life insurance.

(38) "Credit life insurance" means insurance on the life of a debtor in connection with an extension

of credit that pays a person if the debtor dies.

(39) "Creditor" means a person, including an insured, having a claim, whether:

(a) matured;

(b) unmatured;

(d) unliquidated;

(e) secured;

(f) unsecured;

(g) absolute;

(h) fixed; or

(i) contingent.

(40) "Credit property insurance" means insurance:

(a) offered in connection with an extension of credit; and

(b) that protects the property until the debt is paid.

(41) "Credit unemployment insurance" means insurance:

(a) offered in connection with an extension of credit; and

(b) that provides indemnity if the debtor is unemployed for payments coming due on a:

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(i) specific loan; or

(ii) credit transaction.

(42)

(a) "Crop insurance" means insurance providing protection against damage to crops from

unfavorable weather conditions, fire or lightning, flood, hail, insect infestation, disease, or

other yield-reducing conditions or perils that is:

(i) provided by the private insurance market; or

(ii) subsidized by the Federal Crop Insurance Corporation.

(b) "Crop insurance" includes multiperil crop insurance.

(43)

(a) "Customer service representative" means a person that provides an insurance service and

insurance product information:

(i) for the customer service representative's:

(A) producer;

(B) surplus lines producer; or

(ii) to the customer service representative's employer's:

(A) customer;

(B) client; or

(b) A customer service representative may only operate within the scope of authority of the

customer service representative's producer, surplus lines producer, or consultant employer.

(44) "Deadline" means a final date or time:

(a) imposed by:

(i) statute;

(ii) rule; or

(iii) order; and

(b) by which a required filing or payment must be received by the department.

(45) "Deemer clause" means a provision under this title under which upon the occurrence of a

condition precedent, the commissioner is considered to have taken a specific action. If the

statute so provides, a condition precedent may be the commissioner's failure to take a specific

action.

(46) "Degree of relationship" means the number of steps between two persons determined by

counting the generations separating one person from a common ancestor and then counting

the generations to the other person.

(47) "Department" means the Insurance Department.

(48)

(a) "Direct response solicitation" means an offer for life or accident and health insurance

coverage that allows the individual to apply for or enroll in the insurance coverage on the

basis of the offer.

(b) "Direct response solicitation" does not include an offer for:

(i) insurance through an employee benefit plan that is exempt from state regulation under

federal law; or

(ii) credit life insurance or credit accident and health insurance through a individual's creditor.

(49) "Direct response insurance policy" means an insurance policy solicited and sold without the

policyholder having direct contact with a natural person intermediary.

(50) "Director" means a member of the board of directors of a corporation.

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(51) "Disability" means a physiological or psychological condition that partially or totally limits an

individual's ability to:

(a) perform the duties of:

(i) that individual's occupation; or

(ii) an occupation for which the individual is reasonably suited by education, training, or

experience; or

(b) perform two or more of the following basic activities of daily living:

(i) eating;

(ii) toileting;

(iii) transferring;

(iv) bathing; or

(v) dressing.

(52) "Disability income insurance" means the same as that term is defined in Subsection (89).

(53) "Domestic insurer" means an insurer organized under the laws of this state.

(54) "Domiciliary state" means the state in which an insurer:

(a) is incorporated;

(b) is organized; or

(55)

(a) "Eligible employee" means:

(i) an employee who:

(A) works on a full-time basis; and

(B) has a normal work week of 30 or more hours; or

(ii) a person described in Subsection (55)(b).

(b) "Eligible employee" includes:

(i) an owner, sole proprietor, or partner who:

(A) works on a full-time basis;

(B) has a normal work week of 30 or more hours; and

(ii) an independent contractor if the individual is included under a health benefit plan of a small

employer.

(i) an individual who works on a temporary or substitute basis for a small employer;

(ii) an employer's spouse who does not meet the requirements of Subsection (55)(a)(i); or

(iii) a dependent of an employer who does not meet the requirements of Subsection (55)(a)(i).

(56) "Emergency medical condition" means a medical condition that:

(a) manifests itself by acute symptoms, including severe pain; and

(b) would cause a prudent layperson possessing an average knowledge of medicine and

health to reasonably expect the absence of immediate medical attention through a hospital

emergency department to result in:

(i) placing the layperson's health or the layperson's unborn child's health in serious jeopardy;

(ii) serious impairment to bodily functions; or

(iii) serious dysfunction of any bodily organ or part.

(57) "Employee" means:

(a) an individual employed by an employer; or

(b) an individual who meets the requirements of Subsection (55)(b).

(58) "Employee benefits" means one or more benefits or services provided to:

(a) an employee; or

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(b) a dependent of an employee.

(59)

(a) "Employee welfare fund" means a fund:

(i) established or maintained, whether directly or through a trustee, by:

(A) one or more employers;

(B) one or more labor organizations; or

(ii) that provides employee benefits paid or contracted to be paid, other than income from

investments of the fund:

(A) by or on behalf of an employer doing business in this state; or

(B) for the benefit of a person employed in this state.

(b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax revenues.

(60) "Endorsement" means a written agreement attached to a policy or certificate to modify the

policy or certificate coverage.

(61)

(a) "Enrollee" means:

(i) a policyholder;

(ii) a certificate holder;

(iii) a subscriber; or

(iv) a covered individual:

(A) who has entered into a contract with an organization for health care; or

(B) on whose behalf an arrangement for health care has been made.

(b) "Enrollee" includes an insured.

(62) "Enrollment date," with respect to a health benefit plan, means:

(a) the first day of coverage; or

(b) if there is a waiting period, the first day of the waiting period.

(63) "Enterprise risk" means an activity, circumstance, event, or series of events involving one or

more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse

effect upon the financial condition or liquidity of the insurer or its insurance holding company

system as a whole, including anything that would cause:

(a) the insurer's risk-based capital to fall into an action or control level as set forth in Sections

31A-17-601 through 31A-17-613; or

(b) the insurer to be in hazardous financial condition set forth in Section 31A-27a-101.

(64)

(a) "Escrow" means:

(i) a transaction that effects the sale, transfer, encumbering, or leasing of real property, when

a person not a party to the transaction, and neither having nor acquiring an interest in the

title, performs, in accordance with the written instructions or terms of the written agreement

between the parties to the transaction, any of the following actions:

(A) the explanation, holding, or creation of a document; or

(B) the receipt, deposit, and disbursement of money; or

(ii) a settlement or closing involving:

(A) a mobile home;

(B) a grazing right;

(D) other personal property authorized by the commissioner.

(b) "Escrow" does not include:

(i) the following notarial acts performed by a notary within the state:

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(A) an acknowledgment;

(B) a copy certification;

(D) an oath or affirmation;

(ii) the receipt or delivery of a document; or

(iii) the receipt of money for delivery to the escrow agent.

(65) "Escrow agent" means an agency title insurance producer meeting the requirements of

Sections 31A-4-107, 31A-14-211, and 31A-23a-204, who is acting through an individual title

insurance producer licensed with an escrow subline of authority.

(66)

(a) "Excludes" is not exhaustive and does not mean that another thing is not also excluded.

(b) The items listed in a list using the term "excludes" are representative examples for use in

interpretation of this title.

(67) "Exclusion" means for the purposes of accident and health insurance that an insurer does not

provide insurance coverage, for whatever reason, for one of the following:

(a) a specific physical condition;

(b) a specific medical procedure;

(d) a specific prescription drug or class of prescription drugs.

(68) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding a position of

public or private trust.

(69)

(a) "Filed" means that a filing is:

(i) submitted to the department as required by and in accordance with applicable statute, rule,

or filing order;

(ii) received by the department within the time period provided in applicable statute, rule, or

filing order; and

(iii) accompanied by the appropriate fee in accordance with:

(A) Section 31A-3-103; or

(B) rule.

(b) "Filed" does not include a filing that is rejected by the department because it is not submitted

in accordance with Subsection (69)(a).

(70) "Filing," when used as a noun, means an item required to be filed with the department

including:

(a) a policy;

(b) a rate;

(d) a document;

(e) a plan;

(f) a manual;

(g) an application;

(h) a report;

(i) a certificate;

(j) an endorsement;

(k) an actuarial certification;

(l) a licensee annual statement;

(m) a licensee renewal application;

(n) an advertisement;

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(o) a binder; or

(p) an outline of coverage.

(71) "First party insurance" means an insurance policy or contract in which the insurer agrees to

pay a claim submitted to it by the insured for the insured's losses.

(72)

(a) "Fixed indemnity insurance" means accident and health insurance written to provide a fixed

amount for a specified event relating to or resulting from an illness or injury.

(b) "Fixed indemnity insurance" includes hospital confinement indemnity insurance.

(73) "Foreign insurer" means an insurer domiciled outside of this state, including an alien insurer.

(74)

(a) "Form" means one of the following prepared for general use:

(i) a policy;

(ii) a certificate;

(iii) an application;

(iv) an outline of coverage; or

(v) an endorsement.

(b) "Form" does not include a document specially prepared for use in an individual case.

(75) "Franchise insurance" means an individual insurance policy provided through a mass

marketing arrangement involving a defined class of persons related in some way other than

through the purchase of insurance.

(76) "General lines of authority" include:

(a) the general lines of insurance in Subsection (77);

(b) title insurance under one of the following sublines of authority:

(i) title examination, including authority to act as a title marketing representative;

(ii) escrow, including authority to act as a title marketing representative; and

(iii) title marketing representative only;

(d) workers' compensation; and

(e) another line of insurance that the commissioner considers necessary to recognize in the

public interest.

(77) "General lines of insurance" include:

(a) accident and health;

(b) casualty;

(d) personal lines;

(e) property; and

(f) variable contracts, including variable life and annuity.

(78) "Group health plan" means an employee welfare benefit plan to the extent that the plan

provides medical care:

(a)

(i) to an employee; or

(ii) to a dependent of an employee; and

(b)

(i) directly;

(ii) through insurance reimbursement; or

(iii) through another method.

(79)

(a) "Group insurance policy" means a policy covering a group of persons that is issued:

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(i) to a policyholder on behalf of the group; and

(ii) for the benefit of a member of the group who is selected under a procedure defined in:

(A) the policy; or

(B) an agreement that is collateral to the policy.

(b) A group insurance policy may include a member of the policyholder's family or a dependent.

(80) "Group-wide supervisor" means the commissioner or other regulatory official designated

as the group-wide supervisor for an internationally active insurance group under Section

31A-16-108.6.

(81) "Guaranteed automobile protection insurance" means insurance offered in connection with an

extension of credit that pays the difference in amount between the insurance settlement and

the balance of the loan if the insured automobile is a total loss.

(82)

(a) "Health benefit plan" means a policy, contract, certificate, or agreement offered or issued by

an insurer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health

care, including major medical expense coverage.

(b) "Health benefit plan" does not include:

(i) coverage only for accident or disability income insurance, or any combination thereof;

(ii) coverage issued as a supplement to liability insurance;

(iii) liability insurance, including general liability insurance and automobile liability insurance;

(iv) workers' compensation or similar insurance;

(v) automobile medical payment insurance;

(vi) credit-only insurance;

(vii) coverage for on-site medical clinics;

(viii) other similar insurance coverage, specified in federal regulations issued pursuant to Pub.

L. No. 104-191, under which benefits for health care services are secondary or incidental to

other insurance benefits;

(ix) the following benefits if they are provided under a separate policy, certificate, or contract of

insurance or are otherwise not an integral part of the plan:

(A) limited scope dental or vision benefits;

(B) benefits for long-term care, nursing home care, home health care, community-based care,

or any combination thereof; or

No. 104-191;

(x) the following benefits if the benefits are provided under a separate policy, certificate, or

contract of insurance, there is no coordination between the provision of benefits and any

exclusion of benefits under any health plan, and the benefits are paid with respect to an

event without regard to whether benefits are provided under any health plan:

(A) coverage only for specified disease or illness; or

(B) fixed indemnity insurance;

(xi) the following if offered as a separate policy, certificate, or contract of insurance:

(A) Medicare supplement insurance;

(B) coverage supplemental to the coverage provided under United States Code,

Title 10, Chapter 55, Civilian Health and Medical Program of the Uniformed Services

(CHAMPUS); or

(xii) short-term limited duration health insurance; and

(xiii) student health insurance, except as required under 45 C.F.R. Sec. 147.145.

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(83) "Health care" means any of the following intended for use in the diagnosis, treatment,

mitigation, or prevention of a human ailment or impairment:

(a) a professional service;

(b) a personal service;

(d) equipment;

(e) a device;

(f) supplies; or

(g) medicine.

(84)

(a) "Health care insurance" or "health insurance" means insurance providing:

(i) a health care benefit; or

(ii) payment of an incurred health care expense.

(b) "Health care insurance" or "health insurance" does not include accident and health insurance

providing a benefit for:

(i) replacement of income;

(ii) short-term accident;

(iii) fixed indemnity;

(iv) credit accident and health;

(v) supplements to liability;

(vi) workers' compensation;

(vii) automobile medical payment;

(viii) no-fault automobile;

(ix) equivalent self-insurance; or

(x) a type of accident and health insurance coverage that is a part of or attached to another

type of policy.

(85) "Health care provider" means the same as that term is defined in Section 78B-3-403.

(86) "Health care sharing ministry" means an entity that:

(a) is a tax-exempt nonprofit entity under the Internal Revenue Code;

(b) limits participants to those who are of a similar faith;

other participants by:

(i) matching a participant who has qualified expenses with one or more participants who are

able to contribute to paying for the qualified expenses; and

(ii) arranging, directly or indirectly, for each contributing participant's contribution to be used to

pay for the qualified expenses;

(d) requires an individual to make one or more minimum payments or contributions as a condition

of one or more of the following:

(i) becoming a participant;

(ii) remaining a participant; or

(iii) receiving a contribution to pay qualified expenses; and

(e) in carrying out the functions described in this Subsection (86), makes no assumption of risk or

promise to pay any qualified expenses.

(87) "Health insurance exchange" means an exchange as defined in 45 C.F.R. Sec. 155.20.

(88) "Health Insurance Portability and Accountability Act" means the Health Insurance Portability

and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat. 1936, as amended.

(89) "Income replacement insurance" or "disability income insurance" means insurance written to

provide payments to replace income lost from accident or sickness.

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(90) "Indemnity" means the payment of an amount to offset all or part of an insured loss.

(91) "Independent adjuster" means an insurance adjuster required to be licensed under Section

31A-26-201 who engages in insurance adjusting as a representative of an insurer.

(92) "Independently procured insurance" means insurance procured under Section 31A-15-104.

(93) "Individual" means a natural person.

(94) "Inland marine insurance" includes insurance covering:

(a) property in transit on or over land;

(b) property in transit over water by means other than boat or ship;

(d) fixed transportation property such as bridges, electric transmission systems, radio and

television transmission towers and tunnels; and

(e) personal and commercial property floaters.

(95) "Insolvency" or "insolvent" means that:

(a) an insurer is unable to pay the insurer's obligations as the obligations are due;

(b) an insurer's total adjusted capital is less than the insurer's mandatory control level RBC under

Subsection 31A-17-601(8)(c); or

(96)

(a) "Insurance" means:

(i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more persons

to one or more other persons; or

(ii) an arrangement, contract, or plan for the distribution of a risk or risks among a group of

persons that includes the person seeking to distribute that person's risk.

(b) "Insurance" includes:

(i) a risk distributing arrangement providing for compensation or replacement for damages or

loss through the provision of a service or a benefit in kind;

(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business

and not as merely incidental to a business transaction; and

(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with

a class of persons who have agreed to share the risk.

(97) "Insurance adjuster" means a person who directs or conducts the investigation, negotiation,

or settlement of a claim under an insurance policy other than life insurance or an annuity, on

behalf of an insurer, policyholder, or a claimant under an insurance policy.

(98) "Insurance business" or "business of insurance" includes:

(a) providing health care insurance by an organization that is or is required to be licensed under

this title;

(b) providing a benefit to an employee in the event of a contingency not within the control of the

employee, in which the employee is entitled to the benefit as a right, which benefit may be

provided either:

(i) by a single employer or by multiple employer groups; or

(ii) through one or more trusts, associations, or other entities;

(i) including an annuity issued in return for a gift; and

(ii) except an annuity provided by a person specified in Subsections 31A-22-1305(2) and (3);

(d) providing the characteristic services of a motor club;

(e) providing another person with insurance;

(f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor, or surety,

a contract or policy offering title insurance;

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(g) transacting or proposing to transact any phase of title insurance, including:

(i) solicitation;

(ii) negotiation preliminary to execution;

(iii) execution of a contract of title insurance;

(iv) insuring; and

(v) transacting matters subsequent to the execution of the contract and arising out of the

contract, including reinsurance;

(h) transacting or proposing a life settlement; and

(i) doing, or proposing to do, any business in substance equivalent to Subsections (98)(a)

through (h) in a manner designed to evade this title.

(99) "Insurance consultant" or "consultant" means a person who:

(a) advises another person about insurance needs and coverages;

(b) is compensated by the person advised on a basis not directly related to the insurance placed;

and

insurer or producer for advice given.

(100) "Insurance group" means the persons that comprise an insurance holding company system.

(101) "Insurance holding company system" means a group of two or more affiliated persons, at

least one of whom is an insurer.

(102)

(a) "Insurance producer" or "producer" means a person licensed or required to be licensed under

the laws of this state to sell, solicit, or negotiate insurance.

(b)

(i) "Producer for the insurer" means a producer who is compensated directly or indirectly by an

insurer for selling, soliciting, or negotiating an insurance product of that insurer.

(ii) "Producer for the insurer" may be referred to as an "agent."

(c)

(i) "Producer for the insured" means a producer who:

(A) is compensated directly and only by an insurance customer or an insured; and

(B) receives no compensation directly or indirectly from an insurer for selling, soliciting, or

negotiating an insurance product of that insurer to an insurance customer or insured.

(ii) "Producer for the insured" may be referred to as a "broker."

(103)

(a) "Insured" means a person to whom or for whose benefit an insurer makes a promise in an

insurance policy and includes:

(i) a policyholder;

(ii) a subscriber;

(iii) a member; and

(iv) a beneficiary.

(b) The definition in Subsection (103)(a):

(i) applies only to this title;

(ii) does not define the meaning of "insured" as used in an insurance policy or certificate; and

(iii) includes an enrollee.

(104)

(a) "Insurer," "carrier," "insurance carrier," or "insurance company" means a person doing an

insurance business as a principal including:

(i) a fraternal benefit society;

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(ii) an issuer of a gift annuity other than an annuity specified in Subsections 31A-22-1305(2)

and (3);

(iii) a motor club;

(iv) an employee welfare plan;

(v) a person purporting or intending to do an insurance business as a principal on that person's

own account; and

(vi) a health maintenance organization.

(b) "Insurer," "carrier," "insurance carrier," or "insurance company" does not include a

governmental entity.

(105) "Interinsurance exchange" means the same as that term is defined in Subsection (168).

(106) "Internationally active insurance group" means an insurance holding company system:

(a) that includes an insurer registered under Section 31A-16-105;

(b) that has premiums written in at least three countries;

total gross written premiums; and

(d) that, based on a three-year rolling average, has:

(i) total assets of at least $50,000,000,000; or

(ii) total gross written premiums of at least $10,000,000,000.

(107) "Involuntary unemployment insurance" means insurance:

(a) offered in connection with an extension of credit; and

(b) that provides indemnity if the debtor is involuntarily unemployed for payments coming due on

(i) specific loan; or

(ii) credit transaction.

(108) "Large employer," in connection with a health benefit plan, means an employer who, with

respect to a calendar year and to a plan year:

(a) employed an average of at least 51 employees on business days during the preceding

calendar year; and

(b) employs at least one employee on the first day of the plan year.

(109) "Late enrollee," with respect to an employer health benefit plan, means an individual whose

enrollment is a late enrollment.

(110) "Late enrollment," with respect to an employer health benefit plan, means enrollment of an

individual other than:

(a) on the earliest date on which coverage can become effective for the individual under the

terms of the plan; or

(b) through special enrollment.

(111)

(a) Except for a retainer contract or legal assistance described in Section 31A-1-103, "legal

expense insurance" means insurance written to indemnify or pay for a specified legal

expense.

(b) "Legal expense insurance" includes an arrangement that creates a reasonable expectation of

an enforceable right.

services incidental to other insurance coverage.

(112)

(a) "Liability insurance" means insurance against liability:

(i) for death, injury, or disability of a human being, or for damage to property, exclusive of the

coverages under:

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(A) medical malpractice insurance;

(B) professional liability insurance; and

(ii) for a medical, hospital, surgical, and funeral benefit to a person other than the insured who

is injured, irrespective of legal liability of the insured, when issued with or supplemental to

insurance against legal liability for the death, injury, or disability of a human being, exclusive

of the coverages under:

(A) medical malpractice insurance;

(B) professional liability insurance; and

(iii) for loss or damage to property resulting from an accident to or explosion of a boiler, pipe,

pressure container, machinery, or apparatus;

(iv) for loss or damage to property caused by:

(A) the breakage or leakage of a sprinkler, water pipe, or water container; or

(B) water entering through a leak or opening in a building; or

(v) for other loss or damage properly the subject of insurance not within another kind of

insurance as defined in this chapter, if the insurance is not contrary to law or public policy.

(b) "Liability insurance" includes:

(i) vehicle liability insurance;

(ii) residential dwelling liability insurance; and

(iii) making inspection of, and issuing a certificate of inspection upon, an elevator, boiler,

machinery, or apparatus of any kind when done in connection with insurance on the

elevator, boiler, machinery, or apparatus.

(113)

(a) "License" means authorization issued by the commissioner to engage in an activity that is part

of or related to the insurance business.

(b) "License" includes a certificate of authority issued to an insurer.

(114)

(a) "Life insurance" means:

(i) insurance on a human life; and

(ii) insurance pertaining to or connected with human life.

(b) The business of life insurance includes:

(i) granting a death benefit;

(ii) granting an annuity benefit;

(iii) granting an endowment benefit;

(iv) granting an additional benefit in the event of death by accident;

(v) granting an additional benefit to safeguard the policy against lapse; and

(vi) providing an optional method of settlement of proceeds.

(115) "Limited license" means a license that:

(a) is issued for a specific product of insurance; and

(b) limits an individual or agency to transact only for that product or insurance.

(116) "Limited line credit insurance" includes the following forms of insurance:

(a) credit life;

(b) credit accident and health;

(d) credit unemployment;

(e) involuntary unemployment;

(f) mortgage life;

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(g) mortgage guaranty;

(h) mortgage accident and health;

(i) guaranteed automobile protection; and

(j) another form of insurance offered in connection with an extension of credit that:

(i) is limited to partially or wholly extinguishing the credit obligation; and

(ii) the commissioner determines by rule should be designated as a form of limited line credit

insurance.

(117) "Limited line credit insurance producer" means a person who sells, solicits, or negotiates

one or more forms of limited line credit insurance coverage to an individual through a master,

corporate, group, or individual policy.

(118) "Limited line insurance" includes:

(a) bail bond;

(b) limited line credit insurance;

(d) motor club insurance;

(e) car rental related insurance;

(f) travel insurance;

(g) crop insurance;

(h) self-service storage insurance;

(i) guaranteed asset protection waiver;

(j) portable electronics insurance; and

(k) another form of limited insurance that the commissioner determines by rule should be

designated a form of limited line insurance.

(119) "Limited lines authority" includes the lines of insurance listed in Subsection (118).

(120) "Limited lines producer" means a person who sells, solicits, or negotiates limited lines

insurance.

(121)

(a) "Long-term care insurance" means an insurance policy or rider advertised, marketed, offered,

or designated to provide coverage:

(i) in a setting other than an acute care unit of a hospital;

(ii) for not less than 12 consecutive months for a covered person on the basis of:

(A) expenses incurred;

(B) indemnity;

(D) another method;

(iii) for one or more necessary or medically necessary services that are:

(A) diagnostic;

(B) preventative;

(D) rehabilitative;

(E) maintenance; or

(F) personal care; and

(iv) that may be issued by:

(A) an insurer;

(B) a fraternal benefit society;

(C)

(I) a nonprofit health hospital; and

(II) a medical service corporation;

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(D) a prepaid health plan;

(E) a health maintenance organization; or

(F) an entity similar to the entities described in Subsections (121)(a)(iv)(A) through (E) to the

extent that the entity is otherwise authorized to issue life or health care insurance.

(b) "Long-term care insurance" includes:

(i) any of the following that provide directly or supplement long-term care insurance:

(A) a group or individual annuity or rider; or

(B) a life insurance policy or rider;

(ii) a policy or rider that provides for payment of benefits on the basis of:

(A) cognitive impairment; or

(B) functional capacity; or

(iii) a qualified long-term care insurance contract.

(i) a policy that is offered primarily to provide basic Medicare supplement insurance;

(ii) basic hospital expense coverage;

(iii) basic medical/surgical expense coverage;

(iv) hospital confinement indemnity coverage;

(v) major medical expense coverage;

(vi) income replacement or related asset-protection coverage;

(vii) accident only coverage;

(viii) coverage for a specified:

(A) disease; or

(B) accident;

(ix) limited benefit health coverage;

(x) a life insurance policy that accelerates the death benefit to provide the option of a lump sum

payment:

(A) if the following are not conditioned on the receipt of long-term care:

(I) benefits; or

(II) eligibility; and

(B) the coverage is for one or more the following qualifying events:

(I) terminal illness;

(II) medical conditions requiring extraordinary medical intervention; or

(III) permanent institutional confinement; or

(xi) limited long-term care as defined in Section 31A-22-2002.

(122) "Managed care organization" means a person:

(a) licensed as a health maintenance organization under Chapter 8, Health Maintenance

Organizations and Limited Health Plans; or

(b)

(i) licensed under:

(A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;

(B) Chapter 7, Nonprofit Health Service Insurance Corporations; or

(ii) that requires an enrollee to use, or offers incentives, including financial incentives, for an

enrollee to use, network providers.

(123) "Medical malpractice insurance" means insurance against legal liability incident to the

practice and provision of a medical service other than the practice and provision of a dental

service.

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(124) "Medicare" means the "Health Insurance for the Aged Act," Title XVIII of the federal Social

Security Act, as then constituted or later amended.

(125)

(a) "Medicare supplement insurance" means health insurance coverage that is advertised,

marketed, or designed primarily as a supplement to reimbursements under Medicare for the

hospital, medical, or surgical expenses of individuals eligible for Medicare.

(b) "Medicare supplement insurance" does not include:

(i) a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act;

(ii) a policy issued under a demonstration project specified in 42 U.S.C. Sec. 1395ss(g)(1);

(iii) a Medicare Advantage plan established under Medicare Part C;

(iv) an outpatient prescription drug plan established under Medicare Part D; or

(v) any health care prepayment plan that provides benefits pursuant to an agreement under

Section 1833(a)(1)(A) of the Social Security Act.

(126) "Member" means a person having membership rights in an insurance corporation.

(127) "Minimum capital" or "minimum required capital" means the capital that must be constantly

maintained by a stock insurance corporation as required by statute.

(128) "Mortgage accident and health insurance" means insurance offered in connection with an

extension of credit that provides indemnity for payments coming due on a mortgage while the

debtor has a disability.

(129) "Mortgage guaranty insurance" means surety insurance under which a mortgagee or other

creditor is indemnified against losses caused by the default of a debtor.

(130) "Mortgage life insurance" means insurance on the life of a debtor in connection with an

extension of credit that pays if the debtor dies.

(131) "Motor club" means a person:

(a) licensed under:

(i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;

(ii) Chapter 11, Motor Clubs; or

(iii) Chapter 14, Foreign Insurers; and

(b) that promises for an advance consideration to provide for a stated period of time one or more:

(i) legal services under Subsection 31A-11-102(1)(b);

(ii) bail services under Subsection 31A-11-102(1)(c); or

(iii)

(A) trip reimbursement;

(B) towing services;

(D) stolen automobile services;

(E) a combination of the services listed in Subsections (131)(b)(iii)(A) through (D); or

(F) other services given in Subsections 31A-11-102(1)(b) through (f).

(132) "Mutual" means a mutual insurance corporation.

(133) "NAIC" means the National Association of Insurance Commissioners.

(134) "NAIC liquidity stress test framework" means a NAIC publication that includes:

(a) a history of the NAIC's development of regulatory liquidity stress testing;

(b) the scope criteria applicable for a specific data year; and

adopted by the NAIC and as amended by the NAIC in accordance with NAIC procedures.

(135) "Network plan" means health care insurance:

(a) that is issued by an insurer; and

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(b) under which the financing and delivery of medical care is provided, in whole or in part,

through a defined set of providers under contract with the insurer, including the financing and

delivery of an item paid for as medical care.

(136) "Network provider" means a health care provider who has an agreement with a managed

care organization to provide health care services to an enrollee with an expectation of receiving

payment, other than coinsurance, copayments, or deductibles, directly from the managed care

organization.

(137) "Nonparticipating" means a plan of insurance under which the insured is not entitled to

receive a dividend representing a share of the surplus of the insurer.

(138) "Ocean marine insurance" means insurance against loss of or damage to:

(a) ships or hulls of ships;

(b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money, securities,

choses in action, evidences of debt, valuable papers, bottomry, respondentia interests, or

other cargoes in or awaiting transit over the oceans or inland waterways;

goods or people upon or across the oceans or inland waterways; or

(d) a vessel owner or operator as a result of liability to employees, passengers, bailors, owners

of other vessels, owners of fixed objects, customs or other authorities, or other persons in

connection with maritime activity.

(139) "Order" means an order of the commissioner.

(140) "ORSA guidance manual" means the current version of the Own Risk and Solvency

Assessment Guidance Manual developed and adopted by the National Association of

Insurance Commissioners and as amended from time to time.

(141) "ORSA summary report" means a confidential high-level summary of an insurer or insurance

group's own risk and solvency assessment.

(142) "Outline of coverage" means a summary that explains an accident and health insurance

policy.

(143) "Own risk and solvency assessment" means an insurer or insurance group's confidential

internal assessment:

(a)

(i) of each material and relevant risk associated with the insurer or insurance group;

(ii) of the insurer or insurance group's current business plan to support each risk described in

Subsection (143)(a)(i); and

(iii) of the sufficiency of capital resources to support each risk described in Subsection (143)(a)

(i); and

(b) that is appropriate to the nature, scale, and complexity of an insurer or insurance group.

(144) "Participating" means a plan of insurance under which the insured is entitled to receive a

dividend representing a share of the surplus of the insurer.

(145) "Participation," as used in a health benefit plan, means a requirement relating to the

minimum percentage of eligible employees that must be enrolled in relation to the total number

of eligible employees of an employer reduced by each eligible employee who voluntarily

declines coverage under the plan because the employee:

(a) has other group health care insurance coverage; or

(b) receives:

(i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social Security

Amendments of 1965; or

(ii) another government health benefit.

(146) "Person" includes:

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(a) an individual;

(b) a partnership;

(d) an incorporated or unincorporated association;

(e) a joint stock company;

(f) a trust;

(g) a limited liability company;

(h) a reciprocal;

(i) a syndicate; or

(j) another similar entity or combination of entities acting in concert.

(147) "Personal lines insurance" means property and casualty insurance coverage sold for

primarily noncommercial purposes to:

(a) an individual; or

(b) a family.

(148) "Plan sponsor" means the same as that term is defined in 29 U.S.C. Sec. 1002(16)(B).

(149) "Plan year" means:

(a) the year that is designated as the plan year in:

(i) the plan document of a group health plan; or

(ii) a summary plan description of a group health plan;

(b) if the plan document or summary plan description does not designate a plan year or there is

no plan document or summary plan description:

(i) the year used to determine deductibles or limits;

(ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis; or

(iii) the employer's taxable year if:

(A) the plan does not impose deductibles or limits on a yearly basis; and

(B)

(I) the plan is not insured; or

(II) the insurance policy is not renewed on an annual basis; or

(150)

(a) "Policy" means a document, including an attached endorsement or application that:

(i) purports to be an enforceable contract; and

(ii) memorializes in writing some or all of the terms of an insurance contract.

(b) "Policy" includes a service contract issued by:

(i) a motor club under Chapter 11, Motor Clubs;

(ii) a service contract provided under Chapter 6a, Service Contracts; and

(iii) a corporation licensed under:

(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or

(B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.

(i) a certificate under a group insurance contract; or

(ii) a document that does not purport to have legal effect.

(151) "Policyholder" means a person who controls a policy, binder, or oral contract by ownership,

premium payment, or otherwise.

(152) "Policy illustration" means a presentation or depiction that includes nonguaranteed elements

of a policy offering life insurance over a period of years.

(153) "Policy summary" means a synopsis describing the elements of a life insurance policy.

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(154) "PPACA" means the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 and

the Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, and related federal

regulations and guidance.

(155) "Preexisting condition," with respect to health care insurance:

(a) means a condition that was present before the effective date of coverage, whether or not

medical advice, diagnosis, care, or treatment was recommended or received before that day;

and

(b) does not include a condition indicated by genetic information unless an actual diagnosis of the

condition by a physician has been made.

(156)

(a) "Premium" means the monetary consideration for an insurance policy.

(b) "Premium" includes, however designated:

(i) an assessment;

(ii) a membership fee;

(iii) a required contribution; or

(iv) monetary consideration.

(c)

(i) "Premium" does not include consideration paid to a third party administrator for the third

party administrator's services.

(ii) "Premium" includes an amount paid by a third party administrator to an insurer for insurance

on the risks administered by the third party administrator.

(157) "Principal officers" for a corporation means the officers designated under Subsection

31A-5-203(3).

(158) "Proceeding" includes an action or special statutory proceeding.

(159) "Professional liability insurance" means insurance against legal liability incident to the

practice of a profession and provision of a professional service.

(160)

(a) "Property insurance" means insurance against loss or damage to real or personal property of

every kind and any interest in that property:

(i) from all hazards or causes; and

(ii) against loss consequential upon the loss or damage including vehicle comprehensive and

vehicle physical damage coverages.

(b) "Property insurance" does not include:

(i) inland marine insurance; and

(ii) ocean marine insurance.

(161) "Qualified long-term care insurance contract" or "federally tax qualified long-term care

insurance contract" means:

(a) an individual or group insurance contract that meets the requirements of Section 7702B(b),

Internal Revenue Code; or

(b) the portion of a life insurance contract that provides long-term care insurance:

(i)

(A) by rider; or

(B) as a part of the contract; and

(ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue Code.

(162) "Qualified United States financial institution" means an institution that:

(a) is:

(i) organized under the laws of the United States or any state; or

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(ii) in the case of a United States office of a foreign banking organization, licensed under the

laws of the United States or any state;

(b) is regulated, supervised, and examined by a United States federal or state authority having

regulatory authority over a bank or trust company; and

appropriate to regulate the quality of a financial institution whose letters of credit will be

acceptable to the commissioner as determined by:

(i) the commissioner by rule; or

(ii) the Securities Valuation Office of the National Association of Insurance Commissioners.

(163)

(a) "Rate" means:

(i) the cost of a given unit of insurance; or

(ii) for property or casualty insurance, that cost of insurance per exposure unit either expressed

as:

(A) a single number; or

(B) a pure premium rate, adjusted before the application of individual risk variations based on

loss or expense considerations to account for the treatment of:

(I) expenses;

(II) profit; and

(III) individual insurer variation in loss experience.

(b) "Rate" does not include a minimum premium.

(164)

(a) "Rate service organization" means a person who assists an insurer in rate making or filing by:

(i) collecting, compiling, and furnishing loss or expense statistics;

(ii) recommending, making, or filing rates or supplementary rate information; or

(iii) advising about rate questions, except as an attorney giving legal advice.

(b) "Rate service organization" does not include:

(i) an employee of an insurer;

(ii) a single insurer or group of insurers under common control;

(iii) a joint underwriting group; or

(iv) an individual serving as an actuarial or legal consultant.

(165) "Rating manual" means any of the following used to determine initial and renewal policy

premiums:

(a) a manual of rates;

(b) a classification;

(d) a rating formula that describes steps, policies, and procedures for determining initial and

renewal policy premiums.

(166)

(a) "Rebate" means a licensee paying, allowing, giving, or offering to pay, allow, or give, directly

or indirectly:

(i) a refund of premium or portion of premium;

(ii) a refund of commission or portion of commission;

(iii) a refund of all or a portion of a consultant fee; or

(iv) providing services or other benefits not specified in an insurance or annuity contract.

(b) "Rebate" does not include:

(i) a refund due to termination or changes in coverage;

(ii) a refund due to overcharges made in error by the licensee; or

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(iii) savings or wellness benefits as provided in the contract by the licensee.

(167) "Received by the department" means:

(a) the date delivered to and stamped received by the department, if delivered in person;

(b) the post mark date, if delivered by mail;

(d) the received date recorded on an item delivered, if delivered by:

(i) facsimile;

(ii) email; or

(iii) another electronic method; or

(e) a date specified in:

(i) a statute;

(ii) a rule; or

(iii) an order.

(168) "Reciprocal" or "interinsurance exchange" means an unincorporated association of persons:

(a) operating through an attorney-in-fact common to all of the persons; and

(b) exchanging insurance contracts with one another that provide insurance coverage on each

other.

(169) "Reinsurance" means an insurance transaction where an insurer, for consideration,

transfers any portion of the risk it has assumed to another insurer. In referring to reinsurance

transactions, this title sometimes refers to:

(a) the insurer transferring the risk as the "ceding insurer"; and

(b) the insurer assuming the risk as the:

(i) "assuming insurer"; or

(ii) "assuming reinsurer."

(170) "Reinsurer" means a person licensed in this state as an insurer with the authority to assume

reinsurance.

(171) "Residential dwelling liability insurance" means insurance against liability resulting from

or incident to the ownership, maintenance, or use of a residential dwelling that is a detached

single family residence or multifamily residence up to four units.

(172)

(a) "Retrocession" means reinsurance with another insurer of a liability assumed under a

reinsurance contract.

(b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a liability

assumed under a reinsurance contract.

(173) "Rider" means an endorsement to:

(a) an insurance policy; or

(b) an insurance certificate.

(174) "Scope criteria" means the designated exposure bases and minimum magnitudes for a

specified data year that are used to establish a preliminary list of insurers considered scoped

into the NAIC liquidity stress test framework for that data year.

(175) "Secondary medical condition" means a complication related to an exclusion from coverage

in accident and health insurance.

(176)

(a) "Security" means a:

(i) note;

(ii) stock;

(iii) bond;

(iv) debenture;

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(v) evidence of indebtedness;

(vi) certificate of interest or participation in a profit-sharing agreement;

(vii) collateral-trust certificate;

(viii) preorganization certificate or subscription;

(ix) transferable share;

(x) investment contract;

(xi) voting trust certificate;

(xii) certificate of deposit for a security;

(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in payments

out of production under such a title or lease;

(xiv) commodity contract or commodity option;

(xv) certificate of interest or participation in, temporary or interim certificate for, receipt for,

guarantee of, or warrant or right to subscribe to or purchase any of the items listed in

Subsections (176)(a)(i) through (xiv); or

(xvi) another interest or instrument commonly known as a security.

(b) "Security" does not include:

(i) any of the following under which an insurance company promises to pay money in a specific

lump sum or periodically for life or some other specified period:

(A) insurance;

(B) an endowment policy; or

(ii) a burial certificate or burial contract.

(177) "Securityholder" means a specified person who owns a security of a person, including:

(a) common stock;

(b) preferred stock;

(d) any other security convertible into or evidencing the right of any of the items listed in this

Subsection (177).

(178)

(a) "Self-insurance" means an arrangement under which a person provides for spreading the

person's own risks by a systematic plan.

(b) "Self-insurance" includes:

(i) an arrangement under which a governmental entity undertakes to indemnify an employee for

liability arising out of the employee's employment; and

(ii) an arrangement under which a person with a managed program of self-insurance and risk

management undertakes to indemnify the person's affiliate, subsidiary, director, officer,

or employee for liability or risk that arises out of the person's relationship with the affiliate,

subsidiary, director, officer, or employee.

(i) an arrangement under which a number of persons spread their risks among themselves; or

(ii) an arrangement with an independent contractor.

(179) "Sell" means to exchange a contract of insurance:

(a) by any means;

(b) for money or its equivalent; and

(180) "Short-term limited duration health insurance" means a health benefit product that:

(a) after taking into account any renewals or extensions, has a total duration of no more than 36

months; and

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(b) has an expiration date specified in the contract that is less than 12 months after the original

effective date of coverage under the health benefit product.

(181) "Significant break in coverage" means a period of 63 consecutive days during each of which

an individual does not have creditable coverage.

(182)

(a) "Small employer" means, in connection with a health benefit plan and with respect to a

calendar year and to a plan year, an employer who:

(i)

(A) employed at least one but not more than 50 eligible employees on business days during

the preceding calendar year; or

(B) if the employer did not exist for the entirety of the preceding calendar year, reasonably

expects to employ an average of at least one but not more than 50 eligible employees on

business days during the current calendar year;

(ii) employs at least one employee on the first day of the plan year; and

(iii) for an employer who has common ownership with one or more other employers, is treated

as a single employer under 26 U.S.C. Sec. 414(b), (c), (m), or (o).

(b) "Small employer" does not include an owner or a sole proprietor that does not employ at least

one employee.

(183) "Special enrollment period," in connection with a health benefit plan, has the same meaning

as provided in federal regulations adopted pursuant to the Health Insurance Portability and

Accountability Act.

(184)

(a) "Subsidiary" of a person means an affiliate controlled by that person either directly or

indirectly through one or more affiliates or intermediaries.

(b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting shares are

owned by that person either alone or with its affiliates, except for the minimum number of

shares the law of the subsidiary's domicile requires to be owned by directors or others.

(185) Subject to Subsection (95)(b), "surety insurance" includes:

(a) a guarantee against loss or damage resulting from the failure of a principal to pay or perform

the principal's obligations to a creditor or other obligee;

(b) bail bond insurance; and

(186)

(a) "Surplus" means the excess of assets over the sum of paid-in capital and liabilities.

(b)

(i) "Permanent surplus" means the surplus of an insurer or organization that is designated by

the insurer or organization as permanent.

(ii) Sections 31A-5-211, 31A-7-201, 31A-8-209, 31A-9-209, and 31A-14-205 require that

insurers or organizations doing business in this state maintain specified minimum levels of

permanent surplus.

(iii) Except for assessable mutuals, the minimum permanent surplus requirement is the same

as the minimum required capital requirement that applies to stock insurers.

(i) for a life insurer, accident and health insurer, health organization, or property and casualty

insurer as defined in Section 31A-17-601, the lesser of:

(A) that amount of an insurer's or health organization's total adjusted capital that exceeds the

product of:

(I) 2.5; and

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(II) the sum of the insurer's or health organization's minimum capital or permanent surplus

required under Section 31A-5-211, 31A-9-209, or 31A-14-205; or

(B) that amount of an insurer's or health organization's total adjusted capital that exceeds the

product of:

(I) 3.0; and

(II) the authorized control level RBC as defined in Subsection 31A-17-601(8)(a); and

(ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer that

amount of an insurer's paid-in-capital and surplus that exceeds the product of:

(A) 1.5; and

(B) the insurer's total adjusted capital required by Subsection 31A-17-609(1).

(187) "Third party administrator" or "administrator" means a person who collects charges or

premiums from, or who, for consideration, adjusts or settles claims of residents of the state in

connection with insurance coverage, annuities, or service insurance coverage, except:

(a) a union on behalf of its members;

(b) a person administering a:

(i) pension plan subject to the federal Employee Retirement Income Security Act of 1974;

(ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or

(iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;

subsidiary or affiliated corporations of the employer;

(d) an insurer licensed under the following, but only for a line of insurance for which the insurer

holds a license in this state:

(i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;

(ii) Chapter 7, Nonprofit Health Service Insurance Corporations;

(iii) Chapter 8, Health Maintenance Organizations and Limited Health Plans;

(iv) Chapter 9, Insurance Fraternals; or

(v) Chapter 14, Foreign Insurers;

(e) a person:

(i) licensed or exempt from licensing under:

(A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance

Intermediaries; or

(B) Chapter 26, Insurance Adjusters; and

(ii) whose activities are limited to those authorized under the license the person holds or for

which the person is exempt; or

(f) an institution, bank, or financial institution:

(i) that is:

(A) an institution whose deposits and accounts are to any extent insured by a federal deposit

insurance agency, including the Federal Deposit Insurance Corporation or National Credit

Union Administration; or

(B) a bank or other financial institution that is subject to supervision or examination by a

federal or state banking authority; and

(ii) that does not adjust claims without a third party administrator license.

(188) "Title insurance" means the insuring, guaranteeing, or indemnifying of an owner of real or

personal property or the holder of liens or encumbrances on that property, or others interested

in the property against loss or damage suffered by reason of liens or encumbrances upon,

defects in, or the unmarketability of the title to the property, or invalidity or unenforceability of

any liens or encumbrances on the property.

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(189) "Total adjusted capital" means the sum of an insurer's or health organization's statutory

capital and surplus as determined in accordance with:

(a) the statutory accounting applicable to the annual financial statements required to be filed

under Section 31A-4-113; and

(b) another item provided by the RBC instructions, as RBC instructions is defined in Section

31A-17-601.

(190)

(a) "Trustee" means "director" when referring to the board of directors of a corporation.

(b) "Trustee," when used in reference to an employee welfare fund, means an individual, firm,

association, organization, joint stock company, or corporation, whether acting individually

or jointly and whether designated by that name or any other, that is charged with or has the

overall management of an employee welfare fund.

(191)

(a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer" means an insurer:

(i) not holding a valid certificate of authority to do an insurance business in this state; or

(ii) transacting business not authorized by a valid certificate.

(b) "Admitted insurer" or "authorized insurer" means an insurer:

(i) holding a valid certificate of authority to do an insurance business in this state; and

(ii) transacting business as authorized by a valid certificate.

(192) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.

(193) "Vehicle liability insurance" means insurance against liability resulting from or incident

to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a vehicle

comprehensive or vehicle physical damage coverage described in Subsection (160).

(194) "Voting security" means a security with voting rights, and includes a security convertible into

a security with a voting right associated with the security.

(195) "Waiting period" for a health benefit plan means the period that must pass before coverage

for an individual, who is otherwise eligible to enroll under the terms of the health benefit plan,

can become effective.

(196) "Workers' compensation insurance" means:

(a) insurance for indemnification of an employer against liability for compensation based on:

(i) a compensable accidental injury; and

(ii) occupational disease disability;

(b) employer's liability insurance incidental to workers' compensation insurance and written in

connection with workers' compensation insurance; and

provided by law.

Amended by Chapter 120, 2024 General Session

Part 4

Venue

31A-1-401 Venue for action or petition filed by commissioner.

If the commissioner brings an action under this title in the district court, the commissioner shall

bring the action:

(1) in accordance with Title 78B, Chapter 3a, Venue for Civil Actions; or

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(2) in Salt Lake County.

Enacted by Chapter 401, 2023 General Session

Chapter 2

Administration of the Insurance Laws

Part 1

The Insurance Department

31A-2-101 General duties.

The Insurance Department shall administer the Insurance Code, seeking to achieve the

purposes in Section 31A-1-102, and shall perform other duties imposed by law.

Enacted by Chapter 242, 1985 General Session

31A-2-102 Appointment, general powers, and duties of commissioner -- Vacancy --

Compensation of commissioner.

(1) The chief officer of the department is the insurance commissioner, who may exercise all

powers given to, and shall perform all duties imposed on, the Insurance Department. The

commissioner shall be appointed by the governor with the advice and consent of the Senate.

If the commissioner dies, resigns, or is removed, a successor may be appointed as specified

in this subsection. If the Legislature is not then in session, the successor may serve as acting

commissioner without advice and consent of the Senate until the Senate has an opportunity to

advise and consent to the successor. The commissioner is subject to removal at the pleasure

of the governor.

(2) When the office of the commissioner is vacant, or when the commissioner is unable to perform

the duties of the office, the governor shall fill the position as provided in Section 67-1-1.5.

(3) The governor shall establish the commissioner's salary within the salary range approved by the

Legislature in Title 67, Chapter 22, State Officer Compensation.

Amended by Chapter 352, 2020 General Session

31A-2-103 Commissioner's appointees.

(1) The commissioner may appoint up to three persons to assist the commissioner. The

commissioner may designate a person appointed under this section as a "deputy,"

"administrative assistant," "secretary," or any other title chosen by the commissioner.

(2) Persons appointed under this section are exempt from career service status under Section

63A-17-301 and serve at the pleasure of the commissioner.

Amended by Chapter 345, 2021 General Session

31A-2-104 Other employees -- Insurance fraud investigators.

(1) The department shall employ professional, technical, and clerical employees as necessary to

carry out the duties of the department.

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(2) An insurance fraud investigator employed in accordance with Subsection (1) may as the

commissioner approves:

(a) be designated a law enforcement officer, as defined in Section 53-13-103; and

(b) be eligible for retirement benefits under the Public Safety Employee's Retirement System.

Amended by Chapter 32, 2020 General Session

31A-2-105 Constitutional oath.

Before entering upon the duties of his office, the commissioner shall take, subscribe, and file

the constitutional oath. If the commissioner takes action in his office before complying with this

section, in good faith and without knowledge of this requirement, and the validity of his action

is then challenged, that person may take the oath after the action and the oath shall be given

retroactive effect to the date on which he began his duties.

Amended by Chapter 305, 1993 General Session

31A-2-106 Ethical requirements for Insurance Department staff.

(1) No employee of the Insurance Department, including the commissioner, may:

(a) make any solicitation for any partisan political purpose or for anything that is not related to the

public interest, as it is affected by insurance; or

(b) continue or initiate a monetary relationship, except as policyholder, with an insurance agency

or brokerage firm, insurance service organization, insurance adjuster, insurer or person

affiliated with an insurer, except that:

(i) a commissioner may receive renewal commissions or other deferred compensation earned

before his appointment if this commission or compensation does not require him to

personally perform further service;

(ii) a commissioner may continue to be obligated under the terms of a mortgage entered into

prior to his appointment; and

(iii) a commissioner may continue to have the beneficial interest in or own stock in an insurer,

noninsurance company with insurance subsidiaries, insurance agency, brokerage firm,

or insurance service organization acquired before appointment if the commissioner's

ownership or interest is not of such total value that the commissioner might receive a

substantial monetary benefit by failing to act impartially towards the organization. A

partnership interest shall be treated as if it were shares in a corporation.

(2) If the commissioner has any beneficial interest or ownership in an organization outlined under

Subsection (1)(b)(iii), or if it is known to the commissioner that his spouse, parent, sibling, or

child has an interest in any organization that, if held by the commissioner, would disqualify

him from serving as commissioner, he shall disqualify himself from all actions respecting

the particular organization. The commissioner shall then delegate a senior staff member

who is not also disqualified to act in his place with regard to that organization. There is a

rebuttable presumption that the commissioner or the delegate service staff member knows of

any disqualifying holdings. The commissioner shall report a disqualification in each annual

report to the governor as long as the disqualification continues.

(3) The commissioner shall give the governor at least 10 days written notice of any solicitation to

be made by the commissioner or other member of the department staff.

(4) In addition to any other penalty, an employee violating this section may be removed from office.

Amended by Chapter 91, 1987 General Session

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31A-2-108 Legal services.

(1) Except as provided in Subsection (4), the commissioner shall call upon the attorney general

for the legal counsel and assistance necessary to enforce this title. Upon the commissioner's

request, or upon the attorney general's own initiative, the attorney general may hire special

legal counsel under Section 67-5-5 to represent the department.

(2) Upon the commissioner's request, or upon the commissioner's own initiative, the attorney

general may aid in any investigation, hearing, or other procedure under this title and may

institute, prosecute, and defend proceedings relating to the enforcement or interpretation of this

title, including any proceeding to which the state, or the commissioner or any employee of the

department in an official capacity, is a party or is interested.

(3) The commissioner may refer such evidence as is available concerning violations of this title or

of any rule or order under this title to the proper county attorney or district attorney, who may,

with or without this reference, institute the appropriate criminal proceedings.

(4) For proceedings authorized by Chapter 27a, Insurer Receivership Act, the commissioner

may employ on a contract basis legal counsel other than the attorney general, with the fees,

costs, and expenses of the counsel and the attorney general being a class one administrative

expense under Section 31A-27a-701.

Amended by Chapter 309, 2007 General Session

31A-2-109 Outside consultants.

The department may employ outside consultants on a contract or part-time basis to perform any

professional service needed by the department which cannot be performed by regular employees

of the department.

Enacted by Chapter 242, 1985 General Session

31A-2-110 Official seal and signature.

(1)

(a) Any statutory or common-law requirement that an official seal be affixed is satisfied by the

signature of the commissioner.

(b) However, the commissioner may adopt and use a seal bearing the words "Commissioner of

Insurance for Utah," an impression of which shall be filed with the Division of Archives.

(2) Any signature of the commissioner may be in a format that affixes an exact copy of the

signature, unless specifically required to be handwritten.

Amended by Chapter 32, 2020 General Session

31A-2-111 Delegation.

(1) Any power, duty, or function vested in the commissioner by law may be exercised, discharged,

or performed by an employee of the Insurance Department acting in the commissioner's name

and under his delegated authority.

(2) Any person whose own course of action depends in good faith upon proof of the validity of an

alleged delegation is not obligated to act until shown a written delegation of the commissioner

with the signature of the commissioner or deputy commissioner.

Enacted by Chapter 242, 1985 General Session

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31A-2-112 Advisory councils and committees.

The commissioner may create advisory councils and committees to assist him. He may appoint

members and provide by rule for the creation, governance, duties, and termination of any council

or committee established.

Enacted by Chapter 242, 1985 General Session

31A-2-113 Supporting services.

(1) The Department of Government Operations shall provide suitable offices for the Insurance

Department:

(a) in Salt Lake City; and

(b) elsewhere, if approved by the governor as necessary for the efficient operation of the

department.

(2) The commissioner shall, in accordance with the rules of the Department of Government

Operations or other applicable laws, procure or obtain access to all materials, supplies,

and equipment necessary for the efficient operation of the Insurance Department, including

reasonable library facilities and books.

Amended by Chapter 344, 2021 General Session

Part 2

Duties and Powers of Commissioner

31A-2-201 General duties and powers.

(1) The commissioner shall administer and enforce this title.

(2) The commissioner has all powers specifically granted, and all further powers that are

reasonable and necessary to enable the commissioner to perform the duties imposed by this

title.

(3)

(a) The commissioner may make rules to implement the provisions of this title according to the

procedures and requirements of Title 63G, Chapter 3, Utah Administrative Rulemaking Act.

(b) In addition to the notice requirements of Section 63G-3-301, the commissioner shall provide

notice under Section 31A-2-303 of hearings concerning insurance department rules.

(4)

(a) The commissioner shall issue prohibitory, mandatory, and other orders as necessary to

secure compliance with this title. An order by the commissioner is not effective unless the

order:

(i) is in writing; and

(ii) is signed by the commissioner or under the commissioner's authority.

(b) On request of any person who would be affected by an order under Subsection (4)(a), the

commissioner may issue a declaratory order to clarify the person's rights or duties.

(5)

(a) The commissioner may hold informal adjudicative proceedings and public meetings, for the

purpose of:

(i) investigation;

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(ii) ascertainment of public sentiment; or

(iii) informing the public.

(b) An effective rule or order may not result from informal hearings and meetings unless the

requirement of a hearing under this section is satisfied.

(6) The commissioner shall inquire into violations of this title and may conduct any examinations

and investigations of insurance matters, in addition to examinations and investigations

expressly authorized, that the commissioner considers proper to determine:

(a) whether or not any person has violated any provision of this title; or

(b) to secure information useful in the lawful administration of this title.

(7) The commissioner shall ensure that any training or certification required of a public official or

public employee, as those terms are defined in Section 63G-22-102, complies with Title 63G,

Chapter 22, State Training and Certification Requirements, if the training or certification is

required:

(a) under this title;

(b) by the department; or

Amended by Chapter 200, 2018 General Session

31A-2-201.1 General filing requirements.

Except as otherwise provided in this title, the commissioner may set by rule made in accordance

with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, specific requirements for filing any

of the following required by this title:

(1) a form;

(2) a rate;

(3) a report; or

(4) a binder for a health benefit plan or dental policy.

Amended by Chapter 319, 2018 General Session

31A-2-201.2 Evaluation of health insurance market.

(1)

(a) Each year the commissioner shall:

(i) conduct an evaluation of the state's health insurance market;

(ii) report the findings of the evaluation to the Office of Legislative Research and General

Counsel before February 1 of each year; and

(iii) publish the findings of the evaluation on the department website.

(b) After the president of the Senate and the speaker of the House of Representatives appoint

members to the Health and Human Services Interim Committee for the year in which the

Office of Legislative Research and General Counsel receives a report under this subsection,

the Office of Legislative Research and General Counsel shall provide a copy of the report to

each member of the committee.

(2) The evaluation required by this section shall:

(a) analyze the effectiveness of the insurance regulations and statutes in promoting a healthy,

competitive health insurance market that meets the needs of the state, and includes an

analysis of:

(i) the availability and marketing of individual and group products;

(ii) rate changes;

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(iii) coverage and demographic changes;

(iv) benefit trends;

(v) market share changes; and

(vi) accessibility;

(b) assess complaint ratios and trends within the health insurance market, which assessment

shall include complaint data from the Office of Consumer Health Assistance within the

department;

insurance market, administrative rules, and statutes;

(d) include claims loss ratio data for each health insurance company doing business in the state;

(e) include information about pharmacy benefit managers collected under Section 31A-46-301;

and

(f) include information, for each health insurance company doing business in the state, regarding:

(i) preauthorization determinations; and

(ii) adverse benefit determinations.

(3) When preparing the evaluation and report required by this section, the commissioner may seek

the input of insurers, employers, insured persons, providers, and others with an interest in the

health insurance market.

(4) The commissioner may adopt administrative rules for the purpose of collecting the data

required by this section, taking into account the business confidentiality of the insurers.

(5) Records submitted to the commissioner under this section shall be maintained by the

commissioner as protected records under Title 63G, Chapter 2, Government Records Access

and Management Act.

Amended by Chapter 120, 2024 General Session

31A-2-202 Reports and replies.

(1) When relevant, either directly or indirectly, to the performance of the commissioner's duties

under this title, the commissioner may require from any person subject to regulation under this

title:

(a) in whatever reasonable form and reasonable intervals the commissioner designates:

(i) a statement;

(ii) a report;

(iii) an answer to a questionnaire;

(iv) other information; and

(v) evidence of the information described in Subsections (1)(a)(i) through (iv);

(b) full explanation of the programming of any data storage or communication system in use;

information storage system be made available to the department:

(i) at any reasonable time; and

(ii) in any reasonable manner; and

(d) timely delivery to the National Association of Insurance Commissioners or other entity

that gathers insurance industry information, a copy of the statistical data prepared for and

submitted to the department, as specified by the commissioner.

(2)

(a) Subject to the requirements of this Subsection (2), the commissioner may:

(i) prescribe forms for the information under Subsection (1); and

(ii) specify who shall execute or certify the information under Subsection (1).

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(b) The forms prescribed under this Subsection (2) shall be consistent, to the extent practicable,

with those prescribed by other jurisdictions.

Association of Insurance Commissioners for:

(i) basic financial data; and

(ii) market regulation analysis.

(3)

(a) Subject to the requirements of this Subsection (3), the commissioner may prescribe

reasonable minimum standards and techniques of accounting and data handling to ensure

that timely and reliable information exists and can be made available.

(b) The standards and techniques prescribed under this Subsection (3) shall be consistent, to the

extent practicable, with those prescribed by other states.

(4)

(a) A person listed in Subsection (4)(b) shall reply promptly in writing or in other designated form

to a reasonable written inquiry from the commissioner.

(b) This Subsection (4) applies to any person with executive authority over or in charge of any

segment of the affairs of:

(i) an insurer authorized to do or doing an insurance business in this state;

(ii) the affiliate of an insurer authorized to do or doing an insurance business in this state; and

(iii) any other person licensed under this title.

(5) The commissioner may:

(a) require that any communication made under this section be verified; and

(b) specify by whom a communication shall be verified.

(6) All information submitted to the commissioner shall be accurate and complete.

(7) In the absence of actual malice, no communication to the commissioner required by law or by

the commissioner subjects the person making it to an action for damages for defamation.

Amended by Chapter 177, 2006 General Session

31A-2-203 Examinations and alternatives.

(1)

(a) When the commissioner determines that information is needed about a matter related to the

enforcement of this title, the commissioner may examine the affairs and condition of:

(i) a licensee under this title;

(ii) an applicant for a license under this title;

(iii) a person or organization of persons doing or in process of organizing to do an insurance

business in this state; or

(iv) a person who is not, but is required to be, licensed under this title.

(b) When reasonably necessary for an examination under Subsection (1)(a), the commissioner

may examine:

(i) so far as it relates to the examinee, an account, record, document, or evidence of a

transaction of:

(A) the insurer or other licensee;

(B) an officer or other person who has executive authority over or is in charge of any segment

of the examinee's affairs; or

(ii) a third party model or product used by the examinee.

(c)

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(i) On demand, an examinee under Subsection (1)(a) shall make available to the commissioner

for examination:

(A) the examinee's own account, record, file, document, or evidence of a transaction; and

(B) to the extent reasonably necessary for an examination, an account, record, file, document,

or evidence of a transaction of a person described under Subsection (1)(b).

(ii) Except as provided in Subsection (1)(c)(iii), failure to make an item described in Subsection

(1)(c)(i) available is concealment of records under Subsection 31A-27a-207(1)(e).

(iii) If an examinee is unable to obtain an account, record, file, document, or evidence of a

transaction from a person described under Subsection (1)(b), that failure is not concealment

of records if the examinee immediately terminates the relationship with the other person.

(d)

(i) The commissioner or an examiner may not remove an account, record, file, document,

evidence of a transaction, or other property of an examinee from the examinee's offices

unless:

(A) the examinee consents in writing; or

(B) a court grants permission.

(ii) The commissioner may make and remove a copy or abstract of the following described in

Subsection (1)(d)(i):

(A) an account;

(B) a record;

(D) a document;

(E) evidence of a transaction; or

(F) other property.

(2)

(a) Subject to the other provisions of this section, the commissioner shall examine as needed and

as otherwise provided by law:

(i) every insurer, both domestic and nondomestic;

(ii) every licensed rate service organization; and

(iii) any other licensee.

(b) The commissioner shall examine an insurer, both domestic and nondomestic, no less

frequently than once every five years, but the commissioner may use in lieu an examination

under Subsection (4) to satisfy this requirement.

service organization that has not been examined, or submitted an acceptable in lieu report

under Subsection (4), within the past five years.

(d)

(i) Any 25 persons who are policyholders, shareholders, or creditors of a domestic insurer may

by verified petition demand a hearing under Section 31A-2-301 to determine whether the

commissioner should conduct an unscheduled examination of the insurer.

(ii) Persons demanding the hearing under this Subsection (2)(d) shall be given an opportunity in

the hearing to present evidence that an examination of the insurer is necessary.

(iii) If the evidence justifies an examination, the commissioner shall order an examination.

(e)

(i) If the board of directors of a domestic insurer requests that the commissioner examine the

insurer, the commissioner shall examine the insurer as soon as reasonably possible.

(ii) If the examination requested under this Subsection (2)(e) is conducted within two years after

completion of a comprehensive examination by the commissioner, costs of the requested

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examination may not be deducted from premium taxes under Section 59-9-102 unless the

commissioner's order specifically provides for the deduction.

(f) A bail bond surety company, as defined in Section 31A-35-102, is exempt from:

(i) the five-year examination requirement in Subsection (2)(b);

(ii) the revocation under Subsection (2)(c); and

(iii) Subsections (2)(d) and (2)(e).

(3)

(a) The commissioner may order an independent audit or examination by one or more technical

experts, including a certified public accountant or actuary:

(i) in lieu of all or part of an examination under Subsection (1) or (2); or

(ii) in addition to an examination under Subsection (1) or (2).

(b) An audit or evaluation under this Subsection (3) is subject to Subsection (5), Section

31A-2-204, and Subsection 31A-2-205(4).

(4)

(a) In lieu of all or a part of an examination under this section, the commissioner may accept the

report of an examination made by:

(i) the insurance department of another state; or

(ii) another government agency in:

(A) this state;

(B) the federal government; or

(b) An examination by the commissioner under Subsection (1) or (2) or accepted by the

commissioner under this Subsection (4) may use:

(i) an audit completed by a certified public accountant; or

(ii) an actuarial evaluation made by an actuary approved by the commissioner.

(5)

(a) An examination may be comprehensive or limited with respect to the examinee's affairs and

condition. The commissioner shall determine the nature and scope of an examination, taking

into account all relevant factors, including:

(i) the length of time the examinee has been licensed in this state;

(ii) the nature of the business being examined;

(iii) the nature of the accounting or other records available;

(iv) one or more reports from:

(A) independent auditors; and

(B) self-certification entities; and

(v) the nature of examinations performed elsewhere.

(b) The examination of an alien insurer is limited to one or more insurance transactions and

assets in the United States, unless the commissioner orders otherwise after finding that

extraordinary circumstances necessitate a broader examination.

(6) To effectively administer this section, the commissioner:

(a) shall:

(i) maintain one or more effective financial condition and market regulation surveillance systems

including:

(A) financial and market analysis; and

(B) a review of insurance regulatory information system reports;

(ii) employ a priority scheduling method that focuses on insurers and other licensees most in

need of examination; and

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(iii) use examination management techniques similar to those outlined in the Financial

Condition Examination Handbook of the National Association of Insurance Commissioners;

and

(b) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, may make

rules pertaining to:

(i) a financial condition and market regulation surveillance system; and

(ii) annual financial reporting requirements similar to those outlined in the Annual Financial

Reporting Model Regulation of the National Association of Insurance Commissioners.

Amended by Chapter 349, 2009 General Session

31A-2-203.5 Procedures -- Adjudicative proceedings.

The commissioner of insurance shall comply with the procedures and requirements of Title 63G,

Chapter 4, Administrative Procedures Act, in its adjudicative proceedings.

Amended by Chapter 382, 2008 General Session

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;

(b) in drafting an examination report; or

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.

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

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(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.

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.

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.

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(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.

Amended by Chapter 194, 2023 General Session

31A-2-205 Examination costs.

(1)

(a) Except as provided in Subsection (3), an examinee that is one of the following shall reimburse

the department for the reasonable costs of examinations made under Sections 31A-2-203

and 31A-2-204:

(i) an insurer;

(ii) a rate service organization;

(iii) a subsidiary of an insurer or rate service organization; or

(iv) a life settlement provider.

(b) The following costs shall be reimbursed under this Subsection (1):

(i) actual travel expenses;

(ii) reasonable living expense allowance;

(iii) compensation at reasonable rates for all professionals reasonably employed for the

examination under Subsection (4);

(iv) the administration and supervisory expense of:

(A) the department; and

(B) the attorney general's office; and

(v) an amount necessary to cover fringe benefits authorized by the commissioner or provided

by law.

the examination manual sponsored by the National Association of Insurance Commissioners.

(d) This Subsection (1) applies to a surplus lines producer to the extent that the examinations are

of the surplus line producer's surplus lines business.

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(2) An insurer requesting the examination of one of its producers shall pay the cost of the

examination. Otherwise, the department shall pay the cost of examining a licensee other than

those specified under Subsection (1).

(3)

(a) On the examinee's request or at the commissioner's discretion, the department may pay all

or part of the costs of an examination whenever the commissioner finds that because of the

frequency of examinations or the financial condition of the examinee, imposition of the costs

would place an unreasonable burden on the examinee.

(b) The commissioner shall include in the commissioner's annual report information about any

instance in which the commissioner has applied this Subsection (3).

(4)

(a) A technical expert employed under Subsection 31A-2-203(3) shall present to the

commissioner a statement of all expenses incurred by the technical expert in conjunction with

an examination.

(b) The examined insurer shall, at the commissioner's direction, pay to a technical expert:

(i)

(A) actual travel expenses;

(B) reasonable living expenses; and

(ii) for expenses necessarily incurred as approved by the commissioner.

(i) a department examiner's:

(A) actual travel expenses; and

(B) reasonable living expenses; and

(ii) the compensation of department examiners involved in the examination.

(d)

(i) The examined insurer shall certify the consolidated account of all charges and expenses for

the examination.

(ii) The examined insurer shall:

(A) retain a copy of the consolidated account; and

(B) file a copy of the consolidated account with the department as a public record.

(e) An annual report of examination charges paid by examined insurers directly to persons

employed under Subsection 31A-2-203(3) or to department examiners shall be included with

the department's budget request.

(f) Amounts paid directly by examined insurers to persons employed under Subsection

31A-2-203(3) or to department examiners may not be deducted from the department's

appropriation.

(5)

(a) The amount payable under Subsection (1) is due 10 days after the day on which the

examinee is served with a detailed account of the costs.

(b) Payments received by the department under this Subsection (5) shall be handled as provided

by Section 31A-3-101.

(6)

(a) The commissioner may require an examinee under Subsection (1), or an insurer requesting

an examination under Subsection (2), either before or during an examination, to make

deposits with the state treasurer to pay the costs of examination.

(b) Any deposit made under this Subsection (6) shall be held in trust by the state treasurer until

applied to pay the department the costs payable under this section.

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shall refund the surplus.

(7) A domestic insurer may offset the examination expenses paid under this section against

premium taxes under Subsection 59-9-102(2).

Amended by Chapter 355, 2009 General Session

31A-2-206 Receipt and handling of deposits.

(1) As used in this chapter:

(a) "Custodian institution" means a financial institution in this state as defined under Section

7-1-103 that:

(i) has authority under Title 7, Chapter 5, Trust Business, to engage in a trust business; and

(ii) is approved by the commissioner to have custody of deposited securities, whether

physically, through the Federal Reserve book-entry system, or through a clearing

corporation as defined under Subsection 70A-8-101(1).

(b) "Federal Reserve book-entry system" means the computerized system sponsored by the

United States Department of the Treasury and certain other agencies and instrumentalities of

the United States for holding and transferring securities of the United States government and

other agencies and instrumentalities.

(2) Subject to the commissioner's approval and to the requirements of this section, the state

treasurer shall accept, and a custodian institution qualified under Subsection (1)(a) may accept:

(a) deposits required or permitted under this title or rules adopted under this title;

(b) deposits of domestic insurers or of alien insurers domiciled in this state if required by the laws

of other states as a prerequisite to authority to do an insurance business in other states; and

(3) Deposits authorized under Subsection (2) shall be of securities described in Subsection (7).

(4) Unless otherwise provided by the law requiring or permitting the deposit, each deposit shall be

held in trust:

(a) first, for administrative costs under Subsection 31A-27a-701(2)(a);

(b) second, for the claimants under Subsection 31A-27a-701(2)(c);

(d) fourth, for all other creditors in the order of priority established under Section 31A-27a-701.

(5) A claim may be made against the deposit of an alien insurer only if it arises out of a transaction

in the United States.

(6) Deposits may be made by:

(a) delivering physical custody and control of the deposited security to the state treasurer or a

custodian institution, accompanied by a statement signed by the depositor indicating that the

deposit shall be held in trust under the terms of this section and subject to the commissioner's

exclusive direction until control is released by the commissioner; or

(b) delivering to the commissioner, on a form adopted by rule, a signed certificate of a custodian

institution, describing securities qualifying for deposit under Subsection (7) that are on

deposit with a clearing corporation or held in the Federal Reserve book-entry system in the

name of the custodian institution, in trust for the purposes stated under this section, and that

these securities are subject to the exclusive direction of the commissioner and may not be

withdrawn or transferred by any person, including the insurer owning the securities, without

the commissioner's written approval.

(7)

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(a) Deposits may consist of any securities authorized in Subsection (7)(b) for which there is a

ready market if they:

(i) are expressly approved by the commissioner;

(ii) are subject to disposition by the state treasurer or custodian institution only with the

concurrence of the commissioner; and

(iii) are not available to any other person except as expressly provided by law.

(b) The authorized securities are:

(i) deposits or certificates of deposit insured by the Federal Deposit Insurance Corporation;

(ii) bonds or other evidences of indebtedness that are guaranteed as to principal and interest by

the United States;

(iii) tax anticipation bonds or notes, general obligation bonds, or revenue bonds of this state

or of any county, incorporated city or town, school district, or other political subdivision of

this state, if the bonds or notes are rated AAA by Standard and Poor's or an equivalent

nationally recognized rating agency;

(iv) bonds or other evidences of indebtedness issued or guaranteed by an agency or

instrumentality of the United States; and

(v) any other security approved by the commissioner that the commissioner considers an

equivalent grade investment to those enumerated under Subsections (7)(b)(i) through (iv)

based on tests of the safety of principal and liquidity.

(8) Securities held on deposit shall be valued under Section 31A-17-401 as those investments

are valued for life insurers, or at market, whichever is lower. The securities shall be revalued

whenever the commissioner requests to ensure continued compliance with the requirements of

this title.

(9)

(a) The state treasurer or custodian institution shall:

(i) deliver to the depositor a receipt for all securities deposited or held;

(ii) issue a duplicate copy of the receipt to the commissioner; and

(iii) permit the depositor to inspect its physically held securities at any reasonable time.

(b) On application of the depositor or when required by the law of any state or country or by the

order of any court of competent jurisdiction, the state treasurer or custodian institution shall

certify that the deposit was made and what is on deposit.

keep a permanent record of securities deposited or held under this section and of any

substitutions or withdrawals. They shall compare records at least annually.

(10) A transfer of a deposited security, whether voluntary or by operation of law, is valid only if

approved in writing by the commissioner and countersigned by the state treasurer or custodian

institution.

(11) Neither a judgment creditor nor other person may levy upon any deposit held under this

section.

(12) A depositor that has complied with all provisions of this title intended to preserve its financial

solidity is, while solvent and complying with the laws of this state, entitled to:

(a) receive interest and cash dividends accruing on the securities held for its account; and

(b) substitute for deposited securities other eligible securities, as expressly approved by the

commissioner.

(13) Within 45 days after the commissioner gives notice to a depositor that a deposit is not an

acceptable deposit under Subsection (7), the depositor shall substitute other eligible securities

expressly approved by the commissioner and allowed under Subsection (7).

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(14) A depositor may voluntarily deposit or transfer control of eligible securities in excess of

requirements to absorb fluctuations in value and to facilitate substitution of securities.

(15) Upon the depositor's request and upon approval of the commissioner, any deposit or part

of a deposit shall be released to, or on order of, the depositor to the extent not needed to

satisfy requirements of this title. On the order of a court of competent jurisdiction, the deposit or

appropriate part of the deposit shall be released to the person for whom it is held.

(16) Each depositor shall pay the cost of custody of securities by a custodian institution or by the

state treasurer.

(17) The commissioner shall adopt rules to implement this section.

Amended by Chapter 309, 2007 General Session

31A-2-207 Commissioner's records and reports -- Protection from disclosure of certain

records.

(1) The commissioner shall maintain all department records that are:

(a) required by law;

(b) necessary for the effective operation of the department; or

(2) The records of the department may be preserved, managed, stored, and made available for

review consistent with:

(a) another Utah statute;

(b) the rules made under Section 63A-12-104;

(d) the needs of the public.

(3) A department record may not be destroyed, damaged, or disposed of without:

(a) authorization of the commissioner; and

(b) compliance with all other applicable laws.

(4) The commissioner shall maintain a permanent record of the commissioner's proceedings and

important activities, including:

(a) a concise statement of the condition of each insurer examined by the commissioner; and

(b) a record of all certificates of authority and licenses issued by the commissioner.

(5)

(a) Prior to October 1 of each year, the commissioner shall prepare an annual report to the

governor which shall include, for the preceding calendar year, the information concerning the

department and the insurance industry which the commissioner believes will be useful to the

governor and the public.

(b) The report required by this Subsection (5) shall include the information required under

Chapter 27a, Insurer Receivership Act, and Subsections 31A-2-106(2), 31A-2-205(3), and

31A-2-208(3).

and industry in electronic format.

(6) All department records and reports are open to public inspection unless specifically provided

otherwise by statute or by Title 63G, Chapter 2, Government Records Access and Management

Act.

(7) On request, the commissioner shall provide to any person certified or uncertified copies of any

record in the department that is open to public inspection.

(8) Notwithstanding Subsection (6) and Title 63G, Chapter 2, Government Records Access and

Management Act, the commissioner shall protect from disclosure any record, as defined

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in Section 63G-2-103, or other document received from an insurance regulator of another

jurisdiction:

(a) at least to the same extent the record or document is protected from disclosure under the

laws applicable to the insurance regulator providing the record or document; or

(b) under the same terms and conditions of confidentiality as the National Association of

Insurance Commissioners requires as a condition of participating in any of the National

Association of Insurance Commissioners' programs.

Amended by Chapter 254, 2019 General Session

31A-2-208 Publications.

(1) The commissioner may prepare and distribute books, pamphlets, and other publications

relating to insurance. Except as otherwise provided under this title, the commissioner may

charge the cost of producing a publication to those desiring to receive the publication. Money

collected from subscription fees charged for a publication shall be deposited into the Relative

Value Study Restricted Account, created in Section 59-9-105, to be used as provided in Section

59-9-105.

(2) The commissioner shall have the annual report required in Subsection 31A-2-207(5) printed:

(a) in a form determined by the commissioner; and

(b) in sufficient numbers to meet requests for copies.

(3) The commissioner shall publish in the annual report required in Subsection 31A-2-207(5) an

up-to-date chart and explanation of the organization of the commissioner's office, making

clear the allocation of responsibility and authority among the staff. This up-to-date chart and

explanation shall be printed in sufficient numbers to meet requests for copies.

Amended by Chapter 284, 2011 General Session

31A-2-208.5 Comparison tables.

(1)

(a) The commissioner shall annually publish a table comparing the rates charged by insurers for

private passenger motor vehicle and homeowners insurance in this state.

(b) The comparison shall list the top 20 insurers writing the greatest volume by premium dollar

per calendar year and others requesting inclusion in the comparison.

comparison.

(2) In conjunction with the rate comparison described in Subsection (1), the commissioner shall

publish:

(a) a table listing, for each insurer compared, the ratio of confirmed complaints received by the

department to the premium dollar amount written by the insurer; and

(b) a table listing for each insurer the combined loss and expense ratio for the most current year

available.

(3) The department shall make copies of the tables available to the public at minimal or no cost.

Amended by Chapter 138, 2016 General Session

31A-2-209 Access to state records.

Subject to Title 63G, Chapter 2, Government Records Access and Management Act, the

commissioner shall have access to the records of any agency of the state government or of

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any political subdivision of the state which the commissioner may consult in discharging the

commissioner's duties.

Amended by Chapter 382, 2008 General Session

31A-2-210 Participation in organizations.

(1) The commissioner and the Insurance Department shall maintain close relations with the

commissioners of other states and shall participate in the activities and affairs of the NAIC

and other organizations to the extent, in the commissioner's judgment, these activities will

promote the purposes of the Insurance Code. The actual and necessary expenses incurred

by this participation shall be paid out of the Insurance Department appropriation. The

commissioner may not make any commitments that are not terminable on reasonable notice by

the commissioner.

(2) The commissioner shall participate in or provide support for participation in a professional

organization that represents states or legislatures for the purpose of preserving state

jurisdiction over the business of insurance.

Amended by Chapter 198, 2022 General Session

31A-2-211 Rules and forms during transition period.

(1) The commissioner's rules adopted under former Title 31 are rescinded unless continued under

Subsection (3).

(2) Between May 1, 1985, and July 1, 1986, the commissioner may prepare and adopt rules

to implement or supplement provisions under Title 31A, Insurance Code. These rules are

effective on July 1, 1986, or on the effective date of the particular provision, if that is later than

July 1, 1986.

(3) Every form used, issued, or required by the Insurance Department and approved by the

commissioner or otherwise legitimately in use immediately prior to the effective date of this title

may continue to be used until replaced in accordance with the provisions of this title.

Amended by Chapter 120, 2024 General Session

31A-2-212 Miscellaneous duties.

(1) Upon issuance of an order limiting, suspending, or revoking a person's authority to do business

in Utah, and when the commissioner begins a proceeding against an insurer under Chapter

27a, Insurer Receivership Act, the commissioner:

(a) shall notify by mail the producers of the person or insurer of whom the commissioner has

record; and

(b) may publish notice of the order or proceeding in any manner the commissioner considers

necessary to protect the rights of the public.

(2)

(a) When required for evidence in a legal proceeding, the commissioner shall furnish a certificate

of authority of a licensee to transact the business of insurance in Utah on any particular date.

(b) The court or other officer shall receive a certificate of authority described in this Subsection

(2) in lieu of the commissioner's testimony.

(3)

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(a) On the request of an insurer authorized to do a surety business, the commissioner shall

furnish a copy of the insurer's certificate of authority to a designated public officer in this state

who requires that certificate of authority before accepting a bond.

(b) The public officer described in Subsection (3)(a) shall file the certificate of authority furnished

under Subsection (3)(a).

necessary, while the certificate of authority remains effective, to attach a copy of it to any

instrument of suretyship filed with that public officer.

(d) Whenever the commissioner revokes the certificate of authority or begins a proceeding under

Chapter 27a, Insurer Receivership Act, against an insurer authorized to do a surety business,

the commissioner shall immediately give notice of that action to each public officer who is

sent a certified copy under this Subsection (3).

(4)

(a) The commissioner shall immediately notify every judge and clerk of the courts of record in the

state when:

(i) an authorized insurer doing a surety business:

(A) files a petition for receivership; or

(B) is in receivership; or

(ii) the commissioner has reason to believe that the authorized insurer doing surety business:

(A) is in financial difficulty; or

(B) has unreasonably failed to carry out any of the authorized insurer's contracts.

(b) Upon the receipt of the notice required by this Subsection (4), it is the duty of the judges and

clerks to notify and require a person that files with the court a bond on which the authorized

insurer doing surety business is surety to immediately file a new bond with a new surety.

(5)

(a) The commissioner shall require an insurer that issues, sells, renews, or offers health

insurance coverage in this state to comply with PPACA and administrative rules adopted by

the commissioner related to regulation of health benefit plans, including:

(i) lifetime and annual limits;

(ii) prohibition of rescissions;

(iii) coverage of preventive health services;

(iv) coverage for a child or dependent;

(v) pre-existing condition limitations;

(vi) insurer transparency of consumer information including plan disclosures, uniform coverage

documents, and standard definitions;

(vii) premium rate reviews;

(viii) essential health benefits;

(ix) provider choice;

(x) waiting periods;

(xi) appeals processes;

(xii) rating restrictions;

(xiii) uniform applications and notice provisions;

(xiv) certification and regulation of qualified health plans; and

(xv) network adequacy standards.

(b) The commissioner shall preserve state control over:

(i) the health insurance market in the state;

(ii) qualified health plans offered in the state; and

(iii) the conduct of navigators, producers, and in-person assisters operating in the state.

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Amended by Chapter 32, 2020 General Session

31A-2-213 Immunity.

(1)

(a) In the absence of actual malice, a person listed in Subsection (1)(b) is not subject to any civil

liability for any cause of action arising out of any communication, written or oral, made to:

(i) a law enforcement agency;

(ii) a governmental authority; or

(iii) the National Association of Insurance Commissioners.

(b) This section applies to:

(i) the commissioner;

(ii) an authorized representative of the commissioner;

(iii) an examiner appointed by the commissioner; or

(iv) any employee of the department.

(2) This section is not intended to abrogate or modify in any way any common-law or statutory

privilege or immunity enjoyed by any person.

Amended by Chapter 320, 2006 General Session

31A-2-214 Market assistance programs -- Joint underwriting associations.

(1)

(a) The commissioner may by rule implement a market assistance program whereby all

licensed insurers and producers may pool their information as to the available markets if the

commissioner finds that in any part of this state:

(i) a line of insurance:

(A) is not generally available in the marketplace; or

(B) is priced in such a manner as to severely limit its availability; and

(ii) the public interest requires availability of the line of insurance described in Subsection (1)(a)

(i).

(b) Insurers doing business in this state may, at their own instance or at the request of the

commissioner, prepare and submit to the commissioner, for the commissioner's approval and

adoption, voluntary plans providing any line of insurance coverage for all or any part of this

state in which:

(i) the line of insurance:

(A) is not generally available in the voluntary market; or

(B) is priced in such a manner as to severely limit its availability; and

(ii) the public interest requires the availability of the coverage described in Subsection (1)(b)(i).

(2)

(a) If the commissioner finds after notice and hearing that a market assistance program

formed under Subsection (1)(a) or (b) has not met the needs it was intended to address,

the commissioner may by rule form a joint underwriting association to make available the

insurance to applicants who are in good faith entitled to but unable to procure this insurance

through ordinary methods.

(b) The commissioner shall allow any market assistance program formed under Subsection (1)

(a) or (b) a minimum of 30 days operation before the commissioner forms a joint underwriting

association.

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Subsection (2)(a) unless the commissioner finds as a result of the hearing that:

(i) a certain coverage is not available or that the price for that coverage is no longer

commensurate with the risk in this state; and

(ii) the coverage is:

(A) vital to the economic health of this state;

(B) vital to the quality of life in this state;

(D) the number of people affected is significant enough to justify its creation.

(d) The commissioner may not adopt a rule forming a joint underwriting association under

Subsection (2)(a) on the basis that:

(i) applicants for particular lines of insurance are unable to pay a premium that is

commensurate with the risk involved; or

(ii) the number of applicants or people affected is too small to justify its creation.

(e) Each joint underwriting association formed under Subsection (2)(a) shall require participation

by all insurers licensed and engaged in writing that line of insurance or any component of that

line of insurance within this state.

(f) Each association formed under Subsection (2)(a) shall:

(i) give consideration to:

(A) the need for adequate and readily accessible coverage;

(B) alternative methods of improving the market affected;

(D) the inherent limitations of the insurance mechanism;

(E) the need for reasonable underwriting standards; and

(F) the requirement of reasonable loss prevention measures;

(ii) establish procedures that will create minimum interference with the voluntary market;

(iii) allocate the burden imposed by the association equitably and efficiently among the insurers

doing business in this state;

(iv) establish procedures for applicants and participants to have grievances reviewed by an

impartial body;

(v) provide for the method of classifying risks and making and filing applicable rates; and

(vi) specify:

(A) the basis of participation of insurers and producers in the association;

(B) the conditions under which risks must be accepted; and

(g) Any deficit in an association in any year shall be recouped by rate increases for the

association, applicable prospectively.

(h) Any surplus in excess of the loss reserves of the association in any year shall be distributed

either by rate decreases or by distribution to the members of the association on a pro-rata

basis.

(3) Notwithstanding Subsection (2), the commissioner may not create a joint underwriting

association under Subsection (2) for:

(a) life insurance;

(b) annuities;

(d) ocean marine insurance;

(e) medical malpractice insurance;

(f) earthquake insurance;

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(g) workers' compensation insurance; or

(h) private passenger automobile liability insurance.

(4) Every insurer and producer participating in a joint underwriting association adopted by the

commissioner under Subsection (2) shall provide the services prescribed by the association to

any person seeking coverage of the kind available in the plan, including full information about

the requirements and procedures for obtaining coverage with the association.

(5) If the commissioner finds that the lack of cooperating insurers or producers in an area makes

the functioning of the association difficult, the commissioner may order the association to:

(a) establish branch service offices;

(b) make special contracts for provision of the service; or

(6)

(a) The association may issue policies for a period of one year.

(b) If, at the end of any one year period, the commissioner determines that the market conditions

justify the continued existence of the association, the commissioner may reauthorize its

existence.

shall follow the procedure set forth in Subsection (2).

Amended by Chapter 298, 2003 General Session

31A-2-215 Consumer education.

(1) In furtherance of the purposes in Section 31A-1-102, the commissioner may educate

consumers about insurance and provide consumer assistance.

(2) Consumer education may include:

(a) outreach activities; and

(b) the production or collection and dissemination of educational materials.

(3) Consumer assistance may include:

(a) explaining:

(i) the terms of a policy;

(ii) a policy's complaint, grievance, or adverse benefit determination procedure; and

(iii) the fundamentals of self-advocacy; and

(b) informal efforts to negotiate a resolution of a dispute between a consumer and a licensee.

(4)

(a) Notwithstanding Subsection (3) and Section 31A-2-216, consumer assistance may not

include:

(i) commencing an administrative, judicial, or other proceeding against a licensee to obtain

specific relief from the licensee for a specific consumer; or

(ii) otherwise representing a consumer in any administrative, judicial, or other proceeding.

(5) Nothing in this section prohibits the commissioner from taking enforcement action for violations

under Section 31A-2-308.

(6) The commissioner may adopt rules necessary to implement the requirements of this section.

Amended by Chapter 120, 2024 General Session

31A-2-216 Office of Consumer Health Assistance.

(1) The commissioner shall establishan Office of Consumer Health Assistance before July 1, 1999.

(2) The office shall:

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(a) be a resource for health insurance consumers concerning health insurance coverage or the

need for such coverage;

(b) help health insurance consumers understand:

(i) contractual rights and responsibilities;

(ii) statutory protections; and

(iii) available remedies, including adverse benefit determination processes;

(i) by producing or collecting and disseminating educational materials to consumersand health

insurers; and

(ii) through outreach and other educational activities;

(d) for health insurance consumers that have difficulty in accessing their health insurance policies

because of language, disability, age, or ethnicity, provide information and services, directly or

through referral;

(e) analyze and monitor federal and state consumer health insurance statutes, rules, and

regulations; and

(f) summarize information gathered under this section and make the summaries available to the

public, government agencies, and the Legislature.

(3) The office may:

(a) obtain data from health insurance consumers as necessary to further the office's duties under

this section;

(b) investigate complaints and attempt to resolve complaints at the lowest possible level; and

arbitration, judicial, or related proceeding, unless the proceeding is in connection with an

enforcement action under Section 31A-2-308.

(4) The commissioner may adopt rules necessary to implement the requirements of this section.

Amended by Chapter 120, 2024 General Session

31A-2-217 Coordination with other states.

(1)

(a) Subject to Subsection (1)(b), the commissioner, by rule, may adopt one or more agreements

with a state governmental regulatory agency, within and outside of this state, or with the

National Association of Insurance Commissioners to address state regulatory issues limited

to:

(i) licensing of insurance companies;

(ii) licensing of agents;

(iii) regulation of premium rates and policy forms; and

(iv) regulation of insurer insolvency and insurance receiverships.

(b) An agreement described in Subsection (1)(a), may authorize the commissioner to modify

a requirement of this title if the commissioner determines that the requirements under the

agreement provide protections similar to or greater than the requirements under this title.

(2)

(a) The commissioner may negotiate an interstate compact that addresses issuing certificates of

authority, if the commissioner determines that:

(i) each state participating in the compact has requirements for issuing certificates of authority

that provide protections similar to or greater than the requirements of this title; or

(ii) the interstate compact contains requirements for issuing certificates of authority that provide

protections similar to or greater than the requirements of this title.

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(b) If an interstate compact described in Subsection (2)(a) is adopted by the Legislature, the

commissioner may issue certificates of authority to insurers in accordance with the terms of

the interstate compact.

(3) If any provision of this title conflicts with a provision of the annual statement instructions or

the National Association of Insurance Commissioners Accounting Practices and Procedures

Manual, the commissioner may, by rule, resolve the conflict in favor of the annual statement

instructions or the National Association of Insurance Commissioners Accounting Practices and

Procedures Manual.

(4) The commissioner may, by rule, accept the information prescribed by the National Association

of Insurance Commissioners instead of the documents required to be filed with an application

for a certificate of authority under:

(a) Section 31A-4-103, 31A-5-204, 31A-8-205, or 31A-14-201; or

(b) rules made by the commissioner.

(5) This section shall be repealed in accordance with Section 63I-1-231.

Amended by Chapter 43, 2013 General Session

Amended by Chapter 319, 2013 General Session

31A-2-218 Strategic plan for health system reform.

The commissioner and the department shall:

(1) facilitate a private sector method for the collection of health insurance premium payments made

for a single policy by multiple payers, including the policyholder, one or more employers of

one or more individuals covered by the policy, government programs, and others by educating

employers and insurers about collection services available through private vendors, including

financial institutions;

(2) encourage health insurers to develop products that:

(a) encourage health care providers to follow best practice protocols;

(b) incorporate other health care quality improvement mechanisms; and

Health Insurance Portability and Accountability Act;

(3) involve the Office of Consumer Health Assistance created in Section 31A-2-216, as necessary,

to accomplish the requirements of this section; and

(4) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, make rules, as

necessary, to implement Subsections (1) and (2).

Amended by Chapter 32, 2020 General Session

Amended by Chapter 354, 2020 General Session

31A-2-218.1 Section 1332 Waiver Study.

(1) As used in this section:

(a) "Secretary" means the secretary of the United States Department of Health and Human

Services.

(b) "Section 1332 waiver" means a waiver for state innovation under 45 C.F.R. Part 155, Subpart

(2) The commissioner shall conduct a study to determine the feasibility of a state-based program

designed to:

(a) lower health benefit plan insurance premiums; and

(b) increase stabilization in the market.

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(3) The commissioner, in the study described in Subsection (2), shall create a proposal for a

Section 1332 waiver that includes:

(a) a list of provisions the state should seek to waive and the rationale for waiving each provision;

(b) data, assumptions, targets, and other information sufficient to determine that the proposed

waiver will provide coverage at least as comprehensive as coverage that would be provided

absent the waiver;

provided absent the Section 1332 waiver;

(d) actuarial analyses, actuarial certifications, and financial modeling that:

(i) support the estimates that the proposal will comply with the comprehensive coverage

requirements, the affordability requirement, the scope of coverage requirement, and the

federal deficit requirement; and

(ii) include:

(A) a detailed 10-year budget plan that is deficit-neutral to the federal government;

(B) all costs to the state, including administrative costs, and other costs to the federal

government; and

insurance coverage in the state;

(e) proposed legislative changes to provide the state authority to implement the proposed waiver;

(f) implementation plans with a timeline;

(g) categories of covered individuals with high-cost medical conditions who may be reinsured

through the proposed waiver, including a recommendation for a multi-year phased-in

approach;

(h) reinsurance parameters, including co-insurance, attachment points, or limits;

(i) set premium reduction targets;

(j) a detailed plan for a budget and program implementation; and

(k) a complete application for submission to the secretary.

(4) To carry out the requirements in Subsections (2) and (3) the commissioner may partner or

contract with a person that the commissioner determines is appropriate, subject to Title 63G,

Chapter 6a, Utah Procurement Code.

(5) On or before November 1, 2024, the commissioner shall submit to the Business and Labor

Interim Committee a final written report describing the study described in this section.

Part 3

Procedures and Enforcement

31A-2-301 Special hearing officers -- Witness and mileage fees.

(1) If the commissioner considers it necessary because of the technicality or complexity of the

subject, the commissioner may appoint a special hearing officer from outside the department

staff and may contract for a reasonable professional fee for the services.

(2)

(a) In hearings before the commissioner, witness fees and reimbursement for mileage traveled, if

claimed, shall be allowed at the same rate as in district courts.

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(b) Witness fees and reimbursement for mileage, together with the actual expense necessarily

incurred in securing attendance of witnesses and their testimony, and the hearing officer's fee

and reasonable actual expenses, shall be paid by the Insurance Department.

(i) the hearing is incident to an examination for which costs are payable under Section

31A-2-205; or

(ii) the commissioner orders the persons involved in the hearing to reimburse the department

for hearing costs, which the commissioner may do if the commissioner had reasonable

cause to believe that the order which issued or might have issued was necessary.

(3) Whenever the commissioner is reimbursed for costs under this section, the expenditures may

not be charged against the department budget.

Amended by Chapter 297, 2011 General Session

31A-2-302 Commissioner's disapproval.

(1) When the law requires the commissioner's approval for a certain action without a deemer

clause, that approval shall be express. The commissioner's disapproval of an action is

assumed if the commissioner does not act within 60 days after receiving the application for

approval or give notice of the commissioner's reasonable extension of that time period with the

commissioner's reasons for the extension. Assumed disapproval under this subsection entitles

the aggrieved person to request agency action under Section 63G-4-201.

(2) When the law provides that a certain action is not effective if disapproved by the commissioner

within a certain period, the affirmative approval by the commissioner may make the action

effective at a designated earlier date, but not earlier than the date of the commissioner's

affirmative approval.

(3) Subsections (1) and (2) do not apply to the extent that the law specifically provides otherwise.

Amended by Chapter 297, 2011 General Session

31A-2-304 Auxiliary procedural powers.

The commissioner, or his delegate authorized for a particular matter over his handwritten

signature, may administer oaths, take testimony, issue subpoenas, and take depositions in

connection with any hearing, meeting, examination, investigation, or other proceeding that the

commissioner may conduct. The subpoena shall have the same effect and shall be served in the

same manner as if issued from a court of record. Sections 78B-1-131 and 78B-6-313 apply to the

enforcement of the process issued by the commissioner or his delegate.

Amended by Chapter 3, 2008 General Session

31A-2-305 Immunity from prosecution.

(1)

(a) If a natural person declines to appear, testify, or produce any record or document in

any proceeding instituted by the commissioner or in obedience to the subpoena of the

commissioner, the commissioner may petition a court with jurisdiction under Title 78A,

Judiciary and Judicial Administration, for an order to the person to attend, testify, or produce

records or documents as requested by the commissioner.

(b) In the event a witness asserts a privilege against self-incrimination, testimony and evidence

from the witness may be compelled pursuant to Title 77, Chapter 22b, Grants of Immunity.

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(2) If a person claims the privilege against self-incrimination and refuses to appear, testify, or

produce documents in response to probative evidence against the person in a proceeding to

revoke or suspend the person's license, and if the testimony or documents would have been

admissible as evidence in a court of law except for the Fifth Amendment privilege, the refusal to

appear, testify, or produce documents is, for noncriminal proceedings only, rebuttable evidence

of the facts on which the proceeding is based.

Amended by Chapter 401, 2023 General Session

31A-2-306 Judicial review -- Costs.

(1) A person aggrieved by a rule or order of the commissioner, or aggrieved by the commissioner's

failure to act when he has a duty to act, may obtain judicial review.

(2) The court reviewing agency actions governed by this title shall give priority to those actions and

shall hear and determine them promptly.

(3) Costs shall be awarded as in civil cases. If the court finds that the appeal from action or

inaction stemmed from the bad faith or malice of the commissioner, the court may award

reasonable attorney's fees to the prevailing petitioner. Section 63G-7-701 applies to the extent

the attorney's fees awarded under this subsection exceed $10,000 for any one appeal.

Amended by Chapter 267, 2004 General Session

31A-2-306.5 Stay of commissioner's decision pending administrative review or judicial

appeal.

(1) An order of the commissioner or a designee of the commissioner is not stayed by a petition for:

(a) administrative review;

(b) rehearing; or

(2) A person seeking to stay an order of the commissioner or a designee of the commissioner shall

seek a stay in accordance with:

(a) rules made by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative

Rulemaking Act, pending a petition for:

(i) administrative review; or

(ii) rehearing; or

(b) Section 63G-4-405, pending judicial review.

Amended by Chapter 382, 2008 General Session

31A-2-307 Declaratory interpretation of statutes -- Procedure.

(1) The commissioner or any other person with a substantial interest in the result may petition the

Third District Court for Salt Lake County for a declaratory judgment interpreting any provision of

this title as applied to stipulated facts.

(2) The court may require that notice be given to persons that may be affected by the judgment.

These persons may participate in the proceeding.

(3) The court in its discretion may require the commissioner and any other participating parties to

provide testimony and documentary evidence necessary for a fair disposition of the case.

(4) The court may decline to proceed on the petition if it believes the petition is frivolous, or the

declaratory relief is unnecessary or has the possibility of prejudicing persons who cannot

practicably be made parties to the proceeding.

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(5) The court may declare the meaning of the statute. The declaration has the effect of a final

judgment or decree.

(6) Any participating party may obtain judicial review of the decision.

(7) The costs of the proceeding shall be paid by the petitioner unless the commissioner is the

petitioner, in which case all parties shall bear their own costs. "Costs" means:

(a) fees of the clerk and marshal;

(b) fees of the court reporter or the transcriber of a tape of the proceedings for all or any part of

the transcript necessarily obtained for use in the case;

(d) fees for exemplification and copies of papers necessarily obtained for use in the case; and

(e) compensation of court-appointed experts or interpreters. Reimbursements shall be made to

the General Fund, and shall be added back to the department's budget, except to the extent

the department forwards a reimbursement to the attorney general's office, in which case the

attorney general's budget shall be credited with the reimbursement.

Amended by Chapter 101, 1988 General Session

31A-2-308 Enforcement penalties and procedures.

(1)

(a) A person who violates any insurance statute or rule or any order issued under Subsection

31A-2-201(4) shall forfeit to the state up to twice the amount of any profit gained from the

violation, in addition to any other forfeiture or penalty imposed.

(b)

(i) The commissioner may order an individual producer, surplus line producer, limited line

producer, managing general agent, reinsurance intermediary, adjuster, third party

administrator, navigator, or insurance consultant who violates an insurance statute or rule to

forfeit to the state not more than $2,500 for each violation.

(ii) The commissioner may order any other person who violates an insurance statute or rule to

forfeit to the state not more than $5,000 for each violation.

(c)

(i) The commissioner may order an individual producer, surplus line producer, limited line

producer, managing general agent, reinsurance intermediary, adjuster, third party

administrator, navigator, or insurance consultant who violates an order issued under

Subsection 31A-2-201(4) to forfeit to the state not more than $2,500 for each violation.

Each day the violation continues is a separate violation.

(ii) The commissioner may order any other person who violates an order issued under

Subsection 31A-2-201(4) to forfeit to the state not more than $5,000 for each violation.

Each day the violation continues is a separate violation.

(d) The commissioner may accept or compromise any forfeiture.

(2) When a person fails to comply with an order issued under Subsection 31A-2-201(4), including

a forfeiture order, the commissioner may file an action in any court of competent jurisdiction or

obtain a court order or judgment:

(a) enforcing the commissioner's order;

(b)

(i) directing compliance with the commissioner's order and restraining further violation of the

order; and

(ii) subjecting the person ordered to the procedures and sanctions available to the court for

punishing contempt if the failure to comply continues; or

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failure to comply continues after the filing of the complaint until judgment is rendered.

(3)

(a) The Utah Rules of Civil Procedure govern actions brought under Subsection (2), except that

the commissioner may file a complaint seeking a court-ordered forfeiture under Subsection

(2)(c) no sooner than two weeks after giving written notice of the commissioner's intention to

proceed under Subsection (2)(c).

(b) The commissioner's order issued under Subsection 31A-2-201(4) may contain a notice of

intention to seek a court-ordered forfeiture if the commissioner's order is disobeyed.

(4) If, after a court order is issued under Subsection (2), the person fails to comply with the

commissioner's order or judgment:

(a) the commissioner may certify the fact of the failure to the court by affidavit; and

(b) the court may, after a hearing following at least five days written notice to the parties subject

to the order or judgment, amend the order or judgment to add the forfeiture or forfeitures, as

prescribed in Subsection (2)(c), until the person complies.

(5)

(a) The proceeds of the forfeitures under this section, including collection expenses, shall be paid

into the General Fund.

(b) The expenses of collection shall be credited to the department's budget.

attorney general's office for its collection expenses under this section.

(6)

(a) Forfeitures and judgments under this section bear interest at the rate charged by the United

States Internal Revenue Service for past due taxes on the:

(i) date of entry of the commissioner's order under Subsection (1); or

(ii) date of judgment under Subsection (2).

(b) Interest accrues from the later of the dates described in Subsection (6)(a) until the forfeiture

and accrued interest are fully paid.

(7) A forfeiture may not be imposed under Subsection (2)(c) if:

(a) at the time the forfeiture action is commenced, the person was in compliance with the

commissioner's order; or

(b) the violation of the order occurred during the order's suspension.

(8) The commissioner may seek an injunction as an alternative to issuing an order under

Subsection 31A-2-201(4).

(9)

(a) A person is guilty of a class B misdemeanor if that person:

(i) intentionally violates:

(A) an insurance statute of this state; or

(B) an order issued under Subsection 31A-2-201(4);

(ii) intentionally permits a person over whom that person has authority to violate:

(A) an insurance statute of this state; or

(B) an order issued under Subsection 31A-2-201(4); or

(iii) intentionally aids any person in violating:

(A) an insurance statute of this state; or

(B) an order issued under Subsection 31A-2-201(4).

(b) Unless a specific criminal penalty is provided elsewhere in this title, the person may be fined

not more than:

(i) $10,000 if a corporation; or

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(ii) $5,000 if a person other than a corporation.

(d) As used in this Subsection (9), "intentionally" has the same meaning as under Subsection

76-2-103(1).

(10)

(a) A person who knowingly and intentionally violates Section 31A-4-102, 31A-8a-208,

31A-15-105, 31A-23a-116, or 31A-31-111 is guilty of a felony as provided in this Subsection

(10).

(b) When the value of the property, money, or other things obtained or sought to be obtained in

violation of Subsection (10)(a):

(i) is less than $5,000, a person is guilty of a third degree felony; or

(ii) is or exceeds $5,000, a person is guilty of a second degree felony.

(11)

(a) After a hearing, the commissioner may, in whole or in part, revoke, suspend, place on

probation, limit, or refuse to renew the licensee's license or certificate of authority:

(i) when a licensee of the department, other than a domestic insurer:

(A) persistently or substantially violates the insurance law; or

(B) violates an order of the commissioner under Subsection 31A-2-201(4);

(ii) if there are grounds for delinquency proceedings against the licensee under Section

31A-27a-207; or

(iii) if the licensee's methods and practices in the conduct of the licensee's business endanger,

or the licensee's financial resources are inadequate to safeguard, the legitimate interests of

the licensee's customers and the public.

(b) Additional license termination or probation provisions for licensees other than insurers are

set forth in Sections 31A-19a-303, 31A-19a-304, 31A-23a-111, 31A-23a-112, 31A-25-208,

31A-25-209, 31A-26-213, 31A-26-214, 31A-35-501, and 31A-35-503.

(12) The enforcement penalties and procedures set forth in this section are not exclusive, but are

cumulative of other rights and remedies the commissioner has pursuant to applicable law.

Amended by Chapter 120, 2024 General Session

31A-2-309 Service of process through state officer.

(1) The commissioner, or the lieutenant governor when the subject proceeding is brought by the

state, is the agent for receipt of service of a summons, notice, order, pleading, or other legal

process relating to a Utah court or administrative agency upon the following:

(a) an insurer authorized to do business in this state, while authorized to do business in this

state, and thereafter in a proceeding arising from or related to a transaction having a

connection with this state;

(b) a surplus lines insurer for a proceeding arising out of a contract of insurance that is subject

to the surplus lines law, or out of a certificate, cover note, or other confirmation of that type of

insurance;

31A-15-102(1) by doing an act specified in Subsection 31A-15-102(2), for a proceeding

arising out of a transaction that is subject to the unauthorized insurance law;

(d) a nonresident producer, consultant, adjuster, or third party administrator, while authorized

to do business in this state, and thereafter in a proceeding arising from or related to a

transaction having a connection with this state; and

(e) a reinsurer submitting to the commissioner's jurisdiction under Subsection 31A-17-404(11).

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(2) The following is considered to have irrevocably appointed the commissioner and lieutenant

governor as that person's agents in accordance with Subsection (1):

(a) a licensed insurer by applying for and receiving a certificate of authority;

(b) a surplus lines insurer by entering into a contract subject to the surplus lines law;

(d) a nonresident producer, consultant, adjuster, and third party administrator.

(3) The commissioner and lieutenant governor are also agents for an executor, administrator,

personal representative, receiver, trustee, or other successor in interest of a person specified

under Subsection (1).

(4) A litigant serving process on the commissioner or lieutenant governor under this section shall

pay the fee applicable under Section 31A-3-103.

(5) The right to substituted service under this section does not limit the right to serve a summons,

notice, order, pleading, demand, or other process upon a person in another manner provided

by law.

Amended by Chapter 32, 2020 General Session

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) the following are delivered personally or to the office of the official designated in Section

31A-2-309:

(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.

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."

Amended by Chapter 194, 2023 General Session

31A-2-311 Reciprocal enforcement of foreign decrees.

(1) As used in this section:

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(a) "Reciprocal state" means a state whose laws contain procedures substantially similar to those

specified in this section for the enforcement of decrees or orders issued by courts located in

other states against an insurer authorized to do business in the reciprocal state, and which

recognizes Utah as a reciprocal state under its law.

(b) "Foreign decree" means a decree or order of a court located in a reciprocal state, including a

United States court located in a reciprocal state against an insurer authorized to do business

in Utah.

(2) The commissioner shall determine which states qualify as reciprocal states and shall maintain a

list of them.

(3) The attorney general, upon request of the commissioner, may proceed in the courts of Utah or

any other state to enforce an order or decision issued in Utah in any court proceeding or in any

administrative proceeding before the insurance commissioner.

(4)

(a) A copy of any foreign court decree authenticated under Utah statutes or court rules may be

filed in the office of the clerk of the Third District Court for Salt Lake County. The clerk, upon

verifying with the commissioner that the decree or order qualifies as a foreign court decree,

shall treat it in the same manner and give it the same effect as a decree of a district court of

Utah.

(b)

(i) When filing the foreign decree, the filer shall deposit with the clerk of the court an affidavit

setting forth the name and last-known post-office address of the defendant in Utah.

(ii) When the foreign decree and the affidavit are filed, the clerk shall immediately mail notice

of the filing of the foreign decree to the defendant at the address given by the filer and

to the commissioner, and shall note the mailing in the docket. In addition, the attorney

general may mail a notice of the filing of the foreign decree to the defendant and to the

commissioner. Alternatively, the commissioner may mail a notice of the filing of the foreign

decree to the defendant, and either the attorney general or the commissioner may file proof

of this mailing with the clerk. The clerk's failure to mail notice of the filing does not affect the

enforcement proceedings if the attorney general or the commissioner has filed a proof of

mailing.

(iii) No execution or other process for enforcement of a foreign decree may issue until 30 days

after the foreign decree is filed.

(c)

(i) If the defendant shows the court that an appeal from the foreign decree is pending or will

be taken, or that a stay of execution has been granted, the court shall stay enforcement

of the foreign decree until the appeal is concluded, the time for appeal expires, or the stay

of execution expires or is vacated, upon proof by the defendant that he has furnished the

security for the satisfaction of the decree required by the state in which it was rendered.

(ii) If the defendant shows the court any ground upon which enforcement of a similar decree of

any district court of Utah would be stayed, the court shall stay enforcement of the foreign

decree for an appropriate period, upon proof by the defendant that he has furnished the

same security for satisfaction of the decree as is required in Utah.

(d) A person filing a foreign decree shall pay to the clerk of the court the same fee for an

enforcement proceeding as is required for enforcing a decree of the district court.

Enacted by Chapter 242, 1985 General Session

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Part 4

Title and Escrow Commission Act

31A-2-401 Title.

This part is known as the "Title and Escrow Commission Act."

Enacted by Chapter 185, 2005 General Session

31A-2-402 Definitions.

As used in this part:

(1) "Commission" means the Title and Escrow Commission created in Section 31A-2-403.

(2) "Concurrence" means the entities given a concurring role must jointly agree for the action to be

taken.

(3) "Dual licensed title licensee" means a title licensee who holds:

(a) an individual title insurance producer license as a title licensee; and

(b) a license or certificate under:

(i) Title 61, Chapter 2c, Utah Residential Mortgage Practices and Licensing Act;

(ii) Title 61, Chapter 2f, Real Estate Licensing and Practices Act; or

(iii) Title 61, Chapter 2g, Real Estate Appraiser Licensing and Certification Act.

(4) "Real Estate Commission" means the Real Estate Commission created in Section 61-2f-103.

(5) "Title insurance matter" means a matter related to:

(a) title insurance;

(b) an escrow conducted by an individual title insurance producer or agency title insurance

producer;

(d) conduct of a title licensee.

(6) "Title licensee" means a person licensed under this title as:

(a) an agency title insurance producer with a title insurance line of authority;

(b) an individual title insurance producer with:

(i) a general title insurance line of authority; or

(ii) a specific category of authority for title insurance; or

Amended by Chapter 330, 2015 General Session

31A-2-403 Title and Escrow Commission created.

(1)

(a) Subject to Subsection (1)(b), there is created within the department the Title and Escrow

Commission that is comprised of five members who shall be, in accordance with Title 63G,

Chapter 24, Part 2, Vacancies, appointed by the governor with the advice and consent of the

Senate as follows:

(i) except as provided in Subsection (1)(d), two members shall be employees of a title insurer;

(ii) two members shall:

(A) be employees of a Utah agency title insurance producer;

(B) be or have been licensed under the title insurance line of authority;

examination or escrow subline of authority for at least five years; and

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(D) as of the day on which the member is appointed, not be from the same county as another

member appointed under this Subsection (1)(a)(ii); and

(iii) one member shall be a member of the general public from any county in the state.

(b) No more than one commission member may be appointed from a single company or an

affiliate or subsidiary of the company.

affiliated business arrangement, as defined in Section 31A-23a-1001.

(d) If the governor is unable to identify more than one individual who is an employee of a title

insurer and willing to serve as a member of the commission, the commission shall include the

following members in lieu of the members described in Subsection (1)(a)(i):

(i) one member who is an employee of a title insurer; and

(ii) one member who is an employee of a Utah agency title insurance producer.

(2)

(a) Subject to Subsection (2)(c), a commission member shall comply with the conflict of interest

provisions described in Title 63G, Chapter 24, Part 3, Conflicts of Interest, and file with the

commissioner a disclosure of any position of employment or ownership interest that the

commission member has with respect to a person that is subject to the jurisdiction of the

commissioner.

(b) The disclosure statement required by this Subsection (2) shall be:

(i) filed by no later than the day on which the person begins that person's appointment; and

(ii) amended when a significant change occurs in any matter required to be disclosed under this

Subsection (2).

member has if the ownership interest is in a publicly traded company or held as part of a

mutual fund, trust, or similar investment.

(3)

(a) Except as required by Subsection (3)(b), as terms of current commission members expire, the

governor shall appoint each new commission member to a four-year term ending on June 30.

(b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the time of

appointment, adjust the length of terms to ensure that the terms of the commission members

are staggered so that approximately half of the members appointed under Subsection (1)(a)(i)

and half of the members appointed under Subsection (1)(a)(ii) are appointed every two years.

(d) When a vacancy occurs in the membership for any reason, the governor, with the advice and

consent of the Senate, shall appoint a replacement for the unexpired term.

(e) Notwithstanding the other provisions of this Subsection (3), a commission member serves

until a successor is appointed by the governor with the advice and consent of the Senate.

(4) A commission member may not receive compensation or benefits for the commission member's

service, but may receive per diem and travel expenses in accordance with:

(a) Section 63A-3-106;

(b) Section 63A-3-107; and

(5) Members of the commission shall annually select one commission member to serve as chair.

(6)

(a)

(i) Except as provided in Subsection (6)(b), the commission shall meet at least monthly.

(ii)

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(A) The commissioner shall, with the concurrence of the chair of the commission, designate

one monthly meeting per calendar year as an in-person meeting.

(B) A commission member may, after providing advance notice to the commissioner, attend

an in-person meeting through electronic means.

(b)

(i) Except as provided in Subsection (6)(b)(ii), the commissioner may, with the concurrence

of the chair of the commission, cancel a monthly meeting of the commission if, due to the

number or nature of pending title insurance matters, the monthly meeting is not necessary.

(ii) The commissioner may not cancel a monthly meeting designated as an in-person meeting

under Subsection (6)(a)(ii)(A).

(i) at the commissioner's discretion;

(ii) upon the request of the chair of the commission; or

(iii) upon the written request of three or more commission members.

(d)

(i) Three commission members constitute a quorum for the transaction of business.

(ii) The action of a majority of the commission members when a quorum is present is the action

of the commission.

(7) The commissioner shall staff the commission.

Amended by Chapter 198, 2022 General Session

31A-2-404 Duties of the commissioner and Title and Escrow Commission.

(1)

(a) Notwithstanding the other provisions of this chapter, to the extent provided in this part,

the commissioner shall administer and enforce the provisions in this title related to a title

insurance matter.

(b)

(i) The commissioner may impose a penalty:

(A) under this title related to a title insurance matter;

(B) after investigation by the commissioner in accordance with Part 3, Procedures and

Enforcement; and

(ii) The commissioner shall consult with and seek concurrence of the commission in a meeting

subject to Title 52, Chapter 4, Open and Public Meetings Act, regarding the imposition of a

penalty, and if concurrence cannot be reached, the commissioner has final authority.

has authority over the implementation of this title related to a title insurance matter. When a

provision requires concurrence between the commission and commissioner, and concurrence

cannot be reached, the commissioner has final authority.

(d) Except as provided in Subsection (1)(e), when this title requires concurrence between the

commissioner and commission related to a title insurance matter:

(i) the commissioner shall report to and update the commission on a regular basis related to

that title insurance matter; and

(ii) the commission shall review the report submitted by the commissioner under this

Subsection (1)(d) and concur with the report, or:

(A) provide a reason for not concurring with the report; and

(B) provide recommendations to the commissioner.

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(e) When this title requires concurrence between the commissioner and commission under

Subsection (2), (3), or (4):

(i) the commission shall report to and update the commissioner on a regular basis related to

that title insurance matter; and

(ii) the commissioner shall review a report submitted by the commission under this Subsection

(1)(e) and concur with the report or:

(A) provide a reason for not concurring with the report; and

(B) provide recommendations to the commission.

(2) The commission shall:

(a) subject to Subsection (4), make rules for the administration of the provisions in this title

related to title insurance matters including rules related to:

(i) rating standards and rating methods for a title licensee, as provided in Section 31A-19a-209;

(ii) the licensing for a title licensee, including the licensing requirements of Section

31A-23a-204;

(iii) continuing education requirements of Section 31A-23a-202; and

(iv) standards of conduct for a title licensee;

(b) concur in the issuance and renewal of a license in accordance with Section 31A-23a-105 or

31A-26-203;

the fees imposed by this title on a title licensee;

(d) in accordance with Section 31A-23a-415 determine, after consulting with the commissioner,

the assessment on a title insurer as defined in Section 31A-23a-415;

(e) with the concurrence of the commissioner, approve a continuing education program required

by Section 31A-23a-202;

(f) on a regular basis advise the commissioner of the most critical matters affecting the title

insurance industry and request the commissioner to direct the department's investigative

resources to investigate and enforce those matters;

(g) in accordance with Section 31A-23a-204, participate in the annual license testing evaluation

conducted by the commissioner's test administrator;

(h) advise the commissioner on matters affecting the commissioner's budget related to title

insurance; and

(i) perform other duties as provided in this title.

(3) The commission may make rules establishing an examination for a license that will satisfy

Section 31A-23a-204:

(a) after consultation with the commissioner's test administrator; and

(b) subject to Subsection (4).

(4)

(a) The commission may make a rule under this title only:

(i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;

(ii) with the concurrence of the commissioner, except that if concurrence cannot be reached,

the commissioner has final authority; and

(iii) if at the time the commission files its proposed rule and rule analysis with the Office of

Administrative Rules in accordance with Section 63G-3-301, the commission provides the

Real Estate Commission that same information.

(b) The commission may not make a rule regarding adjudicative procedures.

adjudicative procedures.

(5)

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(a) The commissioner shall annually report the information described in Subsection (5)(b) in

writing to the commission.

(b) The information required to be reported under this Subsection (5):

(i) may not identify a person; and

(ii) shall include:

(A) the number of complaints the commissioner receives with regard to transactions involving

title insurance or a title licensee during the calendar year immediately proceeding the

report;

(B) the type of complaints described in Subsection (5)(b)(ii)(A); and

(I) any action taken by the commissioner with regard to the complaint; and

(II) the time-period beginning the day on which a complaint is made and ending the day

on which the commissioner determines it will take no further action with regard to the

complaint.

Amended by Chapter 193, 2016 General Session

31A-2-405 Dual licensing.

(1) A dual licensed title licensee may provide a title insurance product or service under this title

only if before providing that title insurance product or service the dual licensed title licensee

obtains approval as provided in this section.

(2)

(a) Except as provided in Subsection (3), a dual licensed title licensee shall obtain approval from

the commissioner by filing under penalty of perjury with the department:

(i) a statement that includes:

(A) a description of the title insurance product or service to be provided;

(B) the names of the principals anticipated to be involved in the provision or receipt of the title

insurance product or service;

(D) whether or not the dual licensed title licensee received any consideration from a person

described in Subsection (2)(a)(i)(B) within 18 months prior to the day on which the dual

licensed title licensee files the statement; and

(E) any other information the commission requires by rule made in accordance with this

section and Section 31A-2-404; and

(ii) the fee applicable under Section 31A-3-103.

(b) The commissioner shall approve the provision of a title insurance product or service under

this section if the commissioner finds that the dual licensed title licensee:

(i) completed the filing required by Subsection (2)(a);

(ii) is acting in good faith; and

(iii) has not received consideration from a person described in Subsection (2)(a)(i)(B) within the

18-month period described in Subsection (2)(a)(i)(D).

considered to have approved the provision of the title insurance product or service the earlier

of:

(i) the day on which the commissioner issues the commissioner's approval in writing; or

(ii) 15 days after the day on which the dual licensed title licensee completes the filing under

Subsection (2)(a).

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(3) Notwithstanding Subsection (2), a dual licensed title licensee may obtain approval from the

chair of the commission if:

(a) the dual licensed title licensee completes the filing under Subsection (2)(a);

(b) the dual licensed title licensee establishes a need for expedited approval; and

Subsection (2)(b).

(4) The commissioner shall revoke the license under this title of a dual licensed title licensee if the

dual licensed title licensee:

(a) provides a title insurance product or service without the approval required by this section; or

(b) knowingly provides false or misleading information in the statement required by Subsection

(2).

(5) The commission may make rules, subject to Section 31A-2-404, to implement the filing

requirements under Subsection (2), including the definition of terms.

Enacted by Chapter 325, 2007 General Session

Chapter 3

Department Funding, Fees, and Taxes

Part 1

Funding the Insurance Department

31A-3-101 General finance provisions.

Department expenditures shall conform to the Legislature's appropriation adopted under Title

63J, Chapter 1, Budgetary Procedures Act.

Amended by Chapter 284, 2011 General Session

31A-3-102 Exclusive fees and taxes.

(1) The following are in place of any other license fee or license assessment that might otherwise

be levied against a licensee by the state or a political subdivision of the state:

(a) subject to Subsection (4), taxes and fees under this chapter;

(b) the premium taxes under Title 59, Chapter 9, Taxation of Admitted Insurers;

(d) the examination costs under Section 31A-2-205.

(2) The following are not subject to Title 59, Chapter 7, Corporate Franchise and Income Taxes:

(a) an insurer that is subject to premium taxes under Title 59, Chapter 9, Taxation of Admitted

Insurers, regardless of whether the insurance company has a tax liability under that chapter;

(b) an insurance company that engages in a transaction that is subject to taxes under Section

31A-3-301 or 31A-3-302, regardless of whether the insurance company has a tax liability

under that section; and

under Section 31A-3-304.

(3) Unless otherwise exempt, a licensee under this title is subject to real and personal property

taxes.

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(4) A tax or fee under this chapter is not in place of a tax or fee a municipality or county imposes in

accordance with Section 10-1-203 or 17-53-216.

Amended by Chapter 127, 2020 General Session

31A-3-103 Fees.

(1) For purposes of this section, "services" means functions that are reasonable and necessary to

enable the commissioner to perform the duties imposed by this title including:

(a) issuing or renewing a license or certificate of authority;

(b) filing a policy form;

(d) filing an annual statement.

(2) Except as otherwise provided by this title:

(a) the commissioner may set and collect a fee for services provided by the commissioner;

(b) a fee related to the renewal of a license may be imposed no more frequently than once each

year; and

(3)

(a) The commissioner shall publish a schedule of fees established pursuant to this section.

(b) The commissioner shall, by rule, establish the deadlines for payment of a fee established

pursuant to this section.

(4)

(a) Beginning July 1, 2011, there is created in the General Fund a restricted account known as

the "Insurance Department Restricted Account."

(b) Except as provided in Subsection (4)(c), the Insurance Department Restricted Account shall

consist of:

(i) fees authorized by this section; and

(ii) other money received by the department, including:

(A) reimbursements for examination costs incurred by the department; and

(B) forfeitures collected under this title.

or enterprise fund created by this title into the restricted account or enterprise fund in

accordance with the statute creating the restricted account or enterprise fund, and the

department may not deposit the money into the Insurance Department Restricted Account.

(d) Subject to appropriation by the Legislature, the department may expend money in the

Insurance Department Restricted Account to fund the operations of the department.

(e) At the end of each fiscal year, the director of the Division of Finance shall transfer into the

General Fund any money deposited into the Insurance Department Restricted Account under

Subsection (4)(b) that exceeds the legislative appropriations from the Insurance Department

Restricted Account for that year.

Amended by Chapter 284, 2011 General Session

31A-3-104 Technology fees -- Restricted account.

(1) The commissioner may impose a fee for requests for information:

(a) that is obtained from an electronic database of the commissioner; or

(b) derived from data that is generated by electronic means.

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(2) In addition to any fee authorized in this title, the commissioner shall impose a supplemental fee

on the issuance or renewal of any of the following issued by the department:

(a) a license;

(b) a registration; or

(3) A fee imposed under this section shall be:

(a) established in accordance with Section 31A-3-103; and

(b) deposited into the Technology Development Restricted Account.

(4)

(a) There is created in the General Fund a restricted account known as the "Technology

Development Restricted Account."

(b) The Technology Development Restricted Account shall consist of the fees imposed by the

commissioner in accordance with this section.

to appropriations by the Legislature, the commissioner shall use the money deposited into the

Technology Development Restricted Account to provide services through use of electronic

commerce or other similar technology.

(d) An appropriation from the Technology Development Restricted Account is nonlapsing.

Amended by Chapter 10, 2010 General Session

Amended by Chapter 265, 2010 General Session, (Coordination Clause)

31A-3-105 Criminal Background Check Restricted Account.

(1) There is created in the General Fund a restricted account known as the "Criminal Background

Check Restricted Account."

(2) The Criminal Background Check Restricted Account shall consist of the fees imposed by the

commissioner in accordance with:

(a) Subsection 31A-16-103(3);

(b) Subsection 31A-23a-105(3);

(d) Subsection 31A-26-203(3).

(3) The commissioner shall administer the Criminal Background Check Restricted Account.

Subject to appropriations by the Legislature, the commissioner shall use the money deposited

into the Criminal Background Check Restricted Account to pay the costs the department is

required to pay related to obtaining criminal background information in accordance with the

provisions listed in Subsection (2)(a).

(4) An appropriation from the Criminal Background Check Restricted Account is nonlapsing.

Enacted by Chapter 10, 2010 General Session

Amended by Chapter 265, 2010 General Session, (Coordination Clause)

31A-3-205 Taxation of insurance companies.

(1) An admitted insurer shall pay to the State Tax Commission taxes imposed on the admitted

insurer by Title 59, Revenue and Taxation.

(2) A surplus lines insurer shall pay the taxes due under Section 31A-3-301 or 31A-3-302 in

accordance with Section 31A-3-303.

Amended by Chapter 168, 2017 General Session

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Part 3

Taxation of Surplus Lines, Illegal Transactions, and Captive Insurance Companies

31A-3-301 Tax imposed on surplus lines insurance transactions.

(1)

(a) An insurance transaction under Section 31A-15-103 is subject to a tax of 4-1/4% of gross

premiums, less 4-1/4% of return premiums paid to insureds by reason of policy cancellations

or premium reductions.

(b) "Gross premium," for a surplus lines insurance transaction, means the monetary

consideration for an insurance policy including the fees charged to the insured, however

designated.

(2) The tax imposed by this section does not apply to:

(a) ocean marine insurance;

(b) insurance premiums paid by institutions within the state system of higher education as

specified in Section 53B-1-102; or

(3) The department shall deposit a tax imposed by this section in the General Fund.

(4)

(a) A county, city, or municipality within the state may not impose an occupation tax or other tax

or fee on a surplus lines insurance transaction.

(b) Notwithstanding Subsection (4)(a), an insurer, producer, or policyholder may be subject to

other taxes not described in Subsection (4)(a).

Amended by Chapter 275, 2011 General Session

31A-3-302 Tax on illegal transactions.

An insurance transaction under Chapter 15, Unauthorized Insurers, Surplus Lines, and Risk

Retention Groups, which violates the restrictions placed on transactions by that chapter shall be

taxed at a rate four percentage points higher than the applicable rate under Section 59-9-101.

Amended by Chapter 2, 1987 General Session

31A-3-303 Payment of tax.

(1)

(a) An insurer, the producers involved in the transaction, and the policyholder are jointly and

severally liable for the payment of the taxes required under Section 31A-3-301.

(b) The policyholder's liability for payment of the premium tax under Section 31A-3-301 ends

when the policyholder pays the tax to a producer or an insurer.

the payment of the additional tax required under Section 31A-3-302.

(d) Except for the tax under Section 31A-3-302, the policyholder shall pay a tax under this part

and shall be billed specifically for the tax when billed for the premium.

(e) Except for the tax imposed under Section 31A-3-302, absorption of the tax by the producer or

insurer is an unfair method of competition under Sections 31A-23a-402 and 31A-23a-402.5.

(2)

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(a) The commissioner shall by rule prescribe accounting and reporting forms and procedures for

insurers, producers, and policyholders to use in determining the amount of taxes owed under

this part, and the manner and time of payment.

(b) If a tax is not paid within the time prescribed under the commissioner's rule, a penalty shall

be imposed of 25% of the tax due, plus 1-1/2% per month from the time of default until full

payment of the tax.

(3) Upon making a record of its actions, and upon reasonable cause shown, the commissioner may

waive, reduce, or compromise any of the penalties or interest imposed under this part.

(4) When Utah is the home state, premiums for surplus lines insurance are taxable in full.

(5) Subject to Section 31A-3-305, the premium taxes collected under this part by a producer or by

an insurer are the property of this state.

(6) If the property of a producer is seized under any process in a court in this state, or if a

producer's business is suspended by the action of creditors or put into the hands of an

assignee, receiver, or trustee, the taxes and penalties due this state under this part are

preferred claims and the state is to that extent a preferred creditor.

Amended by Chapter 319, 2018 General Session

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.

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."

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(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;

(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.

Amended by Chapter 194, 2023 General Session

31A-3-305 Agreement related to nonadmitted insurance taxes.

(1) As used in this section:

(a) "Agreement" means a cooperative agreement, reciprocal agreement, or compact with one or

more other states.

(b)

(i) "Home state," except as provided in Subsections (1)(b)(ii) and (iii), with respect to an

insured, means:

(A) the state in which the insured maintains its principal place of business or, in the case of an

individual, the individual's principal residence; or

(B) if 100% of the insured risk is located out of the state described in Subsection (1)(b)(i)

(A), the state to which the greatest percentage of the insured's taxable premium for that

insurance contract is allocated.

(ii) If more than one insured from an affiliated group are named insureds on a single

nonadmitted insurance contract, "home state" means the home state determined under

Subsection (1)(b)(i) of the member of the affiliated group that has the largest percentage of

premium attributed to it under the nonadmitted insurance contract.

(iii)

(A) When a group policyholder pays 100% of the premium from its own money, "home state"

means the home state determined under Subsection (1)(b)(i) of the group policy holder.

(B) When a group policyholder does not pay 100% of the premium from its own money,

"home state" means the home state determined under Subsection (1)(b)(i) of the group

member.

means:

(i) the state where the insured maintains its headquarters and where the insured's high-level

officers direct, control, and coordinate the business activities;

(ii) if the insured's high-level officers direct, control, and coordinate the business activities in

more than one state, the state in which the greatest percentage of the insured's taxable

premium for that insurance contract is allocated; or

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(iii) if the insured maintains its headquarters or the insured's high-level officers direct, control,

and coordinate the business activities outside any state, the state to which the greatest

percentage of the insured's taxable premium for that insurance contract is allocated.

(d) "Principal residence," with respect to determining the home state of an insured, means:

(i) the state where the insured resides for the greatest number of days during a calendar year;

(ii) if the insured's principal residence is located outside any state, the state to which the

greatest percentage of the insured's taxable premium for that insurance contract is

allocated.

(2) The commissioner may enter into an agreement to:

(a) facilitate the collection, allocation, and disbursement of premium taxes attributable to the

placement of nonadmitted insurance;

(b) provide for uniform methods of allocation and reporting among nonadmitted insurance risk

classifications; and

(3) If the commissioner enters into an agreement under Subsection (2), the following apply:

(a) In addition to the full amount of gross premiums charged by the insurer for the insurance, a

surplus lines producer shall collect and pay to the commissioner a sum based on the total

gross premiums charged, less any return premiums, for surplus lines insurance provided by

the surplus lines producer.

(b) When surplus lines insurance covers property, risks, or exposures located or to be performed

in and out of this state, the sum payable is calculated as follows:

(i) calculate an amount equal to the applicable tax rates under this part on that portion of the

gross premiums allocated to this state pursuant to the agreement;

(ii) add to the amount under Subsection (3)(b)(i) an amount equal to the portion of the

premiums allocated to other states or territories on the basis of the tax rates and fees

applicable to properties, risks, or exposures located or to be performed outside of this state

pursuant to the agreement; and

(iii) subtract from the amount under Subsection (3)(b)(ii) the amount of gross premiums

allocated to this state and returned to the insured.

credited by the state to the licensee shall be returned to the policyholder directly by the

surplus lines producer. A surplus lines producer may not absorb or rebate, for any reason,

any part of the tax.

(4) The commissioner may participate in a clearinghouse established through an agreement

described in Subsection (2) for the purpose of collecting or disbursing to reciprocal states any

money collected pursuant to Subsection (3) applicable to properties, risks, or exposures located

or to be performed outside of this state. To the extent that other states where portions of the

properties, risks, or exposures reside have failed to enter into an agreement with this state, the

state shall retain the net premium tax collected.

(5) The commissioner may adopt an allocation schedule included in an agreement described in

Subsection (2) for the purpose of allocating risk and computing the tax due on the portion of

premium attributable to each risk classification and to each state where properties, risks, or

exposures reside.

(6) The commissioner may apply the definition of "home state" in Subsection (1) when

implementing an agreement described in Subsection (2).

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(7) The commissioner shall submit, in accordance with Section 68-3-14, a written report to the

Business and Labor Interim Committee regarding the nature and status of any agreement into

which the commissioner enters under Subsection (2).

Amended by Chapter 18, 2017 General Session

Part 4

Retaliation

31A-3-401 Retaliation against insurers of foreign state or country.

(1) Except as provided in Section 31A-3-402, when, under the laws of another state or foreign

country any taxes, licenses, other fees, deposit requirements, or other material obligations,

prohibitions, or restrictions are or would be imposed on Utah insurers, or on the agents or

representatives of Utah insurers, that are in excess of the taxes, licenses, other fees, deposit

requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar

insurers, or upon the agents or representatives of those insurers, of that other state or country

under the statutes of this state, as long as the laws of that other state or country continue in

force or are so applied, the same taxes, licenses, other fees, deposit requirements, or other

material obligations, prohibitions, or restrictions of any kind shall be imposed, collected, and

enforced by the State Tax Commission, with the assistance of the commissioner, upon the

insurers, or upon the agents or representatives of those insurers, of that other state or country

doing business or seeking to do business in this state.

(2) Any tax, license, or other obligation imposed by any city, county, or other political subdivision

or agency of another state or country on Utah insurers, their agents, or representatives is

considered as being imposed by that state or country within the meaning of this section.

(3) The commissioner may by rule waive the retaliatory requirements for a person that is:

(a) doing business in this state; or

(b) seeking to do business in this state.

Amended by Chapter 308, 2002 General Session

31A-3-402 Obligations to which retaliation inapplicable.

Section 31A-3-401 does not apply to personal income taxes, ad valorem taxes on real or

personal property, nor special purpose obligations or assessments in connection with particular

kinds of insurance, except that deductions from premium taxes or other taxes otherwise payable,

allowed on account of real estate or personal property taxes paid, are taken into consideration by

the commissioner in determining the propriety and extent of retaliatory action under this part.

Enacted by Chapter 242, 1985 General Session

31A-3-403 Domicile of alien insurers.

(1) The domicile of an insurer formed under the laws of Canada, or a province of Canada, is

considered to be that province in which its head office is situated.

(2) For the purposes of this part, the domicile of an alien insurer, other than insurers formed under

the laws of Canada or a province thereof, is the state where the insurer's principal place of

business is located in the United States, except that alien insurers may designate in a writing

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filed with the commissioner at time of admission to Utah or by January 1, 1987, whichever date

is later, any one of the following states as the alien insurer's state of domicile:

(a) the state where the insurer was first authorized to transact insurance;

(b) the state which is the insurer's principal place of business in the United States; or

policyholders and creditors in the United States is held.

Enacted by Chapter 242, 1985 General Session

Chapter 4

Insurers in General

31A-4-101 Solicitation permit.

(1) No person may advertise for or solicit or receive any funds, subscriptions for securities, or

membership fees, dues, or contributions in Utah or from any person present in Utah for the

purpose of forming or financing the formation or enlargement of an insurer, holding company

to form or acquire one or more insurers, or any corporation or unincorporated association to

do or facilitate the doing of an insurance business in Utah or elsewhere, unless the person

has obtained the appropriate organization or solicitation permit under Chapter 5, Domestic

Stock and Mutual Insurance Corporations, Chapter 6a, Service Contracts, Chapter 7, Nonprofit

Health Service Insurance Corporations, Chapter 8, Health Maintenance Organizations and

Limited Health Plans, or Chapter 9, Insurance Fraternals, and filed any required statement

under Chapter 16, Insurance Holding Companies.

(2) Any person obtaining the appropriate organization or solicitation permit under this code is

exempt from compliance with Title 61, Securities Division - Real Estate Division.

Amended by Chapter 340, 2011 General Session

31A-4-102 Qualified insurers.

(1) A person may not conduct an insurance business in Utah in person, through an agent, through

a broker, through the mail, or through another method of communication, except:

(a) an insurer:

(i) authorized to do business in Utah under:

(A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;

(B) Chapter 7, Nonprofit Health Service Insurance Corporations;

(D) Chapter 9, Insurance Fraternals;

(E) Chapter 10, Annuities;

(F) Chapter 11, Motor Clubs;

(G) Chapter 14, Foreign Insurers;

(H) Chapter 37, Captive Insurance Companies Act; or

(I) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and

(ii) within the limits of its certificate of authority;

(b) a joint underwriting group under Section 31A-2-214 or 31A-20-102;

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(d) a person who submits to the commissioner a certificate from the United States Department

of Labor, or such other evidence as satisfies the commissioner, that the laws of Utah are

preempted with respect to specified activities of that person by Section 514 of the Employee

Retirement Income Security Act of 1974 or other federal law; or

(e) a person exempt from this title under Section 31A-1-103 or another applicable statute.

(2) As used in this section, "insurer" includes a bail bond surety company, as defined in Section

31A-35-102.

Amended by Chapter 290, 2014 General Session

Amended by Chapter 300, 2014 General Session

31A-4-103 Certificate of authority.

(1) Each certificate of authority issued by the commissioner shall specify:

(a) the name of the insurer;

(b) the kinds of insurance the insurer is authorized to transact in Utah; and

(2) A certificate of authority issued under this chapter remains in force until:

(a) the certificate is not renewed; or

(b) under Subsection (3), the certificate of authority is:

(i) revoked; or

(ii) suspended.

(3)

(a) After an adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, if

the commissioner makes a finding described in Subsection (3)(b), the commissioner may:

(i) revoke a certificate of authority;

(ii) suspend a certificate of authority for a period not to exceed 12 months; or

(iii) limit a certificate of authority.

(b) The commissioner may take any action described in Subsection (3)(a) if the commissioner

finds the insurer has:

(i) failed to pay when due any fee due under Section 31A-3-103;

(ii) violated or failed to comply with:

(A) this title;

(B) a rule made under Subsection 31A-2-201(3); or

(iii) engaged in methods and practices in the conduct of business that endanger the legitimate

interests of customers and the public.

(i) the conditions and terms imposed on the insurer during the suspension; and

(ii) the conditions and procedures for reinstatement from suspension.

(d) The commissioner may place limitations on a certificate of authority at the time the certificate

of authority is issued based on information contained in the application for the certificate of

authority.

(e) An order limiting a certificate of authority that is issued under Subsection (3)(a) or (3)(d) shall

specify:

(i) the period of the limitation;

(ii) the conditions of the limitation; and

(iii) the procedures for removing the limitation.

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(4) Subject to the requirements of this section and in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act, the commissioner may by rule prescribe procedures to renew

or reinstate a certificate of authority.

(5) An insurer under this chapter whose certificate of authority is suspended or revoked, but that

continues to act as an authorized insurer, is subject to the penalties for acting as an insurer

without a certificate of authority.

(6) Any insurer holding a certificate of authority in this state shall immediately report to the

commissioner a suspension or revocation of that insurer's certificate of authority in any:

(a) state;

(b) the District of Columbia; or

(7)

(a) An order revoking a certificate of authority under Subsection (3) may specify a time within

which the former authorized insurer may not apply for a new certificate of authority, except

that the time may not exceed five years from the date on which the certificate of authority is

revoked.

(b) If no time is specified in an order revoking a certificate of authority under Subsection (3),

the former authorized insurer may not apply for a new certificate of authority for five years

from the date on which the certificate of authority is revoked without express approval by the

commissioner.

(8)

(a) Subject to Subsection (8)(b), the insurer shall pay all fees under Section 31A-3-103 that

would have been payable if the certificate of authority had not been suspended or revoked,

unless the commissioner, in accordance with rule, waives the payment of the fees by no later

than the day on which:

(i) a suspension under Subsection (3) of an insurer's certificate of authority ends; or

(ii) a new certificate of authority is issued to an insurer whose certificate of authority is revoked

under Subsection (3).

(b) If a new certificate of authority is issued more than three years after the day on which a

similar certificate of authority was revoked, this Subsection (8) applies only to the fees that

would have accrued during the three years immediately following the revocation.

Amended by Chapter 382, 2008 General Session

31A-4-104 Bar on local activity by persons not authorized.

A person not qualified under Section 31A-4-102 to do an insurance business may not, from

offices or by personnel or facilities located in Utah, solicit insurance applications or transact

insurance business in another jurisdiction.

Enacted by Chapter 242, 1985 General Session

31A-4-105 Deposit required from domestic insurers.

Domestic insurers organized or operating under Chapter 5, Domestic Stock and Mutual

Insurance Corporations, Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter

9, Insurance Fraternals, shall maintain a deposit under Section 31A-2-206 in the amount of the

insurer's required capital for stock insurers, or minimum permanent surplus for mutuals. The

commissioner may not issue a certificate of authority to an insurer operating under one of these

chapters until the insurer complies with this section.

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Amended by Chapter 20, 1995 General Session

31A-4-105.5 Deposit required from foreign insurers.

(1)

(a) Foreign insurers operating under Chapter 14, Foreign Insurers, shall maintain a deposit in

the amount of the insurer's minimum required capital for stock insurers, or minimum required

permanent surplus for mutual insurers.

(b) The deposit shall be held for the benefit of all policyholders and may be maintained with an

official of some other state designated by law to accept the deposit.

(2) The commissioner may not issue or renew a certificate of authority to an insurer until the

insurer complies with this section.

Enacted by Chapter 316, 1994 General Session

31A-4-106 Provision of health care.

(1) As used in this section, "health care provider" has the same definition as in Section 78B-3-403.

(2) Except under Subsection (3) or (4), unless authorized to do so or employed by someone

authorized to do so 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, Chapter 9, Insurance Fraternals, or Chapter 14,

Foreign Insurers, a person may not:

(a) directly or indirectly provide health care;

(b) arrange for health care;

(d) collect advance payments for health care; or

(e) compensate a provider of health care.

(3) Subsection (2) does not apply to:

(a) a natural person or professional corporation that alone or with others professionally

associated with the natural person or professional corporation, and except as provided in

Subsection (3)(e), without receiving consideration for services in advance of the need for a

particular service, provides the service personally with the aid of nonprofessional assistants;

(b) a health care facility as defined in Section 26B-2-201 that:

(i) is licensed or exempt from licensing under Title 26B, Chapter 2, Part 2, Health Care Facility

Licensing and Inspection; and

(ii) does not engage in health care insurance as defined under Section 31A-1-301;

Labor, or other evidence satisfactory to the commissioner, showing that the laws of Utah are

preempted under Section 514 of the Employee Retirement Income Security Act of 1974 or

other federal law;

(d) a person licensed under Chapter 23a, Insurance Marketing - Licensing Producers,

Consultants, and Reinsurance Intermediaries, who arranges for the insurance of all services

under:

(i) Subsection (2) by an insurer authorized to do business in Utah; or

(ii) Section 31A-15-103; or

(e) notwithstanding the provisions of Subsection (3)(a), a natural person or professional

corporation that alone or with others professionally associated with the natural person or

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professional corporation enters into a medical retainer agreement in accordance with Section

31A-4-106.5.

(4) A person may not provide administrative or management services for another person subject to

Subsection (2) and not exempt under Subsection (3) unless the person:

(a) is an authorized insurer 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, Chapter 9, Insurance Fraternals, or

Chapter 14, Foreign Insurers; or

(b) complies with Chapter 25, Third Party Administrators.

(5) An insurer or person who provides, administers, or manages health care insurance 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, Chapter 9, Insurance Fraternals, or Chapter 14, Foreign Insurers, may not enter

into a contract that limits a health care provider's ability to advise the health care provider's

patients or clients fully about treatment options or other issues that affect the health care of the

health care provider's patients or clients.

Amended by Chapter 327, 2023 General Session

31A-4-106.5 Medical retainer agreements.

(1) For purposes of this section:

(a) "Medical retainer agreement" means a written contract:

(i) between:

(A) except as provided in Subsection (1)(b)(iii)(B), a natural person or a professional

corporation, alone or with others professionally associated with the natural person or

professional corporation; and

(B) an individual patient or a patient's representative; and

(ii) in which:

(A) the person described in Subsection (1)(a)(i)(A) agrees to provide routine health care

services to the individual patient for an agreed upon fee and period of time; and

(B) either party to the contract may terminate the agreement upon written notice to the other

party.

(b) "Routine health care services" include:

(i) screening, assessment, diagnosis, and treatment for the purpose of promotion of health, and

detection and management of disease or injury;

(ii) supplies and prescription drugs that are dispensed in a health care provider's office; and

(iii) laboratory work, such as routine blood screening or routine pathology screening performed

by a laboratory that:

(A) is associated with the health care provider entering into the medical retainer agreement;

(B) if not associated with the health care provider, has entered into an agreement with the

health care provider to provide the laboratory work without charging a fee to the patient for

the laboratory work.

(2) A medical retainer agreement exempt from the provisions of Subsection 31A-4-106(2) shall:

(a) describe the specific routine health care services that are included in the contract;

(b) prominently state in writing that the retainer agreement is not health insurance; and

provided under the medical retainer agreement.

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Enacted by Chapter 50, 2012 General Session

31A-4-107 Other business.

(1) As used in this section, "business reasonably incidental to insurance business" includes:

(a) in the case of an insurer authorized to transact title insurance:

(i) preparing or selling abstracts of title and related documents; and

(ii) providing escrow services in connection with real estate transactions, or other services

incidental to the sale or transfer of insurance related to the sale or transfer of real property,

except the sale of other kinds of insurance related to the sale or transfer of real property;

and

(b) the business that could be done through subsidiaries authorized under Subsection

31A-5-218(3) or, in the case of a nondomestic insurer, through corporations that would be

authorized under Subsection 31A-5-218(3) if the insurer were a domestic insurer.

(2) No domestic insurer may engage, directly or indirectly, in any business other than insurance

and business reasonably incidental to its insurance business, except as specifically authorized

by Section 31A-5-218 or other law in this state.

(3) No nondomestic insurer may engage in this state in any business forbidden to a domestic

insurer, nor may the insurer engage in that type of business elsewhere if the commissioner

orders the nondomestic insurer to cease doing that type of business upon finding that doing

that business is not consistent with the interests of its insureds, creditors, or the public in this

state.

Amended by Chapter 308, 2002 General Session

31A-4-107.5 Penalty for failure of a regulated health insurance entity to fulfill duties related

to state claims for Medicaid payment or recovery.

(1) For purposes of this section, "regulated health insurance entity" means a health insurance

entity, as defined in Section 26B-3-1001, that is subject to regulation by the department.

(2) If a regulated health insurance entity fails to comply with the provisions of Section 26B-3-1004:

(a) the commissioner may revoke or suspend, in whole or in part, a license, certificate of

authority, registration, or other authority that is granted by the commissioner to the regulated

health insurance entity; and

(b) the regulated health insurance entity is subject to the penalties and procedures provided for in

Section 31A-2-308.

Amended by Chapter 327, 2023 General Session

31A-4-108 Power to hold property in other than own name.

(1) An insurer shall hold all investments and deposits of its funds in its own name except:

(a) securities:

(i) kept under a custodial agreement or trust arrangement with one of the following approved by

the commissioner:

(A) a bank;

(B) a securities firm's trust company;

(D) a brokerage firm; and

(ii) that may be issued in the name of a nominee of the:

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(A) bank;

(B) securities firm's trust company;

(D) brokerage firm; and

(b) securities that may be acquired and held in bearer form.

(2) An insurer shall take steps which the commissioner reasonably prescribes by rule or order to:

(a) safeguard the securities described in Subsection (1); and

(b) ensure that the securities are not loaned to other insurers, affiliated or not, to mislead the

commissioner about the true financial condition of either the lending or the borrowing insurer.

(3)

(a) If the department finds that an insurer is in violation of this section, the insurer is subject to:

(i) a fine;

(ii) suspension of a license;

(iii) revocation of a license;

(iv) another penalty permitted by Section 31A-2-308; or

(v) any combination of Subsections (3)(a)(i) through (iv).

(b) An insurer may not provide for the custody of the insurer's securities except as granted by this

section.

this section shall be disregarded in:

(i) determining the financial condition of the insurer; or

(ii) reporting the financial condition of the insurer.

Amended by Chapter 176, 2006 General Session

31A-4-109 Insurers as fundholders.

All of an insurer's assets shall be held, invested, and disbursed for the use and benefit of the

insurer. No policyholder, member, or beneficiary may have or acquire individual rights in these

assets or become entitled to an apportionment or the surrender of any part of these assets, except

as provided in this title or by contract. An insurer may create, maintain, invest, disburse, and apply

any special funds necessary to carry out any purpose permitted by the laws of this state and the

articles and bylaws of the insurer.

Amended by Chapter 204, 1986 General Session

31A-4-110 Duty of insurers to report abandoned property.

All insurers doing business in Utah shall report under Section 67-4a-401 any property presumed

abandoned under Title 67, Chapter 4a, Part 2, Presumption of Abandonment.

Amended by Chapter 371, 2017 General Session

31A-4-111 Authority to insure with certain insurers.

A person, government, governmental agency, state, political subdivision of the state, public or

private corporation, board, association, estate, trustee, or fiduciary may purchase nonassessable

policies of insurance issued by an insurer 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 14, Foreign Insurers, which is

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authorized to write that type of insurance under this code. These authorized insurers may issue

that type of insurance to any of the persons named above.

Amended by Chapter 20, 1995 General Session

31A-4-112 Political activities.

(1) Title 36, Chapter 11, Lobbyist Disclosure and Regulation Act, applies to the lobbying efforts of

every person subject to regulation under this title.

(2) Except insurers with excess surplus, an insurer doing business in Utah may not directly or

indirectly pay or use, or offer or agree to pay or use any money or thing of value:

(a) for or in aid of any political office;

(b) for the nomination for the political office; or

political office.

Amended by Chapter 9, 1996 Special Session 2

31A-4-113 Annual statements.

(1)

(a) Each authorized insurer shall annually, on or before March 1, file with the commissioner a

true statement of the authorized insurer's financial condition, transactions, and affairs as of

December 31 of the preceding year.

(b) The statement required by Subsection (1)(a) shall be:

(i) verified by the oaths of at least two of the insurer's principal officers; and

(ii) in the general form and provide the information as prescribed by the commissioner by rule.

required by Subsection (1)(a).

(2) The annual statement of an alien insurer shall:

(a) relate only to the alien insurer's transactions and affairs in the United States unless the

commissioner requires otherwise; and

(b) be verified by:

(i) the insurer's United States manager; or

(ii) the insurer's authorized officers.

Amended by Chapter 2, 2004 General Session

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 file with the NAIC a copy of the insurer's:

(i) annual statement convention blank on or before March 1;

(ii) market conduct annual statements on or before the applicable date determined by the NAIC;

and

(iii) any additional filings required by the commissioner for the preceding year.

(b)

(i) The information filed with the NAIC under Subsection (1)(a)(i) shall:

(A) be prepared in accordance with the NAIC's:

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(I) annual statement instructions; and

(II) Accounting Practices and Procedures Manual; and

(B) include:

(I) the signed jurat page; and

(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).

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 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) 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 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 NAIC.

Amended by Chapter 120, 2024 General Session

31A-4-114 Powers of a reciprocal insurer and interinsurance exchange.

(1) Every reciprocal insurer or interinsurance exchange may:

(a) purchase, receive, own, hold, and lease its property;

(b) mortgage, pledge, or encumber its property by deed of trust or otherwise; and

(i) making investments for the production of income; or

(ii) transacting its business in a convenient manner.

(2) The attorney-in-fact designated by the subscribers of the reciprocal or interinsurance

exchange shall execute any contract, which includes deeds, leases, mortgages, deeds of trust,

purchase or sale agreements, or any other contract, in the name of the reciprocal insurer or

interinsurance exchange.

Enacted by Chapter 327, 1990 General Session

31A-4-115 Plan of orderly withdrawal.

(1) As used in this section, a "line of insurance" means:

(a) a general line of authority;

(b) a general line of insurance;

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(d) the small employer group health benefit plan market when there is a discontinuance of all

small employer health benefit plans under Subsection 31A-22-618.6(5)(e);

(e) the large employer group health benefit market when there is a discontinuance of all large

employer health benefit plans under Subsection 31A-22-618.6(5)(e); or

(f) the individual health benefit plan market when there is a discontinuance of all individual health

benefit plans under Subsection 31A-22-618.7(3)(e).

(2) When an insurer intends to withdraw from writing a line of insurance in this state or to reduce

its total annual premium volume by 75% or more, the insurer shall file with the commissioner a

plan of orderly withdrawal.

(3) An insurer's plan of orderly withdrawal shall:

(a) indicate the date the insurer intends to:

(i) begin the withdrawal plan; and

(ii) complete the withdrawal plan; and

(b) include provisions for:

(i) meeting the insurer's contractual obligations;

(ii) providing services to the insurer's Utah policyholders and claimants;

(iii) meeting applicable statutory obligations; and

(iv) the payment of a withdrawal fee of $50,000 to the department if the insurer's line of

insurance is not assumed or placed with another insurer approved by the commissioner.

(4) The commissioner shall approve a plan of orderly withdrawal if the plan of orderly withdrawal

adequately demonstrates that the insurer will:

(a) protect the interests of the people of the state;

(b) meet the insurer's contractual obligations;

(d) meet applicable statutory obligations.

(5) Section 31A-2-302 governs the commissioner's approval or disapproval of a plan for orderly

withdrawal.

(6) The commissioner may require an insurer to increase the deposit maintained in accordance

with Section 31A-4-105 or Section 31A-4-105.5 and place the deposit in trust in the name of the

commissioner upon finding, after an adjudicative proceeding that:

(a) there is reasonable cause to conclude that the interests of the people of the state are best

served by such action; and

(b) the insurer:

(i) has filed a plan of orderly withdrawal; or

(ii) intends to:

(A) withdraw from writing a line of insurance in this state; or

(B) reduce the insurer's total annual premium volume by 75% or more.

(7) An insurer is subject to the civil penalties under Section 31A-2-308, if the insurer:

(a) withdraws from writing a line of insurance in this state without receiving the commissioner's

approval of a plan of orderly withdrawal; or

(b) reduces the insurer's total annual premium volume by 75% or more in any year without

receiving the commissioner's approval of a plan of orderly withdrawal.

(8) An insurer that withdraws from writing a line of insurance in this state may not resume writing

the line of insurance in this state for five years unless the commissioner finds that the

prohibition should be waived because the waiver is:

(a) in the public interest to promote competition; or

(b) to resolve inequity in the marketplace.

(9) The commissioner shall adopt rules necessary to implement this section.

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(10) This section does not apply to an insurer that places coverage with an affiliate of the insurer

with the same or similar coverage.

Amended by Chapter 198, 2022 General Session

31A-4-116 Adverse benefit determination procedures.

(1) If an insurer has established a complaint resolution body or grievance appeal board, the body

or board shall include at least one consumer representative.

(2) Adverse benefit determination procedures for health insurance policies and health maintenance

organization contracts shall be established in accordance Sections 31A-22-629 and

31A-22-650.

Amended by Chapter 439, 2019 General Session

31A-4-117 Closing or settlement protection.

(1) A title insurer may issue closing or settlement protection in the form of a closing protection letter

filed with the department to a person who is a party to a transaction in which a title insurance

policy is issued.

(2) Closing or settlement protection may indemnify a person who is a party to a transaction referred

to in Subsection (1) against loss that the title insurer approves for the closing or settlement

protection, under the terms and conditions of the closing protection letter issued by the title

insurer, because of one or more of the following acts of a title insurance policy issuing individual

title insurance producer or agency title insurance producer or other settlement service provider:

(a) theft or misappropriation of settlement funds in connection with a transaction in which one or

more title insurance policies are issued by or on behalf of the title insurer issuing the closing

or settlement protection, but only to the extent that the theft or misappropriation relates to the

status of the title to that interest in land or to the validity, enforceability, and priority of the lien

of the mortgage on that interest in land; or

(b) failure to comply with the written closing instructions when agreed to by the settlement agent,

title agent, or employee of the title insurer, but only to the extent that the failure to follow

the written closing instructions relates to the status of the title to that interest in land or the

validity, enforceability, and priority of the lien of the mortgage on that interest in land.

(3) A title insurer may not make the fee charged by a title insurer for each party receiving closing

or settlement protection coverage subject to any agreement requiring a division of fees or

premiums collected on behalf of the title insurer. The fee charged for a closing or settlement

coverage protection letter will be filed by the title insurer with the department 30 days before

use.

(4) A title insurer may not provide any other protection that purports to contractually indemnify

against improper acts or omissions of a person who is a party to a transaction referred to in

Subsection (1) with regard to settlement or closing services.

(5) Subject to Section 31A-23a-407, a title insurer that is represented by an individual title

insurance producer or an agency title insurance producer is liable for the acts or omissions

of the individual title insurance producer or agency title insurance producer for closing or

settlement only to the extent of the liability undertaken in the closing protection letter according

to terms and provisions in the closing protection letter issued pursuant to this section. The

liability to the title insurer, if any, of the individual title insurance producer or agency title

insurance producer that issues the title insurance policy for acts or omissions of the individual

title insurance producer or agency title insurance producer may not be limited or modified

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because the title insurer has provided closing protection to one or more parties to a real

property transaction, escrow, settlement, or closing.

Amended by Chapter 314, 2016 General Session

Chapter 5

Domestic Stock and Mutual Insurance Corporations

Part 1

General Provisions

31A-5-101 Definitions.

In this chapter, unless the context requires otherwise:

(1) The definitions of the following terms applicable to the Utah Revised Business Corporation Act

in Section 16-10a-102 apply to stock corporations:

(a) "affiliate";

(b) "mail"; and

(2) The definitions to the following terms applicable to nonprofit corporations in Section 16-6a-102

apply to mutuals:

(a) "articles of incorporation";

(b) "bylaws"; and

(3) "Promoter securities" are securities issued by a stock insurer to the incorporators, directors,

officers, or their families or nominees at any time prior to, and up to one year following, the

issuance of a certificate of authority to the stock insurer.

Amended by Chapter 386, 2009 General Session

31A-5-102 Scope and purposes.

(1)

(a) Except as expressly provided otherwise in this title, this chapter applies to all corporations

organized under Utah law and doing an insurance business as defined under Section

31A-1-301, except those expressly governed by other chapters of this title. This chapter

applies to corporations doing a reinsurance business, whether or not they do other insurance

business.

(b) Except as expressly provided otherwise, this chapter does not apply to nondomestic insurers.

Corporation Act, and Title 16, Chapter 10a, Utah Revised Business Corporation Act, apply to

corporations under this chapter.

(d) If Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, or Title 16, Chapter 10a, Utah

Revised Business Corporation Act, conflict with this title, this title governs.

(2) The purposes of this chapter include:

(a) to provide a procedure for the formation of insurance corporations;

(b) to assure the solidity of insurance corporations by providing an organizational framework to

facilitate sound management, sound operation, and sound regulation;

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(d) where feasible, to strengthen internal corporate democracy through enhancing shareholder

and policyholder participation.

Amended by Chapter 300, 2000 General Session

31A-5-103 Orders imposing and relaxing restrictions.

(1) The commissioner may by order subject an individual corporation not otherwise subject to

some or all of the restrictions of Subsections 31A-5-304(4), 31A-5-305(1)(a), 31A-5-305(2)(a)(i)

and (ii), and 31A-5-410(1)(b) if he finds after a hearing that the individual corporation's financial

condition, management, and other circumstances require additional regulation for the protection

of the interests of insureds or the public. The commissioner shall detail in writing the grounds

for his order.

(2) The commissioner may by order free a new corporation from any or all of the restrictions

generally applicable to new corporations under the provisions listed in Subsection (1), if he is

satisfied that the corporation's financial condition, management, and other circumstances give

assurance that the interests of insureds and the public will not be endangered by doing so.

Amended by Chapter 1, 2000 General Session

31A-5-104 General corporate powers and procedures.

(1)

(a) Subject to other provisions of this code, Section 16-10a-302 applies to stock and mutual

insurance corporations.

(b) Subject to other specific provisions of this title, a domestic insurance corporation may

participate in any activity permitted as a promoter, partner, member, associate, or manager of

any partnership, joint venture, trust, or other enterprise.

(2) Subsections 16-10a-303(2)(a) and (b) apply to stock corporations, and Section 16-10a-622

applies to mutuals.

(3) Whenever a seal is required on a corporate document, writing or printing the word "Seal"

constitutes a valid seal.

(4) In waiving notice and in informal actions by shareholders, members, or directors, Sections

16-10a-704, 16-10a-706, and 16-10a-823 apply to stock corporations, and Sections 16-6a-705

and 16-6a-707 apply to mutuals.

(5) A life insurance corporation may hold assets under Section 31A-22-410 as general corporate

assets or as trustee.

Amended by Chapter 300, 2000 General Session

31A-5-105 Documents as evidence.

A certificate issued by the commissioner under a provision of this chapter is prima facie

evidence of the facts stated in the certificate.

Enacted by Chapter 242, 1985 General Session

31A-5-106 Unauthorized assumption of corporate power.

All persons who presume to act as a corporation under this chapter without authority to do so

are jointly and severally liable for all debts and liabilities incurred or arising as a result.

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Enacted by Chapter 242, 1985 General Session

31A-5-108 Transition provision for former mutual benefit associations, cooperative

associations, county mutuals, and reciprocal insurers.

(1) Except as otherwise provided in this code, a domestic stock or mutual insurance corporation,

including an incorporated mutual benefit association, a county mutual, a reciprocal insurer, or

an incorporated cooperative association, holding a valid certificate of authority on July 1, 1986,

continues to be authorized within the limits of its certificate of authority. Incorporated mutual

benefit associations, county mutuals, reciprocal insurers, and cooperative associations become

Chapter 5, Domestic Stock and Mutual Insurance Corporations, mutuals by operation of law on

July 1, 1986.

(2) If timely adjustment to the requirements of Chapter 5, Domestic Stock and Mutual Insurance

Corporations, would cause an existing stock or mutual insurance corporation hardship,

disproportionate expense, or serious inconvenience, the commissioner may, upon the

corporation's request, grant an extension for compliance with specified requirements, if the

interests of insureds and the public are not endangered. The extension may not be beyond

July 1, 1988.

Enacted by Chapter 242, 1985 General Session

31A-5-109 Compliance extension.

If timely adjustment to a particular requirement applicable to a Chapter 5, Domestic Stock and

Mutual Insurance Corporations, mutual would cause a former county mutual, reciprocal insurer,

cooperative association, or mutual benefit association hardship, disproportionate expense, or

serious inconvenience, the commissioner may, upon the insurer's request, grant an extension for

compliance if the interests of insureds and the public are not endangered. This extension may

not be beyond July 1, 1988. The requirement of payment of taxes and fees is not considered a

hardship or a disproportionate expense.

Enacted by Chapter 242, 1985 General Session

Part 2

Organization of Corporations

31A-5-201 Reservation and registration of corporate name.

The reservation, registration, and renewal of the corporate name of stock corporations and

mutuals is governed by Sections 16-10a-402, 16-10a-403, and 31A-1-109. The reservation and

registration fees provided in Section 31A-3-103 apply.

Amended by Chapter 344, 1995 General Session

31A-5-202 Incorporators.

(1) One or more adult natural persons may organize and act as incorporators of a corporation

under Section 31A-5-204.

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(2) One to 15 adult natural persons may organize and act as incorporators of a corporation under

the accelerated organization procedure of Section 31A-5-213.

(3) This section does not apply to stock and mutual insurance corporations already in existence on

July 1, 1986.

Amended by Chapter 71, 2002 General Session

31A-5-203 Articles and bylaws.

(1) The articles of incorporation requirements in Section 16-10a-202 apply to the articles of a stock

corporation, except that:

(a) the name of the corporation shall comply with Sections 16-10a-401 and 31A-1-109 and the

name of any new or renamed corporation shall include the word "insurance" or a term of

equivalent meaning;

(b) authorized shares shall conform to Subsection 31A-5-305(1) and the capital provided for shall

conform to Section 31A-5-211; and

Section 31A-4-107.

(2) The articles of incorporation requirements in Section 16-6a-202, except Subsections

16-6a-202(1)(f) and (g), apply to the articles of a mutual except that:

(a) The name of the corporation shall comply with Sections 16-6a-401 and 31A-1-109 and the

name of any new or renamed corporation shall include the words "mutual" and "insurance" or

terms of equivalent meaning.

(b) If any mutual bonds are authorized, they shall comply with Subsection 31A-5-305(2)(a).

be limited to those purposes permitted by Section 31A-4-107.

(d) If assessable policies are permitted, the articles shall contain provisions giving assessment

liabilities and procedures, including a provision specifying the classes of business on which

assessment may be separately levied.

(e) The articles may specify those classes of persons who may be policyholders, or prescribe

the procedure for establishing or removing restrictions on the classes of persons who may

be policyholders. The articles shall also state that each policyholder is a member of the

corporation.

(3) Sections 16-10a-830 and 16-10a-831 apply to stock corporations and Section 16-6a-818

applies to mutuals. The articles or bylaws shall designate three or more principal offices the

principal officers of the corporation shall hold. The principal offices shall be held by at least

three separate natural persons.

(4) The bylaws of a domestic corporation shall comply with this chapter. A copy of the bylaws,

and any amendments to them, shall be filed with the commissioner within 60 days after their

adoption. Subject to this Subsection (4), Subsections 31A-5-204(2)(c) and (5), Subsection

31A-5-213(4), and Section 16-10a-206 apply to stock corporations and Section 16-6a-206

applies to mutuals.

Amended by Chapter 364, 2008 General Session

31A-5-204 Organization permit -- Certificate of incorporation.

(1) Subject to Section 31A-5-213, a person, including a stock insurance corporation, insurance

holding company, stock corporation to finance an insurer or insurance production for an

insurer, corporation to provide management or administrative services for any of the entities

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named above, or mutual insurer, may not solicit subscriptions for its securities, or in the case

of a mutual insurance corporation, solicit applications for qualifying insurance policies or

subscriptions for mutual bonds or contribution notes, until the commissioner has issued an

organization permit.

(2) The application for an organization permit shall give the name of the insurer to be formed and

shall be signed and acknowledged by or on behalf of each incorporator. The application shall

include or have attached:

(a) the names, and for the preceding 10 years all addresses, and all occupations of the

incorporators and the proposed directors and officers;

(b) for all persons planned by the incorporators to own 10% or more of the capital stock of the

corporation, their annual financial statements and reports for the three most recent years,

and if the planned shareholders are corporations, their articles and bylaws, and a list of the

names, addresses, and occupations of all their directors and principal officers;

incorporator, and the proposed bylaws;

(d) all agreements relating to the corporation to which any incorporator, proposed director, or

officer is a party;

(e) the amount and sources of the funds available for organization expenses and the proposed

arrangements for reimbursement and compensation of incorporators or other persons;

(f) the plan for solicitation of applications for qualifying insurance policies and for the corporation's

securities;

(g) the forms to be used for stock subscriptions, certificates for shares, applications for qualifying

insurance policies, subscriptions for mutual bonds and contribution notes, and the forms for

bonds and notes;

(h) the capital and initial paid in surplus in the case of a stock insurer, or the minimum permanent

surplus and the additional surplus in the case of a mutual insurer;

(i) the plan for conducting the insurance business, including:

(i) the geographical area in which business is intended to be done in the first two years;

(ii) the types of insurance intended to be written in the first two years;

(iii) the proposed marketing methods;

(iv) when requested by the commissioner, the proposed method for establishing premium rates;

and

(v) the proposed aggregate compensation of the five highest compensated officers, directors,

and employees;

(j) a projection certified by a member of the American Academy of Actuaries of the anticipated

operating results of the corporation at the end of each of the first two years of operation,

based on reasonable assumptions of loss experience, premium and other income, operating

expenses, and acquisition costs; and

(k) any other relevant document or information the commissioner reasonably requires.

(3) The commissioner shall issue an organization permit if:

(a) all the requirements of law have been met, including the payment of fees;

(b) all the incorporators, persons listed in Subsection (2)(b), and the proposed directors and

officers of the corporation being formed, are trustworthy and collectively have the competence

and experience to engage in the particular insurance business proposed;

the public; and

(d) the bond required by Section 31A-5-205 is filed.

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(4) If the commissioner denies the application for a permit, the commissioner shall state the

reasons for the denial.

(5)

(a) The organization permit shall:

(i) specify the minimum capital or minimum permanent surplus required under Section

31A-5-211; and

(ii) describe the securities or policies to be solicited under the permit.

(b) The organization permit may contain any other information the commissioner considers

necessary.

(6) The director of the Division of Corporations and Commercial Code shall accept the filing of the

corporation's articles of incorporation upon notice from the insurance commissioner that all the

applicable requirements of law have been met, including the payment of fees.

(7)

(a) When the director of the Division of Corporations and Commercial Code accepts the articles

of incorporation:

(i) the legal existence of the corporation begins;

(ii) the articles and bylaws become effective; and

(iii) the proposed directors and officers take office.

(b) The certificate is conclusive evidence of compliance with this section, except in a proceeding

by the state against the corporation.

(8) Notwithstanding Title 63G, Chapter 2, Government Records Access and Management Act, the

permit applicant may request that any part of the information supplied under Subsection (2)

be kept confidential. The information shall then be kept confidential unless the commissioner

expressly finds, after a hearing, that the interest of the corporation or the public requires that

the information be open to the public.

Amended by Chapter 382, 2008 General Session

31A-5-205 Bond.

(1) No organization permit may be issued until the commissioner receives from the applicants

a bond of an authorized corporate surety, or a deposit of cash or approved securities under

Section 31A-2-206. This bond or deposit shall be in an amount the commissioner determines

is sufficient, but in no event may it be less than $20,000, nor more than $100,000. The

bond or deposit shall be in favor of the state of Utah and of any subscribers and creditors of

the applicant, for the payment of costs incurred by the state by reason of dissolution of the

corporation before the issuance of a certificate of authority and for the payment of other debts

incurred in the organizational period. The bond shall be discharged or the deposit returned

upon issuance of the certificate of authority under Section 31A-5-212.

(2) This section does not apply to stock or mutual insurance corporations already in existence on

July 1, 1986.

Enacted by Chapter 242, 1985 General Session

31A-5-206 Sale of securities by authorized insurer.

A domestic insurer that has already received a certificate of authority may issue additional

securities to obtain further financing, after obtaining a solicitation permit from the commissioner.

The organizational permit requirements in Section 31A-5-204 apply if the commissioner prescribes

its application. The phrase "organization permit" in Section 31A-5-204 means "solicitation permit"

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when being applied to this section. The solicitation permit terminates one year from the date of

its issuance. However, this permit may be extended for not more than one additional year by the

commissioner on terms he considers sufficient to protect the policyholders, the shareholders, and

the public.

Amended by Chapter 95, 1987 General Session

31A-5-207 Powers under organization permit.

(1) While its organization permit is in effect a stock corporation may:

(a) register stock under Section 31A-5-302, solicit subscriptions subject to Section 16-10a-620,

accept payment for the subscriptions in cash or, with the approval of the commissioner, in

other property constituting a permitted investment under Chapter 18, Investments, and issue

receipts for payments made at values approved by the commissioner, but no certificates for

shares may be issued until a certificate of authority has been issued; and

(b) transact all other business necessary and appropriate in the organization of the planned

insurance enterprise.

(2) While its organization permit is in effect a mutual may:

(a) register mutual bonds under Section 31A-5-302, solicit applications for qualifying insurance

policies under Subsection 31A-5-211(5), solicit subscriptions for mutual bonds and

contribution notes and accept payment for the subscriptions in cash or, with the approval

of the commissioner, in property constituting a permitted investment under Chapter 18,

Investments, and issue receipts for payments made at values approved by the commissioner,

but no policies or bonds are effective or may be issued until a certificate of authority has been

issued; and

(b) transact all other business necessary and appropriate in the organization of the planned

insurance enterprise.

(3)

(a) The existence of the organization permit may not be used as an inducement in any

solicitation.

(b) No person may knowingly, with intent to deceive, exhibit any false document or

account regarding the affairs of any organization under Section 31A-5-204 or make any

misrepresentation about its affairs.

(4) Solicitations under this section may be made for stock or bond subscriptions only by persons

registered under Title 61, Chapter 1, Utah Uniform Securities Act, as broker-dealers or agents.

Solicitations under this section may be made for qualifying insurance policies only by persons

licensed under Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and

Reinsurance Intermediaries, as insurance producers. Before any solicitation, the solicitor shall

obtain from the commissioner a license to solicit, after paying the fee applicable under Section

31A-3-103.

(5) This section does not apply to stock or mutual insurance corporations already in existence on

July 1, 1986.

Amended by Chapter 298, 2003 General Session

31A-5-208 Deposit of proceeds of subscriptions.

(1) All funds, and the securities and documents representing interests in property, received by a

stock corporation for stock subscriptions or by a mutual for applications for insurance policies

or for mutual bond or contribution note subscriptions, shall be deposited in the name of the

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corporation with a custodian financial institution qualified under Subsection 31A-2-206(1).

This deposit is subject to an escrow agreement approved by the commissioner under which

withdrawals may be made only in accordance with conditions specified in the agreement,

and with the commissioner's approval. Securities may be held as authorized in Subsection

31A-2-206(2) and are required to be approved by the commissioner.

(2) This section does not apply to stock or mutual insurance corporations already in existence on

July 1, 1986.

Amended by Chapter 297, 2011 General Session

31A-5-209 Termination and revocation of organization permit and payment of organization

expenses.

(1) The organization permit terminates upon:

(a) issuance of a certificate of authority under Section 31A-5-212;

(b) revocation of the organization permit under Subsection (2); or

(i) filing with the commissioner a good-faith application for a certificate of authority tolls the

running of the expiration period for 30 days or until the commissioner rejects the application,

whichever is earlier; and

(ii) on application before expiration of the year the commissioner may grant a reasonable

extension if he states that he expects the corporation to be able to satisfy the requirements

for a certificate of authority within the extended period.

(2) The commissioner may revoke an organization permit if:

(a) he finds, after a hearing, that because of changes in circumstances, or because the facts are

not as represented in the application, the conditions for issuance of a permit are not satisfied;

(b) he denies an application for a certificate of authority and finds that the corporation cannot

reasonably be expected to satisfy the requirements for a certificate of authority within the

remaining term of the organization permit or extension allowable under Subsection (1)(c).

(3)

(a) Except in cases under Subsections (3)(b) and (3)(c), if the organization permit is revoked

or expires before a certificate of authority is granted, after payment of the expenses of

the state and payments to creditors under Section 31A-5-205, incorporators who have

advanced money for the reasonable and authorized expenses of organization, including

underwriting expenses, may be reimbursed in cash from the proceeds of share, mutual bond,

or contribution note subscriptions under the organization permit, on itemized receipts audited

by the commissioner. The total reimbursement may not exceed 5% of the amount received

from subscribers. The remainder in the escrow account shall then be distributed among the

subscribers in proportion to their contributions, valued as of the time the contributions were

made. The bond under Section 31A-5-205 shall be discharged or the deposits under Section

31A-5-205 shall be released to the extent they are not needed for other purposes.

(b) Reimbursement may be refused to any incorporator under Subsection (3), if the

commissioner finds that in connection with the organization of the corporation, the

incorporator has wilfully or negligently violated in a material way any provision of this chapter.

mutual until all advance premiums collected under Subsection 31A-5-211(5) have been

repaid in full.

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(4) The legal existence of the corporation terminates upon completion of the payments under

Subsection (3).

(5) This section does not apply to stock or mutual insurance corporations already in existence on

July 1, 1986.

Enacted by Chapter 242, 1985 General Session

31A-5-210 Incorporators' liability and organization expenses.

(1) The incorporators are jointly and severally liable for all organizational and promotional

expenses and obligations incurred prior to the issuance of the certificate of authority. Upon

issuance of the certificate, the insurer may pay those outstanding expenses and obligations

lawfully incurred.

(2)

(a)

(i) After issuance of the certificate of authority, incorporators of a stock corporation who have

advanced money or incurred obligations for the reasonable and authorized expenses of

organization, including underwriting of securities, may be reimbursed in cash from the

proceeds of shares subscribed to under the organization permit, or in shares at the public

offering price, on itemized receipts audited by the commissioner.

(ii) Promotional securities in connection with the financing of a stock corporation which is in the

promotional, exploratory, or developmental stage may be issued in an amount and for a

consideration which is not unreasonable. In this regard, the commissioner may adopt rules

setting forth standards with respect to promotional securities allowed to be issued and the

considerations to be received for them. The reimbursement for expenses under Subsection

(2)(a)(i) has priority over the issuance of promotional securities under Subsection (2)(a)(ii).

(iii) In no event may securities issued under Subsection (2)(a)(i) or promotional securities

issued under Subsection (2)(a)(ii) be issued in a manner which would, in the aggregate,

cause the dilution in the net tangible asset value of the insurer's securities proposed to be

issued to the public to exceed 25%.

(b) After issuance of the certificate of authority, incorporators of a mutual who have advanced

money or incurred obligations for the reasonable and authorized expenses of organization

may be reimbursed in cash from the proceeds of subscriptions for mutual bonds

and contribution notes, on itemized receipts audited by the commissioner. The total

reimbursement may not exceed 15% of the amount received for the bonds and notes.

(3) This section does not apply to stock or mutual insurance corporations already in existence on

July 1, 1986.

Enacted by Chapter 242, 1985 General Session

31A-5-211 Minimum capital or permanent surplus requirements.

(1)

(a) Except as provided in Subsections (4) and (5), insurers being organized or operating under

this chapter shall maintain minimum capital or permanent surplus for a mutual, in amounts

specified in Subsection (2).

(b) The certificate of authority issued under Section 31A-5-212 does not permit an insurer to

transact types of insurance for which the insurer does not have the required minimum capital

or permanent surplus for a mutual, in at least the amounts specified under Subsection (2).

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types of insurance transacted by the insurer in any and all areas which it operates, whether or

not only a portion of those types of insurance is or is to be transacted in this state.

(2) The minimum capital, or permanent surplus for a nonassessable mutual, is as follows for the

indicated types of insurance:

(a) life, annuity, accident and health, or any combination of these.......................$400,000

(b) subject to an aggregate maximum of $1,000,000 for more than one of the following types of

coverages:

(i) property insurance...........................................................................................200,000

(ii) surety insurance..............................................................................................300,000

(iii) bail bonds insurance only...............................................................................100,000

(iv) marine and transportation insurance...............................................................200,000

(v) vehicle liability insurance, residential dwelling liability insurance, or both........400,000

(vi) liability insurance...........................................................................................600,000

(vii) workers' compensation insurance..................................................................300,000

(c) title insurance.................................................................................................200,000

(d) professional liability insurance, excluding medical malpractice........................700,000

(e) professional liability, including medical malpractice.....................................1,000,000

(f) all types of insurance, except life, annuity, or title.........................................2,000,000

(3) Prior to beginning operations, an insurer licensed under this chapter shall have total adjusted

capital in excess of the company action level RBC as defined in Subsection 31A-17-601(8)(b).

(4)

(a) Subject to Subsections (4)(b) and (4)(c), an insurer holding a valid certificate of authority to

transact insurance in this state prior to July 1, 1986, continues to be authorized to transact the

same kinds of insurance as permitted by that certificate of authority, if the insurer maintains

not less than the amount of minimum capital or permanent surplus required for that authority

under the laws of this state in force immediately prior to July 1, 1986.

(b) If, after July 1, 1986, an insurer ever has minimum capital or permanent surplus that meets or

exceeds the requirements of Subsections (2) and (3), then Subsection (4)(a) is inapplicable to

that insurer and it shall comply with Subsections (2) and (3).

application of Subsection (4)(a) shall comply with Subsections (2) and (3) by July 1, 1990.

(d) Beginning July 1, 1987, former county mutuals shall comply with the capital and surplus

requirements of this section.

(5)

(a)

(i) An assessable mutual may be organized under this chapter, but it may not issue life

insurance or annuities.

(ii) An assessable mutual need not have a permanent surplus if the assessment liability of its

policyholders is unlimited and all insurance policies clearly state that.

(iii) If assessments are limited to a specified amount or a specified multiple of annual advance

premiums, the minimum permanent surplus is the amount that would be required under

Subsections (2) and (3) if the corporation were not assessable, reduced by an amount

that reasonably reflects the value of the policyholders' assessment liability in satisfying the

financial needs of the corporation.

(iv) The liability of members in an assessable mutual is joint and several up to the limits

provided by:

(A) the articles of incorporation of the assessable mutual; or

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(B) this title.

(b)

(i) Except as provided in Subsections (5)(c) and (d), a certificate of authority may not be issued

to an assessable mutual until it has at least 400 bona fide applications for insurance from

not less than 400 separate applicants, on separate risks located in this state, in each of

the classes of business upon which assessments may be separately levied. A full year's

premium shall be paid with each application and the aggregate premium is at least $50,000

for each class.

(ii) If at any time while the corporation is an assessable mutual, the business plan is amended

to include an additional class of business on which assessments may be separately levied,

identical requirements of Subsection (5)(b)(i) are applicable to each additional class.

workers' compensation insurance if, instead of the requirements of Subsection (5)(b),

policies are simultaneously put into effect that cover at least 1,500 employees, with no single

employer having more than 1/5 of the employees insured by the assessable mutual. A full

year's premium shall be paid by each employer, aggregating at least $200,000.

(d)

(i) The number and amount of required initial applications and premium payments may be

reduced by substituting surplus for the applications or premium payments.

(ii) The commissioner shall determine the reduction in required initial applications and premium

payments that is appropriate for a given amount of surplus.

(iii) The insurer shall continue to be assessable until conversion under Subsection 31A-5-507(1)

to a nonassessable mutual.

(6)

(a) The capital or permanent surplus requirements of Subsection (2) apply to persons seeking

certificates of authority under this chapter to write reinsurance.

(b) This Subsection (6) may not be construed as requiring reinsurers to obtain a certificate of

authority.

reinsurance ceded to a reinsurer without a certificate of authority.

Amended by Chapter 123, 2005 General Session

31A-5-212 Certificate of authority.

(1) The corporation may apply for a certificate of authority at any time prior to the expiration of its

organization permit. The application shall include a detailed statement by a principal officer

about any material changes that have taken place or are likely to take place in the facts on

which the issuance of the organization permit was based, and if any material changes are

proposed in the business plan, the information about the changes that would be required if an

organization permit were being applied for.

(2)

(a) The commissioner shall issue a certificate of authority if the commissioner finds:

(i) enough cash or property authorized under Subsection 31A-5-207(1)(a) or (2)(a) has been

received to satisfy the requirements of Section 31A-5-211;

(ii) there is no basis for revoking the organization permit under Subsection 31A-5-209(2); and

(iii) all other applicable requirements of the law have been met.

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(b) The certificate of authority shall specify any limits placed on the insurance business the

corporation may carry on and may, within the powers given the commissioner under this title,

specify limits on the corporation's methods of operation.

(3) After the issuance of the certificate of authority the following action shall take place:

(a) The board shall authorize and direct the issuance of certificates for shares, bonds, or notes

subscribed to under the organization permit, and of insurance policies upon qualifying

applications obtained under the organization permit.

(b) The commissioner shall authorize the release to the corporation of all funds held in escrow

under Section 31A-5-208.

(4)

(a) A corporation may apply to the commissioner for a new or amended certificate of authority

altering limits on its business or methods of operation. The application shall contain or be

accompanied by information in Subsection 31A-5-204(2) as the commissioner reasonably

requires. The commissioner shall issue the new certificate if the commissioner finds:

(i) the corporation's capital and surplus satisfy the requirements of Section 31A-5-211 as to the

operations proposed under the new certificate of authority; and

(ii) the proposed business would not be contrary to law or to the interests of insureds or the

public.

(b) If the commissioner issues an order under Chapter 27, Part 5, Administrative Actions, against

a corporation, the commissioner may also revoke the corporation's certificate and issue a new

one with any limitation the commissioner considers necessary.

(5) Except as to Subsection (4), this section does not apply to stock or mutual insurance

corporations already in existence on July 1, 1986.

Amended by Chapter 309, 2007 General Session

31A-5-213 Accelerated organization procedure.

(1) The incorporators may apply for a certificate of authority without first obtaining an organization

permit if:

(a) their number is not more than 15;

(b) no compensation is paid directly or indirectly for soliciting any of them;

stock corporation, or in the case of a mutual, they supply all the minimum permanent surplus

and initial expendable surplus by contribution notes or otherwise; and

(d) the shares are promotional securities and are subject to Subsection 31A-5-304(3) and (4).

(2) The application for a certificate of authority shall include:

(a) proof that the purchase price for the shares or the proceeds of contribution notes have been

deposited on behalf of the proposed corporation;

(b) a statement concerning whether and what property other than money is held in trust for the

proposed corporation; and

(3) The commissioner shall issue a certificate of authority if he finds that:

(a) all requirements of law have been met;

(b) all natural persons who are incorporators, the directors and principal officers of corporate

incorporators, and the proposed directors and officers of the corporation being formed are

trustworthy and collectively have the competence and experience to engage in the particular

insurance business proposed; and

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the public.

(4) The director of the Division of Corporations and Commercial Code shall issue a certificate of

incorporation upon notice from the insurance commissioner that all the applicable requirements

of law have been met, including the payment of fees.

(5) When the certificate of incorporation is issued, the corporation's legal existence begins, the

articles and bylaws become effective, and the proposed directors and officers take office. The

certificate is conclusive evidence of compliance with this section, except in a proceeding by the

state against the corporation.

(6) This section does not apply to stock or mutual insurance corporations already in existence on

July 1, 1986.

Amended by Chapter 95, 1987 General Session

31A-5-216 Change of domicile.

(1) A foreign insurance corporation may become a Utah insurance corporation if it submits an

application which evidences that the corporation complies with all of the requirements imposed

on domestic Utah corporations. The commissioner may, by order after a hearing, relax the

requirements of this chapter applicable to corporations in the process of organization that,

because of the developed status of the insurer, he finds unnecessary to protect policyholders

and the public. The commissioner shall simultaneously issue a certificate of organization under

Subsection 31A-5-204(3) and a certificate of authority under Subsection 31A-5-212(2) when the

conditions for both have been satisfied.

(2) Upon approval by the commissioner, a domestic insurer may transfer its domicile to any other

state in which it is admitted. The commissioner shall approve the transfer of domicile unless

he finds that the transfer will prejudice the interests of policyholders, creditors, or the public

in Utah. The commissioner may require a special deposit, reinsurance, or other protective

measures as an alternative to rejecting the insurer's application to move. After or simultaneous

with the removal of the corporation, it may seek entry into this state as a foreign corporation

under Chapter 14, Foreign Insurers.

(3) The transfer of domicile of an insurance corporation under either Subsection (1) or Subsection

(2) does not affect the obligations of the corporation under its existing insurance contracts or

any other existing contracts.

Enacted by Chapter 242, 1985 General Session

31A-5-217 Separate accounts for variable contracts.

(1) Separate accounts under this section may be designated by any appropriate name the

corporation wishes to use, except that the commissioner may by rule provide guidelines for the

naming of separate accounts.

(2) With the approval of the commissioner, any corporation may establish, or at the direction of

the commissioner shall establish, one or more separate accounts and allocate to them any

amounts paid or remitted to, or held by, the corporation under designated contracts or classes

of contracts. These amounts are to be applied to provide benefits payable partly or wholly in

variable dollar amounts, and to provide benefits in fixed and guaranteed dollar amounts and

other incidental benefits.

(3) To the extent necessary to comply with the federal Investment Company Act of 1940, 15 U.S.C.

Sec. 80a-1 et seq., or its interpretive rules, the corporation may:

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(a) adopt special procedures for the conduct of the business and affairs of a separate account;

and

(b) for persons having beneficial interests in a separate account, provide special voting and

other rights, including special rights and procedures relating to investment policy, investment

advisory services, selection of certified public accountants, and selection of a committee,

the members of which need not be otherwise affiliated with the corporation, to manage the

business and affairs of the account.

(4) The commissioner may specify in the certificate of authority of a newly organized corporation

the minimum required capital or the minimum required permanent surplus to be provided for

each separate account. If a separate account is established after a certificate of authority has

been issued, the commissioner shall require the corporation to allocate an adequate amount of

capital and surplus to the separate account. An insurer may not be required to allocate more

capital and surplus to a separate account than would be required of a separate insurer under

Section 31A-5-211 and Chapter 17, Part 6, Risk-Based Capital.

(5) The income and assets attributable to a separate account shall always remain identified with

the particular account, but unless the commissioner so orders, the assets need not be kept

physically separate from other assets of the corporation. The income and gains and losses,

whether or not realized, from assets attributable to a separate account shall be credited to or

charged against the account without regard to other income, gains, or losses of the corporation.

(6) Except as provided in Subsection (7), liabilities arising out of any other business of the

corporation are not to be allocated to a separate account, nor are any liabilities arising out of a

separate account to be allocated to any other account of the corporation, except as provided in

Subsection (11).

(7)

(a) Each separate account shall be considered as an insurer within the meaning of Subsection

31A-27a-102(23).

(b) A liquidation order under Section 31A-27a-401 for the general account or for any separate

account shall have effect as a rehabilitation order under Section 31A-27a-301 for all

other accounts of the corporation. Claims remaining unpaid after completion of the

liquidation under Chapter 27a, Insurer Receivership Act, shall be liens on the interests of

shareholders, if any, but not on any other interests, in all of the corporation's assets that are

not liquidated. The rehabilitator may transform these liens into ownership interests under

Section 31A-27a-302.

(8) Assets in excess of the liabilities allocated to separate accounts are the property of the

corporation.

(9) A corporation may own a particular asset in determinate proportions for separate accounts, for

its general account, or as a trustee when acting as such within its legal powers.

(10) The corporation may by an identifiable act transfer assets among the separate accounts, the

general account, and any trust accounts of the corporation, for fair consideration as defined in

Section 31A-27a-102.

(11) The general account of the corporation, or any separate account, may, for a fair consideration

as defined in Section 31A-27a-102, provide guarantees in connection with, perform

services for, or reinsure other accounts, subject to rules adopted by the commissioner. The

determination of a fair consideration shall be made by applying generally accepted accounting

principles and realistic actuarial tables.

(12) Section 31A-18-102 deals with separate account investments. Section 31A-20-106 requires

the commissioner's approval before delivery of certain variable contracts. Section 31A-22-411

and Subsection 31A-21-301(1)(d) deal with policy provisions in separate account contracts.

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Amended by Chapter 309, 2007 General Session

31A-5-217.5 Variable contract law.

(1) This section applies to a separate account that is used to support one or more of the following:

(a) a variable life insurance policy that satisfies the requirements of Section 817, Internal

Revenue Code;

(b) a variable annuity policy, including a modified guaranteed annuity; or

(2) If there is a conflict between this section and another section of this title as it relates to a

separate account described in Subsection (1), this section prevails.

(3)

(a) Subject to the other provisions of this Subsection (3), a domestic life insurer may:

(i) establish one or more separate accounts; and

(ii) allocate to those separate accounts amounts, which include:

(A) proceeds applied under optional modes of settlement or under dividend options, to

provide for life insurance or annuities; and

(B) benefits incidental to life insurance or annuities, payable in fixed, variable, or both fixed

and variable amounts.

(b) An insurer shall credit to or charge against a separate account the income, gains, and losses,

realized or unrealized, from assets allocated to the separate account, without regard to other

income, gains, or losses of the insurer.

referred to in Subsection (3)(d):

(i) an insurer may invest or reinvest amounts allocated to a separate account and

accumulations on those amounts without regard to the requirements or limitations

prescribed by the laws of this state governing the investments of a life insurer; and

(ii) an insurer may not take into account the investments in a separate account in applying the

investment limitations that otherwise apply to the investments of the insurer.

(d) Except with the approval of the commissioner and under any condition the commissioner

prescribes as to investments and other matters, which shall recognize the guaranteed nature

of the benefits provided, an insurer may not maintain in a separate account reserves for:

(i) benefits guaranteed as to dollar amount and duration; and

(ii) funds guaranteed as to principal amount or stated rate of interest.

(e)

(i) Except as provided in Subsection (3)(e)(ii) and unless otherwise approved by the

commissioner, assets allocated to a separate account shall be valued:

(A) at their market value on the date of valuation; or

(B) if there is no readily available market, then as provided under the terms of the contract,

rules, or other written agreement that applies to the separate account.

(ii) Unless otherwise approved by the commissioner, the portion of the assets of a separate

account that are equal to the insurer's reserve liability with regard to the guaranteed benefits

and funds referred to in Subsection (3)(d) shall be valued in accordance with the rules that

otherwise apply to the company's assets.

(f)

(i) An insurer owns the amounts it allocates to a separate account in the exercise of the power

granted by this section, and the insurer may not be, nor hold itself out to be, a trustee with

respect to those amounts.

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(ii) To the extent provided under the applicable insurance policy, an insurer may not charge

the portion of the assets of a separate account that is equal to the reserves and other

insurance liabilities with respect to the separate account with liabilities arising out of any

other business the insurer may conduct.

(g)

(i) A sale, exchange, or other transfer of assets may not be made by an insurer between any

of its separate accounts or between any other investment account and one or more of its

separate accounts unless:

(A) in case of a transfer into a separate account, the transfer is made solely to establish the

account or to support the operation of the insurance policies with respect to the separate

account to which the transfer is made; and

(B) the transfer, whether into or from a separate account, is made by:

(I) a transfer of cash; or

(II) if the transfer of securities is approved by the commissioner, a transfer of securities

having a readily determinable market value.

(ii) The commissioner may approve a transfer not described in Subsection (3)(g)(i) among the

accounts described in Subsection (3)(g)(i) if, in the commissioner's opinion, the transfer

would not be inequitable.

(h) To the extent an insurer considers it necessary to comply with an applicable federal or state

law, the insurer with respect to a separate account, including a separate account which is a

management investment company or a unit investment trust, may provide for a person having

an interest in the separate account to have appropriate voting and other rights and special

procedures for the conduct of the business of the separate account, including:

(i) special rights and procedures relating to investment policy;

(ii) investment advisory services;

(iii) selection of independent public accountants; and

(iv) the selection of a committee, the members of which need not be otherwise affiliated with the

insurer, to manage the business of the separate account.

Amended by Chapter 10, 2010 General Session

Amended by Chapter 324, 2010 General Session

31A-5-218 Subsidiaries.

(1) Subject to the limitations under Subsection 31A-18-106(1)(k), an insurance corporation may

form or acquire subsidiaries to do any lawful insurance business.

(2) An insurance corporation may form or acquire subsidiaries to hold or manage any assets that it

might hold or manage directly.

(3)

(a) An insurance corporation may form or acquire subsidiaries to perform functions or provide

services that are ancillary to its insurance operations.

(b) A subsidiary is an ancillary subsidiary if it is engaged principally in one or more of the

following:

(i) acting as an insurance producer;

(ii) investing, reinvesting, or trading in securities, or acting as a securities broker, dealer, or

marketing representative;

(iii) managing investment companies registered under the federal Investment Company Act of

1940, as amended, including related sales and services;

(iv) providing investment advice and services;

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(v) acting as administrative agent for a government instrumentality performing an insurance,

public assistance, or related function;

(vi) providing services related to insurance operations, including accounting, actuarial,

pension administration, appraisal, auditing, claims adjusting, collection, data processing,

communications, loss prevention, premium financing, safety engineering, and underwriting

services;

(vii) holding or managing property used by the corporation, alone or with its affiliates for the

convenient transaction of its business;

(viii) engaging in the motor club business under Chapter 11, Motor Clubs;

(ix) engaging in the business of any institution subject to the jurisdiction of the Department of

Financial Institutions under Title 7, Financial Institutions Act;

(x) providing similar services or performing similar activities which the commissioner declares

ancillary by rule; and

(xi) owning corporations that would be authorized as subsidiaries under Subsections (3)(b)(i)

through (3)(b)(ix) and under Subsections (1) and (2).

(4) An insurance corporation may form or acquire subsidiaries other than those under Subsections

(1) through (3), but only to the extent the insurer has excess surplus as defined under Section

31A-1-301.

(5)

(a) An insurance corporation shall notify the commissioner immediately following the formation or

acquisition of a subsidiary under this section.

(b) Chapter 16, Insurance Holding Companies, provides additional requirements that are

applicable to the acquisition of certain subsidiaries.

Amended by Chapter 298, 2003 General Session

31A-5-219 Amendment of articles.

(1) Subject to Subsection (3) and to the requirements of the Insurance Code, a stock corporation

may amend its articles under Sections 16-10a-1001 through 16-10a-1009 and a mutual

may amend its articles under Sections 16-6a-1001 through 16-6a-1005 in any manner,

including substantial changes of its original purposes. No amendment may be made contrary

to Subsections 31A-5-203(1) through (3).

(2) An amendment becomes effective when the properly adopted and filed articles of amendment

are approved by the commissioner.

(3) Section 16-10a-1009 applies to stock corporations and the second paragraph of Section

16-6a-1009 applies to mutuals.

Amended by Chapter 300, 2000 General Session

Part 3

Securities of Domestic Insurance Corporations

31A-5-301 Securities regulation.

(1)

(a) Except as provided in Subsections (1)(b) and (c), no security issued by a domestic or

nondomestic insurance corporation may be sold in this state by or for the corporation or any

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other person unless it is registered under Section 31A-5-302 and otherwise complies with this

chapter. Securities that comply with this chapter are not subject to Title 61, Chapter 1, Utah

Uniform Securities Act.

(b) Securities and transactions exempt under Section 61-1-14 are also exempt under this

chapter.

insurance corporation by an order after a hearing. The order shall explain the reasons for the

revocation.

(2)

(a) No person which is organizing or is acquiring additional funds in this state or elsewhere solely

or partly for the purpose of organizing a corporation under this chapter, may register or sell

its securities in this state, directly or indirectly, unless it obtains an organization permit under

Section 31A-5-204.

(b) No security may be registered or sold in this state if the person registering or selling the

security, or any person affiliated with the person, represents that an insurer will be organized

or purchased in this state with the proceeds of the sale, unless the issuer first obtains an

organization permit under Section 31A-5-204.

(3) If a security is issued or sold in violation of this chapter, the transaction is valid and enforceable

by an outsider against the corporation or against an insider, and is valid and enforceable by the

corporation against an insider.

(4) This section does not apply to securities issued prior to July 1, 1986.

Amended by Chapter 204, 1986 General Session

31A-5-302 Registration of securities.

(1)

(a) An insurance security shall be registered with the commissioner:

(i) by coordination under Section 61-1-9; or

(ii) by qualification under Section 61-1-10.

(b) A registration statement under this Subsection (1) shall conform to Section 61-1-11.

(2) The commissioner has the powers specified in Sections 61-1-12, 61-1-15, 61-1-19, 61-1-20,

and 61-1-24.

(3) Sections 61-1-16, 61-1-17, 61-1-18.3, and 61-1-25 apply to the regulation of securities under

this part.

(4) As used in this chapter, the words "commission" or "division" under Title 61, Chapter 1, Utah

Uniform Securities Act, mean the insurance commissioner.

Amended by Chapter 351, 2009 General Session

31A-5-303 Insider trading of securities.

(1) Every person who is directly or indirectly the beneficial owner of more than 10% of any class of

any equity security of a domestic stock insurance corporation, or who is a director or officer of

a domestic stock corporation, shall file with the commissioner within 10 days after he becomes

a beneficial owner, director, or officer, and within 10 days after the close of any following

calendar month in which there has been a change in his ownership or office, a statement

in a form prescribed by the commissioner, of his office and of all the equity securities of the

company which he beneficially owns, and of all the changes in either. The commissioner may

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accept a copy of a similar statement filed with another regulatory authority in satisfaction of this

subsection's requirement.

(2) To prevent the unfair use of information which may have been obtained by a beneficial owner,

director, or officer because of his relationship to the corporation, any profit realized by him from

the purchase and sale or sale and purchase of any equity security of the corporation within any

period of less than six months, unless the security was acquired in good faith in connection with

a debt previously contracted, is recoverable by the corporation. This recovery may be made in

spite of any intention by the beneficial owner, director, or officer in entering into the transaction

to hold the security purchased or not to repurchase the security sold for a period exceeding six

months. A suit to recover the profit may be instituted in any court of competent jurisdiction by

the corporation. If the corporation fails to bring suit within 60 days after request by the owner of

a security of the corporation or if the corporation fails to prosecute it diligently, the owner of any

security of the corporation may bring suit or prosecute the action in the name and on behalf of

the corporation. This suit may not be brought more than two years after the date the profit was

realized. This subsection does not apply to any transaction where the beneficial owner was not

a beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the

security involved, nor does it apply to any transaction which the commissioner, by rule, exempts

as not within the purpose of this subsection.

(3)

(a) A dealer in the ordinary course of his business and incident to his establishment or

maintenance of a primary or secondary market for the security other than on an exchange

as defined in the federal Securities Exchange Act of 1934, is not governed by Subsection

(2) regarding a purchase and sale or sale and purchase. The commissioner may by rule

define terms and prescribe conditions regarding securities held in an investment account and

transactions made in the ordinary course of business and incident to the establishment or

maintenance of a primary or secondary market.

(b) Subsections (1) and (2) do not apply to foreign or domestic arbitrage transactions unless

made in contravention of rules the commissioner adopts to carry out this section.

(i) the securities are registered, or are required to be registered, under Section 12 of the federal

Securities Exchange Act of 1934, as amended; or

(ii) the corporation did not have any class of its equity securities held of record by 100 or more

persons on the last business day of the year preceding the year in which equity securities of

the corporation would otherwise be subject to Subsections (1) and (2).

(4) No person may, in contravention of rules the commissioner adopts for the protection of

investors or the public, solicit or permit the use of his name to solicit a proxy, consent, or

authorization regarding an equity security of a domestic stock corporation having 100 or more

shareholders of record.

(5) No provision of this section imposing liability applies to an act done or omitted in good faith

in conformity with any rule of the commissioner. Liability does not apply even if the rule is

amended, rescinded, or determined by judicial or other authority to be invalid after the act or

omission.

(6) As used in this section, "equity security" means any stock or similar security; any security

convertible, with or without consideration, into stock or a similar security; carrying any warrant

or right to subscribe to or purchase stock or a similar security; any such warrant or right; or any

other security which the commissioner considers to be of similar nature and designates as an

equity security by rules promulgated in the public interest or for the protection of investors.

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Enacted by Chapter 242, 1985 General Session

31A-5-304 Promoter stock.

(1) While the organization permit is effective, the incorporators, directors, and principal officers

of a stock corporation shall in the aggregate subscribe and pay, at the public offering price,

at least $150,000 in cash or in property of equivalent value approved by the commissioner

under Subsection 31A-5-207(1)(a) or (2)(a), for shares offered by the corporation under the

organization permit.

(2)

(a) Certificates representing promotional securities and any stock received on those shares as

the result of a stock dividend, stock split, or exercise of preemptive or conversion rights, shall

be placed in escrow with a depository satisfactory to the commissioner under an agreement

providing that the shares may not be transferred without the approval of the commissioner.

(b) If the corporation issues any life insurance policies, any shares subject to this section shall

be released from escrow five years after issuance of the certificate of authority. In other

cases, the shares shall be released from escrow three years after issuance of the certificate

of authority.

(3) The commissioner's approval of the transfer of promoter stock under Subsection (2)(a):

(a) shall be granted upon request, if the corporation has made an addition to earned surplus in

each of the two immediately preceding years of at least 15% of the capital and surplus raised

by the sale of shares under the organization permit; and

(b) may be granted upon a showing of hardship by the shareholder or his estate or legatee, if the

release from escrow of the shares or a portion of the shares would not, in the commissioner's

opinion, endanger the interests of insureds or the public.

(4) For three years after the issuance of the certificate of authority, an option to purchase stock

may be issued only under a plan approved by the commissioner.

(5) This section does not apply to promotional securities issued prior to July 1, 1986.

Enacted by Chapter 242, 1985 General Session

31A-5-305 Authorized securities.

(1)

(a) The articles of incorporation of a stock corporation may authorize the kind of shares permitted

by Sections 16-10a-601 and 16-10a-602, and stock rights and options, except that:

(i) nonvoting common stock may not be issued;

(ii) all classes of common stock shall have equal voting rights;

(iii) all common stock shall have a stated par value; and

(iv) except with the commissioner's approval, for two years after the initial issuance of a

certificate of authority, the corporation may issue no shares and no other securities

convertible into shares except a single class of common stock.

(b) Section 16-10a-604 applies to the issuance of certificates for fractional shares or scrip.

by Subsection 31A-5-207(1)(a).

(d) The liability of subscribers and shareholders for unpaid subscriptions and the status of stock

is governed by Section 16-10a-622.

(e) A shareholder's preemptive rights is governed by Section 16-10a-630.

(f) Stock corporations may issue bonds and contribution notes on the same basis as mutuals

under Subsections (2)(a) and (b).

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(2)

(a) The articles of incorporation of a nonassessable mutual may authorize bonds of one or

more classes. The articles of incorporation shall specify the amount of each class of bonds

the corporation is authorized to issue, their designations, preferences, limitations, rates of

interest, relative rights, and other terms, subject to all of the following provisions:

(i) During the first year after the initial issuance of a certificate of authority, the corporation may

issue only a single class of bonds with identical rights.

(ii) After the first year, but within five years after the initial issuance of a certificate of authority,

additional classes of bonds may be authorized after receiving the approval of the

commissioner. The commissioner shall approve the issuance if the commissioner finds that

policyholders and prior bondholders will not be prejudiced.

(iii) The rate of interest shall be fair.

(iv) The bonds shall bear a maturity date not later than 10 years from the date of issuance,

when principal and accrued interest shall be due and payable, subject to Subsection (2)(d).

(b) A mutual may issue contribution notes with the commissioner's approval. The contribution

notes may be denominated by any name that is not misleading. The contribution notes

are subject to this subsection. The commissioner may approve the issuance only if the

commissioner finds that:

(i) the notes will not be issued in denominations of less than $2,500, and no single issue will be

sold to more than 15 persons;

(ii) no discount, commission, or other fee will be paid or allowed;

(iii) the notes will not be the subject of a public offering;

(iv) the terms of the notes are not prejudicial to policyholders, holders of mutual bonds, or prior

contribution notes; and

(v) the mutual's articles or bylaws do not forbid their issuance.

(i) if it has any outstanding obligations on bonds or contribution notes, borrow on contribution

notes from, or sell bonds to, any other insurer without the approval of the commissioner; or

(ii) make a loan to another insurer except a fully secured loan at usual market rates of interest.

(d) Payment of the principal or interest on bonds or contribution notes may be made in whole

or in part only after approval by the commissioner. The commissioner's approval shall be

given if all the financial requirements of the issuer to do the insurance business it is then

doing will continue to be satisfied after that payment, and if the interests of its insureds and

the public are not endangered by the payment. In the event of liquidation under Chapter 27a,

Insurer Receivership Act, unpaid amounts of principal and interest on contribution notes are

subordinate to the payment of principal and interest on any bonds issued by the corporation.

(e) This section does not prevent a mutual from borrowing money on notes which are its general

obligations, nor from pledging any part of its disposable assets.

(3) This section does not apply to securities issued prior to July 1, 1986.

Amended by Chapter 297, 2011 General Session

31A-5-306 Corporate repurchase of shares.

(1)

(a) To the extent of excess surplus, a stock corporation may repurchase its own shares 15 days

after giving written notice to the commissioner.

(b) A stock corporation without excess surplus shall obtain written approval of the commissioner

prior to repurchasing its own shares.

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(d) A stock corporation may not repurchase its own shares if it is hazardous or would become

hazardous as a result of the repurchase.

(2) Within 10 days after the end of any month in which it purchases more than 1% of any class of

its outstanding shares, the corporation shall report the price and the names of the registered

shareholders from whom the shares are acquired and of any other persons beneficially

interested in those shares, so far as the latter are known to the corporation. The corporation

shall make a similar report within 10 days after the end of any three-month period in which it

purchases more than 2% of any class of its outstanding shares and within 10 days after the

end of any 12-month period in which it purchases more than 5% of any class of its outstanding

shares. Section 16-10a-631 applies to the corporation's acquisition of its outstanding shares.

(3) Treasury shares may be disposed of by the corporation for their current market value or, if there

is no market, for the consideration the board of directors determines to be the fair value of the

shares.

(4) Section 31A-17-407 applies to accounting for treasury shares.

Amended by Chapter 9, 1996 Special Session 2

31A-5-307 Reduction in capital.

A stock corporation may reduce its capital by amendment of its articles of incorporation under

Section 31A-5-219, if the commissioner is notified of the proposed reduction at least 60 days prior

to the proposed effective date of the reduction. The commissioner may disapprove the reduction

within 45 days after the notice if he finds that it would violate the law or would be contrary to the

interests of insureds. His order shall explain in detail why the distribution is disapproved.

Amended by Chapter 277, 1992 General Session

Part 4

Management of Insurance Corporations

31A-5-401 Principal office and registered agent.

Each domestic insurance corporation shall have its principal office and place of business in

this state. By order, the commissioner may exempt a corporation from this requirement, in which

case it is subject to the requirement of Section 31A-14-204. The location of a domestic insurance

corporation's principal office and the existence of a registered agent are governed by Title 16,

Chapter 17, Model Registered Agents Act.

Amended by Chapter 364, 2008 General Session

31A-5-401.1 Definitions.

As used in this Part 4, Management of Insurance Corporations:

(1) "Voting members of mutuals" and "voting members" mean persons entitled to vote at annual

or special meetings of the members of a mutual, as set forth in the articles of incorporation or

amendments to the articles.

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(2) Voting members of mutuals and voting members do not necessarily include policyholders of the

mutual, if the articles of incorporation or amendments to the articles of incorporation so provide,

and if the articles of incorporation or amendments have been approved by the commissioner

after a hearing.

Amended by Chapter 90, 2004 General Session

31A-5-402 Shareholders' meetings.

(1) Sections 16-10a-701, 16-10a-702, 16-10a-705, 16-10a-721, 16-10a-724, 16-10a-726, and

16-10a-728 apply to the meetings, notices, quorums, and voting of stock corporations. Except

where a greater percentage is required or allowed under this title, the articles of incorporation of

domestic insurers may not require more than 50% of the shares represented for the approval of

an action requiring shareholder approval.

(2) Sections 16-10a-707 and 16-10a-720 apply to the closing of transfer books, the fixing of the

record date, and the voting lists of stock corporations.

(3) Section 16-10a-731 applies to stock corporations. The transfer of shares to a voting trust

does not preclude the trustor, or trustee, from being subject to Chapter 16, Insurance Holding

Companies.

Amended by Chapter 277, 1992 General Session

31A-5-403 Corruption in shareholders' meetings.

No person may, in connection with any meeting of shareholders, members, or policyholders

of an insurer, buy or sell a vote or proxy for money or any other thing of value, or engage in any

corrupt or dishonest practice in connection with the conduct of the shareholders' meeting.

Enacted by Chapter 242, 1985 General Session

31A-5-404 Communications to shareholders, policyholders, and voting members --

Commissioner's attendance at meetings.

(1)

(a) Sections 16-10a-1601 through 16-10a-1604 apply to the books and records and their

inspection by shareholders of stock corporations. Section 16-6a-1602 applies to the books

and records and inspection rights of policyholders or voting members of mutuals. However,

the inspection of the records of the names and addresses of policyholders or voting members

of mutuals is permitted only to communicate with other policyholders or voting members

regarding the nomination and election of candidates for the board, or for other corporate

matters which may be submitted to a vote of the policyholders or voting members. No

person may, directly or indirectly, use any information obtained in an inspection for any other

purpose.

(b) Any books, records, or minutes may be in written form or in any other form capable of being

converted into written form within a reasonable time.

a record of the names and addresses of policyholders entitled to vote or voting members,

is complied with by keeping a record of the names of policyholders or voting members and

the names and addresses of insureds or persons paying premiums. This provision requires

mailing or sending of notices, reports, proposals, ballots, or other materials to policyholders or

voting members of record.

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(2) Subject to Subsection (4), the commissioner may by rule prescribe that copies of specified

classes of communications circulated generally by a corporation to shareholders, policyholders,

or voting members be communicated to the commissioner at the same time.

(3) Subject to Subsection (4), the commissioner may attend any shareholders', policyholders', or

voting members' meeting as an observer.

(4) Subsection (3) and, so far as it relates to communications to shareholders, Subsection (2) do

not apply to stock corporations whose voting shares are owned by a single person, or whose

shareholders are either members of the board or are explicitly represented on it.

Amended by Chapter 300, 2000 General Session

31A-5-405 Meetings of mutuals and mutual policyholders' and members' voting rights.

(1)

(a) Subject to this section, Sections 16-6a-701, 16-6a-702, 16-6a-704, and 16-6a-714 apply to

the meetings of members, the notice, and the voting in mutuals.

(b) Subject to this section and Section 31A-5-409, Section 16-6a-711 applies to the voting of

members of mutuals.

(2)

(a) Policyholders or voting members in all mutuals have the right to vote on:

(i) conversion;

(ii) voluntary dissolution;

(iii) amendment of the articles; and

(iv) the election of directors except public directors appointed in accordance with Subsections

31A-5-409(1) and (2).

(b) The mutual may adopt reasonable provisions in its bylaws to determine:

(i) which individual among joint policyholders may exercise a voting right; and

(ii) how to deal with cases where the same individual is one of several joint policyholders in

various policies.

rights. These articles may require a greater percentage of affirmative votes to approve an

action than the statutes require.

(3)

(a) The articles or bylaws shall contain rules governing voting procedures and voting eligibility

consistent with Subsection (1).

(b) An amendment to a rule described in this Subsection (3) is not effective until at least 30 days

after the rule has been filed with the commissioner.

(4)

(a) The articles or bylaws may provide for regular or special meetings of the policyholders or

voting members, and, if meetings are not provided for, then mail elections shall be provided

for in lieu of elections at meetings.

(b) Notice of the time and place of regular meetings or elections shall be given to each

policyholder or voting member in a reasonable manner as the commissioner approves or

requires. Changes may be made by written notice mailed, properly addressed, and stamped,

to the last-known address of all policyholders or voting members.

(5)

(a) The articles may provide that representatives or delegates selected by the policyholders

or voting members shall be from specific geographical districts or defined classes of

policyholders or voting members, as determined on a reasonable basis.

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(b) After the representative assembly has been selected by the policyholder or voting members,

the assembly or the respective classes of policyholders or voting members may choose

replacements for members unable to complete their terms, if the articles provide for their

replacement.

members who gave the proxy.

Amended by Chapter 308, 2002 General Session

31A-5-407 Board of directors.

(1) Subject to this section, Sections 16-10a-801 through 16-10a-803, 16-10a-805, and 16-10a-811

apply to the board of directors of a stock corporation and Sections 16-6a-802 and 16-6a-805

apply to the governing board and trustees of mutuals.

(2) A majority of the directors shall be residents of this state unless the commissioner is satisfied

that the corporation's financial condition, management, and other circumstances give

assurance that the interests of insureds and the public will not be endangered by the majority

being nonresidents.

(3) Employees and agents of a corporation that receive more than 10% of their income from the

corporation, and persons related to any of them within the second degree by blood or marriage,

if directors, are considered "inside directors." Inside directors may not constitute a majority of

the corporation's board.

(4) Subsections (2) and (3) and the required number of directors for committees under Subsection

31A-5-412(1) do not apply to an insurance subsidiary authorized under Subsection

31A-5-218(1), nor to a stock insurance corporation, more than 50% of whose outstanding

shares entitled to vote are owned or controlled by a single person or all of whose voting

shareholders are either members of or are individually represented on the board.

(5) If the directors of a corporation are divided into classes by the articles or the bylaws, no class

may contain fewer than one-third of the total number of directors. Subject to this requirement,

Section 16-10a-804 applies to the classification of directors of stock corporations. When

classes of trustees or directors are provided in a mutual corporation, the terms of office of the

several classes need not be uniform.

(6) The board shall manage the business and affairs of the corporation and may not delegate its

power or responsibility, except as authorized by Section 31A-5-412.

(7) Section 16-10a-824 applies to the determination of a quorum of directors of a stock corporation

and Section 16-6a-816 applies to the determination of a quorum of trustees for a mutual, except

as specifically provided otherwise in this title.

(8)

(a) Sections 16-10a-820 and 16-10a-821 apply to the meetings and action without a meeting of

the board of directors of stock corporations.

(b) Sections 16-6a-812 through 16-6a-819 apply to the meetings and notice of mutuals.

(9) Sections 16-10a-1601 through 16-10a-1604 apply to stock corporations and Section

16-6a-1602 applies to mutuals regarding the examination of books and records of these

entities.

Amended by Chapter 300, 2000 General Session

31A-5-408 Election and removal of directors and officers of stock corporations.

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(1) Sections 16-10a-721, 16-10a-724, and 16-10a-728 apply to the voting of shares of a stock

corporation.

(2) At each annual meeting of shareholders, the shareholders shall elect directors to hold office

until the next succeeding annual election, except as provided under Subsection (3) or (4). Each

director shall hold office for the term for which he is elected and until his successor is elected

and qualified, if qualification is required.

(3) Sections 16-10a-808 and 16-10a-832 apply to removal of directors and officers of a stock

corporation.

(4) Each director shall be subject to election at least once every three years.

(5) A vacancy in the board of directors may be filled by the affirmative vote of a majority of the

remaining directors even though the number of remaining directors is less than a quorum.

The director elected through this process shall serve only until the next regular shareholders

meeting at which a director's election may be held.

Amended by Chapter 277, 1992 General Session

31A-5-409 Selection and removal of directors and officers of mutuals.

(1) The articles or bylaws of a mutual shall state:

(a) the number of directors of the mutual including the directors that are:

(i) appointed as public directors under this Subsection (1) and Subsection (2); or

(ii) elected under Subsection (3);

(b) the number of directors of the mutual that may be appointed as public directors; and

(i) a public director is to be appointed; and

(ii) a director who is not a public director is to be elected.

(2)

(a) The plan for the appointment of public directors specified in Subsection (1) shall assure true

public representation on the board.

(b) A person appointed as a public director shall have insurance business or other business or

professional experience that qualifies that person to serve responsibly and impartially as a

director.

(d) Notwithstanding Subsection (2)(c), a public director shall meet the qualifications of Subsection

(2)(b).

(3)

(a) A director who is not a public director shall be elected by:

(i) the policyholders; or

(ii) voting members.

(b) If the directors who are not public directors are divided into classes, one class shall be

elected:

(i) at least every four years; and

(ii) for a term not exceeding six years.

(4) A director may be removed from office for cause by an affirmative vote of a majority of the full

board at a meeting of the board called for that purpose.

(5) Subject to Subsections (1) through (4), Section 16-6a-810 applies to vacancies on the

governing board.

Amended by Chapter 308, 2002 General Session

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31A-5-410 Supervision of management changes.

(1)

(a) Immediately after the selection of a person as a director or principal officer, the insurer shall

report to the commissioner:

(i) the name of the person selected as a director or principal officer of a corporation; and

(ii) pertinent biographical and other data that the commissioner requires by rule.

(b) For five years after the initial issuance of a certificate of authority to a corporation, the

commissioner may, within 30 days after receipt of a report under Subsection (1)(a),

disapprove any person selected who fails to satisfy the commissioner that the person:

(i) is trustworthy; and

(ii) has the competence and experience necessary to discharge that person's responsibilities.

(2)

(a) Whenever a director or principal officer of a corporation is removed under a provision listed in

Subsection (2)(b), the insurer shall immediately report to the commissioner:

(i) the removal; and

(ii) a statement of the reasons for the removal.

(b) Subsection (2)(a) applies to a removal under:

(i) Subsection 16-6a-820(4);

(ii) Section 16-10a-808;

(iii) Section 16-10a-832; and

(iv) Subsection 31A-5-409(4).

(3) The commissioner may order the removal of a director or officer if the commissioner finds, after

a hearing, that:

(a) a director or officer:

(i) is incompetent;

(ii) untrustworthy;

(iii) is not qualified under Section 31A-5-409; or

(iv) has wilfully violated:

(A) this title;

(B) a rule adopted under Subsection 31A-2-201(3); or

(b) the circumstances described in Subsection (3)(a) endangers the interests of:

(i) insureds; or

(ii) the public.

Amended by Chapter 308, 2002 General Session

31A-5-411 Continuity of management in emergencies.

(1) If an emergency is caused by an attack on the United States or by a nuclear or other disaster

which makes it impracticable for a corporation to conduct its business in strict accord with

applicable provisions of law, its articles, bylaws, or its charter, this section facilitates the

continued operation of a domestic insurance corporation.

(2) The board of any corporation may adopt emergency bylaws, subject to repeal or change by

action of those having power to adopt regular bylaws. These bylaws shall operate during

a national emergency. Notwithstanding any different provisions in the regular bylaws, the

applicable statutes, or the corporation's articles or charter, these emergency bylaws may make

any provision that is reasonably necessary for operation during the emergency.

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Page 119

(3) If the board of a corporation has not adopted emergency bylaws, the following provisions are

effective in a national emergency:

(a) Three directors constitute a quorum for the transaction of business at all meetings of the

board.

(b) A vacancy on the board may be filled by a majority of the remaining directors, though less

than a quorum, or by a sole remaining director.

(c)

(i) If there are no surviving directors, but at least three officers of the corporation survive, the

three officers with the longest term of service become the directors and possess all of the

powers of the previous board and the powers that are granted under this section. The

emergency board may elect other directors by a majority vote.

(ii) If there are not three surviving officers, the commissioner shall appoint three natural

persons, including any surviving officers, as directors. They shall possess all of the powers

of the previous board and any powers granted under this section. The emergency board

may elect other directors by majority vote.

(4) The board of a corporation may, by resolution adopted by the board, provide that in the event

of a national emergency and in the event of the death or incapacity of specified officers of the

corporation, those officers shall be succeeded by the persons described in a succession list.

The list may name persons or position titles. It shall establish the order of priority, successors

in office, and it may prescribe the conditions for exercise of the powers of the office.

(5) The board of a corporation may, by resolution, provide that in a national emergency the home

office or principal place of business is a location named in the resolution. The resolution may

provide for alternate locations and establish an order of preference.

Enacted by Chapter 242, 1985 General Session

31A-5-412 Committees of directors.

(1)

(a) If provided for in the articles or bylaws of a corporation, the board, by resolution adopted by a

majority of the full board, may designate one or more committees.

(b) A committee designated under this Subsection (1) shall consist of three or more directors

serving at the pleasure of the board.

substitute for an absent member at any meeting of the committee.

(d) The designation of a committee and delegation of authority to the committee does not relieve

the board or a director of responsibility imposed by law upon the board or director.

(2)

(a)

(i) Except for a corporation described under Subsection 31A-5-407(4), a corporation shall have

an audit committee.

(ii) A corporation's entire board constitutes the audit committee if the corporation:

(A) is described under Subsection 31A-5-407(4); and

(B) does not have an audit committee that complies with this Subsection (2).

(b) If a corporation is required to have an audit committee under Subsection (2)(a), a member of

the audit committee may not be an inside director as defined under Subsection 31A-5-407(3).

the company and of the activities of the outside auditors, in order to advise the board on the

adequacy of fiscal control.

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(d) A corporation shall give an audit committee direct and private access to company data and

personnel as that committee considers necessary.

(e) An audit committee may meet privately with the outside directors as the audit committee sees

fit.

(f) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

commissioner may make rules pertaining to audit committee requirements similar to those

outlined in the Annual Financial Reporting Model Regulation of the National Association of

Insurance Commissioners.

(3)

(a) When the board is not in session, a committee may exercise the powers of the board in the

management of the business and affairs of the corporation to the extent authorized in the

resolution or in the articles or bylaws, except action regarding:

(i) compensation or indemnification of a person who is:

(A) a director;

(B) a principal officer; or

(ii) benefits or payments requiring shareholder or policyholder approval;

(iii) approval of a contract requiring board approval under Section 31A-5-414;

(iv) approval of a transaction in which a director has a material interest adverse to the

corporation;

(v) amendment of the articles or bylaws;

(vi) merger or consolidation under Section 31A-5-501, 31A-5-502, or 31A-5-503;

(vii) conversion under Section 31A-5-505, 31A-5-506, 31A-5-507, or 31A-5-509;

(viii) voluntary dissolution under Section 31A-5-504;

(ix) transfer of business or assets under Section 31A-5-508;

(x) any other decision requiring shareholder or policyholder approval;

(xi) amendment or repeal of an action taken by the full board, which by its terms is not subject

to amendment or repeal by a committee;

(xii) dividends or other distributions to shareholders, policyholders, or voting members other

than in the routine implementation of a policy determination of the full board;

(xiii) selection of a principal officer; and

(xiv) filling a vacancy on the board or on a committee created under Subsection (1), except

that the articles or bylaws may provide for a temporary appointment to fill a vacancy on the

board or a committee.

(b) A temporary appointment provided for in Subsection (3)(a)(xiv) may last only until the end of

the next board meeting.

(4) The full board shall review a transaction in which an officer has a material financial interest

adverse to the corporation at the next board meeting after the transaction.

Amended by Chapter 349, 2009 General Session

31A-5-413 Interlocking directorates and other relationships.

Any person who is simultaneously an officer or director of more than one insurer shall,

upon the commissioner's request, disclose all conflicts of interest arising from holding those

positions simultaneously. This disclosure shall be given to the directors of the insurers and to the

commissioner within 15 working days after receipt of the commissioner's request.

Amended by Chapter 204, 1986 General Session

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31A-5-414 Transactions in which directors and others are interested.

(1) Any material transaction between an insurance corporation and one or more of its directors or

officers, or between an insurance corporation and any other person in which one or more of its

directors or officers or any person controlling the corporation has a material interest, is voidable

by the corporation unless all the following exist:

(a) At the time the transaction is entered into it is fair to the interests of the corporation.

(b) The transaction has, with full knowledge of its terms and of the interests involved, been

approved in advance by the board or by the shareholders.

board or the shareholders.

(2) A director, whose interest or status makes the transaction subject to this section, may be

counted in determining a quorum for a board meeting approving a transaction under Subsection

(1)(b), but may not vote. Approval requires the affirmative vote of a majority of those present.

(3)

(a) The commissioner may by rule exempt certain types of transactions from the reporting

requirement of Subsection (1)(c).

(b) The commissioner has standing to bring an action on behalf of an insurer to have a contract

in violation of Subsection (1) declared void.

Amended by Chapter 401, 2023 General Session

Amended by Chapter 401, 2023 General Session, (Coordination Clause)

31A-5-415 Officers', directors', and employees' liability and indemnification.

(1)

(a) Section 16-10a-841 applies to the liabilities of directors of a stock corporation.

(b) Subsection 16-6a-825(3) applies to loans to trustees and officers of a mutual.

16-10a-842 is jointly and severally liable to the corporation for any loss on the distribution.

(2)

(a) Title 16, Chapter 10a, Part 9, Indemnification, applies to stock and mutual corporations,

but no indemnification may be paid until 30 or more days after sending a notice to the

commissioner of the full details of the proposed indemnification.

(b) The commissioner may bring an action in a court with jurisdiction under Title 78A, Judiciary

and Judicial Administration, to have such indemnification enjoined.

insurer in a hazardous condition, or exacerbate an existing financially hazardous condition.

Amended by Chapter 401, 2023 General Session

Amended by Chapter 401, 2023 General Session, (Coordination Clause)

31A-5-416 Compensation of director, officer, employee, person with investment authority, or

others.

(1) Subject to this section, Subsections 16-10a-302(11) and (12) apply to:

(a) a stock corporation; and

(b) a mutual corporation.

(2) Shareholders' approval is required:

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(a) of any benefit or payment to a director or officer for services rendered to a stock corporation

more than 90 days before the agreement or decision to give the benefit or make the payment,

unless the benefit or payment is made under a plan approved by the shareholders; and

(b) for a new pension plan, profit-sharing plan, stock option plan, or an amendment to an existing

plan which, so far as it pertains to any director or officer, substantially increases the financial

burden on the stock corporation.

(3) An action taken by the board of a mutual on the compensation of officers, directors, or

employees, other than setting individual salaries or standards for salaries of classes of

employees, shall be reported to the commissioner within 30 days.

(4) The annual statement of a stock or mutual corporation shall include the amount of all direct

and indirect remuneration for services, including retirement and other deferred compensation

benefits and stock options paid each year:

(a) for the benefit of each of the following whose remuneration exceeds an amount established

by the commissioner by rule:

(i) a director;

(ii) an officer; or

(iii) an employee;

(b) for all directors and officers as a group; and

(c)

(i) for the five most highly compensated officers;

(ii) for the five most highly compensated directors; and

(iii) for the five most highly compensated employees.

(5) An arrangement for compensation or other employment benefits for any director, officer, or

employee with decision-making power may not be made if it would:

(a) measure the compensation or other benefits in whole or in part by any criteria that would

create a financial inducement to act contrary to the best interests of the stock or mutual

corporation; or

(b) have a tendency to make the stock or mutual corporation depend for continuance or

soundness of operation upon the continuation of any director, officer, or employee in the

person's position of director, officer, or employee.

(6) Except for the insurer, a person having any authority in the investment or disposition of the

funds of a domestic insurer may not:

(a) accept any fee, brokerage, gift, or other emolument because of any investment, loan, deposit,

purchase, sale, payment, or exchange made by or for the insurer; or

(b) be financially interested in the investment or disposition of funds in any capacity.

(7) Unless the commissioner, acting in the corporation's best interests, orders otherwise, if

an order of rehabilitation or liquidation is issued under Section 31A-27a-301 or Section

31A-27a-401, the contractual obligations of the insurer for unperformed services of any director,

principal officer, or person performing similar functions or having similar powers are terminated.

This Subsection (7) does not apply to obligations vested before July 1, 1986.

Amended by Chapter 307, 2007 General Session

Amended by Chapter 309, 2007 General Session

31A-5-417 Exclusive management and exclusive agency contracts.

(1) No domestic insurer may enter into a contract that grants or surrenders the control and

management of the insurer, unless the commissioner gives express approval of the contract.

Such contracts, once approved, may not be amended without the commissioner's approval.

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Any contracts between a domestic reciprocal insurer, which insurers are governed under this

chapter as any other mutual, and the insurer's attorney-in-fact are subject to this subsection.

(2) Unless the contract is filed and approved by the commissioner, no domestic insurer may

enter into a contract granting, or allowing a person to have the exclusive or dominant right

to produce the entire insurance business for the insurer. This type of contract is considered

approved, unless disapproved by the commissioner within 30 days after filing. If disapproved,

the commissioner shall notify the insurer in writing of the grounds of the disapproval.

(3) The commissioner may not approve any contract under Subsection (1) or (2) that:

(a) subjects the insurer to excessive charges for expenses or commissions;

(b) vests any control in a person over the general affairs of the insurer to the exclusion of its

board of directors or officers;

(d) contains other inequitable provisions or provisions that may jeopardize the security of

policyholders.

Enacted by Chapter 242, 1985 General Session

31A-5-418 Dividends and other distributions.

(1) Subject to the requirements of Section 16-10a-842 and Subsection 31A-16-106(2), a stock

corporation may make distributions under Section 16-10a-640 if all the following conditions are

satisfied:

(a) A dividend may not be paid that would reduce the insurer's total adjusted capital below the

insurer's company action level RBC as defined in Subsection 31A-17-601(8)(b).

(b) Except as to excess surplus, or unless the commissioner issues an order allowing otherwise,

a dividend may not be paid that exceeds the insurer's net gain from operations or net income

for the period ending December 31 of the preceding year.

(2) Title 67, Chapter 4a, Revised Uniform Unclaimed Property Act, applies to unclaimed dividends

and distributions in insurance corporations.

Amended by Chapter 116, 2001 General Session

31A-5-420 Payment of dividends by mutual insurers.

(1) When it is in the best interests of the company, the directors of a domestic mutual insurer shall

declare, apportion, and pay to its members dividends from its net savings and earnings.

(2) The insurer shall make a reasonable classification of its participating policies and its

assumed risks. No dividend shall be paid that is inequitable, unfairly discriminates between

classifications of insurance contracts, or unfairly discriminates between policies within the same

classification.

(3) Unless stated in the policy, no dividend, otherwise earned, shall be contingent upon the

payment of the renewal premium on any policy.

(4) Subsection (1) may not be construed to require an insurer determined by the United States

Internal Revenue Service to be a nonprofit organization to pay a dividend in a manner which

would jeopardize that status.

Enacted by Chapter 242, 1985 General Session

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Part 5

Corporate Reorganization

31A-5-501 Merger of subsidiary corporation.

The merger of subsidiary insurance corporations is subject to the provisions of Chapter 16,

Insurance Holding Companies. In addition, the merger procedures outlined under Title 16,

Chapter 10a, Utah Revised Business Corporation Act, apply to the mergers of subsidiary insurance

corporations. For the purposes of this section, if the surviving corporation owns at least 80% of the

outstanding shares of each class of the corporation to be merged into the surviving corporation,

the procedures of Section 16-10a-1104, including no requirement of shareholder approval, may be

used.

Amended by Chapter 277, 1992 General Session

31A-5-502 Merger and consolidation of stock insurance corporations.

Any two or more stock insurance corporations may merge or consolidate, under the procedures

set forth under Title 16, Chapter 10a, Utah Revised Business Corporation Act. All mergers are

subject to the provisions of Chapter 16, Insurance Holding Companies.

Amended by Chapter 277, 1992 General Session

31A-5-503 Merger and consolidation of mutuals.

Any two or more mutuals may merge or consolidate, under the procedures set forth under Title

16, Chapter 6a, Utah Revised Nonprofit Corporation Act. All mergers of mutuals are subject to

Chapter 16, Insurance Holding Companies.

Amended by Chapter 300, 2000 General Session

31A-5-504 Voluntary dissolution of domestic insurance corporations.

(1)

(a) Except as otherwise modified by this section, a domestic stock insurance corporation may

dissolve under Sections 16-10a-1401 through 16-10a-1409 and Section 16-10a-1440.

(b) Except as otherwise modified by this section, a domestic mutual insurance corporation may

dissolve under Sections 16-6a-1401 through 16-6a-1409 and Section 16-6a-1419.

(2)

(a) At least 60 days prior to the submission to shareholders or policyholders of any proposed

voluntary dissolution of an insurance corporation, the plan of dissolution shall be filed with the

commissioner.

(b) The commissioner may require the submission of any information in addition to the plan of

dissolution that will establish:

(i) the financial condition of the corporation; or

(ii) other facts relevant to the proposed dissolution.

within 30 days after the adoption of the resolution, begin an examination of the corporation.

(d) The commissioner shall approve the dissolution unless the commissioner finds, after a

hearing, that the corporation:

(i) is insolvent; or

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(ii) may become insolvent in the process of dissolution.

(e) Upon approval, the corporation may:

(i) transfer all of its obligations under insurance policies to other insurers approved by the

commissioner; and

(ii) after the transfers described in Subsection (2)(e)(i), dissolve under Subsection (1).

(f) If the commissioner disapproves the dissolution, the commissioner shall petition the court for a

liquidation under Section 31A-27a-207.

(3) During the dissolution under Subsection (1), the corporation may apply to the commissioner

to have the dissolution continued under the commissioner's supervision. After receiving

this application, the commissioner shall apply to the court for a liquidation under Section

31A-27a-207.

(4) If the corporation revokes the voluntary dissolution proceedings under Section 16-6a-1404

or 16-10a-1404, the corporation shall file a copy of the revocation of voluntary dissolution

proceedings with the commissioner.

(5) In distributing the assets in the dissolution of a nonlife mutual, Section 31A-27a-705 applies.

(6)

(a) No remedy available to or against the corporation, its directors, officers, or shareholders

is taken away or impaired if an action or other proceeding is brought within two years after

dissolution for any right or claim existing, or any liability incurred, prior to the voluntary

dissolution under this section.

(b) The action or proceeding described in Subsection (6)(a) may be prosecuted or defended by

the corporation in its corporate name. The shareholders, directors, and officers may take

appropriate corporate or other action to protect the remedy, right, or claim.

articles of incorporation during the two years to provide for perpetual existence.

(7) During the voluntary dissolution of a domestic insurance corporation under this section, its

corporate existence continues to allow the winding up of the corporation's affairs regarding any

property and assets not distributed or otherwise disposed of prior to dissolution. To effect that

purpose, the corporation may:

(a) sell or otherwise dispose of the property and assets;

(b) sue and be sued;

(d) exercise all other necessary powers.

Amended by Chapter 309, 2007 General Session

31A-5-505 Conversion of a domestic stock corporation into a mutual.

A domestic stock corporation may be converted into a domestic mutual as follows:

(1) The board shall adopt a plan of conversion. After adopting the plan, no additional shares of

capital stock may be issued, except that the board may continue to issue stock options under

existing contracts, and holders of outstanding options may continue to exercise these options

until the conversion is completed under Subsection (5).

(2)

(a) The plan of conversion shall provide for the corporation's purchase of all of its outstanding

capital stock. The purchase price shall either be specified in the plan or be determined under

a formula specified in the plan, for cash, specified debt securities to be issued by the mutual

corporation, or both. All holders of capital stock of the same class have the same rights

under the plan. Shareholders may be given an election to take all or a portion of the price

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in the specified debt securities. Debt securities may be of any class authorized for mutual

corporations under Subsection 31A-5-305(2).

(b) The plan shall provide an equitable procedure for valuing contractual obligations of the stock

corporation, including those relating to stock options, which options terminate on the date of

conversion and are subject to being extinguished under Subsection (5)(b).

(3) No conversion may be effected unless the plan of conversion is approved by the commissioner

under Chapter 16, Insurance Holding Companies.

(4) After the commissioner approves the plan of conversion, it shall be submitted to the

shareholders for approval by the affirmative vote of a majority of each class of shares entitled to

vote. Only shareholders of record on the date of the board's action under Subsection (1) may

vote.

(5)

(a) If the shareholders approve the plan of conversion under Subsection (4), the commissioner

shall issue a new certificate of authority and the board shall then implement the plan of

conversion. The issuance of the certificate is the conversion of the corporation to a mutual.

The corporation is no longer a stock corporation. The mutual is considered as having been

organized at the time the converted stock corporation was organized.

(b) Any contractual obligation inconsistent with the nature of a mutual, including any obligation

to issue or to redeem stock options, terminates upon the conversion under Subsection (5)(a),

without compensation other than provided under Subsection (2)(b), unless the obligation was

legally binding before July 1, 1986.

(6) The corporation may not pay any person, in connection with the proposed conversion,

compensation other than regular salaries to existing personnel and compensation for clerical

and mailing expenses. With the commissioner's approval, the corporation in connection with

the proposed conversion may pay reasonable printing costs and legal and other professional

fees for services actually rendered. All expenses of the conversion, including the expenses

incurred by the commissioner and the prorated salaries and fringe benefits of any Insurance

Department staff members involved, shall be paid by the corporation being converted.

Enacted by Chapter 242, 1985 General Session

31A-5-506 Conversion of a domestic mutual into a stock corporation.

(1)

(a) Except as provided in Subsection (1)(b), a domestic mutual may be converted into a domestic

stock corporation under Subsections (2) through (11).

(b) A domestic mutual that is affiliated with other mutuals may not be converted into a stock

corporation, unless all the affiliated mutuals are converted at the same time, or the

commissioner finds that the interests of the policyholders of the remaining mutuals can be

permanently protected by limitations on the corporate powers of the new stock corporation or

on its authority to do business, or otherwise.

(2) The board shall pass a resolution stating that the conversion is in the best interests of the

policyholders. The resolution shall specify the reasons for and the purposes of the proposed

conversion, and how the conversion is expected to benefit policyholders.

(3)

(a) Chapter 16, Insurance Holding Companies, applies to the conversion of a domestic mutual

into a stock corporation. In addition, the commissioner shall order the examination and

appraisal of the corporation, unless the commissioner finds that:

(i) the resolution is defective upon its face; or

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(ii) the basis or the purposes of the proposed conversion are contrary to law, to the interests of

the policyholders, or to the public.

(b) The commissioner shall examine the company and all of its controlled affiliates under

Section 31A-2-203 to determine their financial condition and whether they are operating in

accordance with law.

and disinterested persons with differing expertise, to determine the value of the corporation

on the date of the resolution required by Subsection (2). Members of the appraisal committee

shall receive reasonable compensation and shall be reimbursed for reasonable expenses

in discharging their duties. They may employ consultants to advise them on technical

problems of the appraisal, if necessary. The appraisal committee shall consider the assets

and liabilities of the corporation, adjusting liabilities to take account of:

(i) the amounts of any reserves in excess of or below realistic estimates;

(ii) the value of the marketing organization;

(iii) the value of goodwill;

(iv) the going-concern value; and

(v) any other factor having an influence on the value of the corporation.

(4) When the examination and appraisal reports have been made to the commissioner, the

commissioner shall make copies available to the board. The board shall then prepare and

adopt by resolution a plan of conversion. The plan shall be consistent with Subsections (4)(a)

through (e) and shall state how the requirements of those subsections are satisfied.

(a) The plan of conversion shall state the number of shares proposed to be authorized for the

new stock corporation, their par value, if any, and the price per share at which they will be

offered to policyholders. The price per share may not exceed 1/2 of the median equitable

share of all policyholders under Subsection (4)(b).

(b)

(i) When an insurer has the type of policies with no investment value to the policyholders, each

person who has been a policyholder and has paid premiums within five years prior to the

resolution under Subsection (2) is entitled, without additional payment, to as much common

stock of the new stock corporation as that person's equitable share of the value of the

converting corporation will purchase. The equitable share is determined by the ratio which

the net premium that person has paid to the corporation during the five years immediately

preceding the resolution required by Subsection (2) bears to the total net premiums received

by the corporation during the same period. The net premium is the gross premium less the

return premium and dividends paid. If the equitable share would only purchase a fraction of

a share of stock, the policyholder has the option of either receiving the value of the fractional

share in cash or purchasing a full share by paying the balance in cash.

(ii) When an insurer has the type of policies with specifically attributable investment value to the

policyholders, each policyholder is entitled, without additional payment, to as much common

stock of the new stock corporation as the policyholder's investment value in the converting

corporation will purchase, determined by the proportion of the policyholder's investment

value to the aggregate investment values of all policyholders. If the policyholder's share

would only purchase a fraction of a share of stock, the policyholder has the option of either

receiving the value of the fractional share in cash or purchasing a full share by paying the

balance in cash.

equitable share and the terms upon which the policyholder may subscribe for stock.

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(d) Common shares may not be subscribed by or issued to persons other than policyholders,

until all subscriptions by the policyholders have been filled. After those subscriptions have

been filled, any new issue of stock for five years after the conversion shall first be offered to

the persons who have become shareholders under Subsection (4)(b) in proportion to their

interests under Subsection (4)(b).

(e) A policyholder in a nonlife mutual may not receive a distribution of shares valued under

Subsection (4)(b)(i), which distribution is greater than the amount the policyholder is entitled

to under Section 31A-27a-701. Any excess over the policyholder's entitlement under Section

31A-27a-701 shall be distributed in accordance with Section 31A-27a-705.

(5) The plan of conversion shall be submitted to the commissioner for approval, together with:

(a) the proposed articles and bylaws of the new stock corporation which comply with Section

31A-5-203;

(b) any information specified under Subsection 31A-5-204(2), which the commissioner

reasonably requires; and

years after the conversion.

(6) The commissioner shall then hold a hearing. The notice of the hearing shall be mailed to each

person who was a policyholder of the corporation on the date of the resolution required by

Subsection (2). This notice shall include a copy of the plan of conversion and any comments

the commissioner considers necessary to adequately inform the policyholders.

(7) The commissioner shall approve the plan of conversion unless the commissioner finds that the

plan violates the law or is contrary to the interests of policyholders or the public.

(8) After approval under Subsection (7), the conversion plan shall be submitted to a vote of:

(a) for mutuals subject to Subsection (4)(b)(i), those persons who were policyholders of the

mutual on the date of the resolution required by Subsection (2); or

(b) for mutuals subject to Subsection (4)(b)(ii), those persons who had investment values in their

policies as of the date of the resolution required by Subsection (2).

(9) If the policyholders approve the conversion under Subsection (8), the commissioner shall issue

a new certificate of authority. The issuance of the certificate is the conversion of the mutual

to a stock corporation. This stock corporation is considered as being organized at the time

the converted mutual was organized. Subject to the plan of conversion, the directors, officers,

agents, and employees of the mutual shall continue in their same positions with the stock

corporation.

(10) In the proposed conversion, the corporation may not pay any person compensation other

than regular salaries to existing personnel and compensation for clerical and mailing expenses.

With the commissioner's approval, the corporation may pay, at reasonable rates, for printing

costs and for legal and other professional fees for services actually rendered. All expenses of

the conversion, including the expenses incurred by the commissioner and the prorated salaries

of any department staff members involved, shall be paid by the corporation being converted.

(11) The commissioner's approval of the plan of conversion satisfies the registration requirement of

Section 31A-5-302.

(12) This section does not apply to a mutual reorganization or merger under Section 31A-16-102.6.

Amended by Chapter 198, 2022 General Session

31A-5-507 Conversion of assessable to nonassessable and nonassessable to assessable

mutuals.

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(1) When an assessable mutual accumulates enough surplus to satisfy the financial requirements

for the operation of a nonassessable mutual, it may apply for a certificate of authority

authorizing it to sell nonassessable policies. The commissioner shall issue a certificate of

authority designating it a nonassessable mutual, if he finds that the applicant satisfies the

requirements of the law and that the issuance of nonassessable policies will not endanger the

interests of its insureds or the public. Policies issued after the issuance of this certificate of

authority are nonassessable. Existing policies remain in effect and are nonassessable.

(2) A nonassessable mutual may apply to the commissioner for a certificate of authority

designating it an assessable mutual. The commissioner shall issue the certificate if the law

permits the corporation to issue assessable policies and if he finds that the conversion will

not endanger the interests of insureds or the public. All policies issued after conversion are

assessable, unless otherwise provided by contract.

Enacted by Chapter 242, 1985 General Session

31A-5-508 Transfer of business or assets.

(1) In the sale, lease, exchange, or mortgage of assets with or without shareholder action, and

concerning the rights of dissenting shareholders in those transactions, Sections 16-10a-1201,

16-10a-1202, 16-10a-1320 through 16-10a-1328, 16-10a-1330, and 16-10a-1331 apply to

stock corporations. In the sale, lease, exchange, or mortgage of assets, Section 16-6a-1201

applies to mutuals.

(2) Chapter 16, Insurance Holding Companies, applies to:

(a) the sale of a domestic insurer's assets or book of business, other than in the ordinary course

of business; or

(b) the insurer entering into contracts of reinsurance which have substantially the same effect as

a merger.

Amended by Chapter 300, 2000 General Session

31A-5-509 Conversion of a domestic mutual life insurance company into a fraternal.

A domestic mutual life insurance company may be converted into a fraternal under Chapter 9,

Insurance Fraternals, in the following manner:

(1) The board of directors of the company shall adopt a plan of conversion stating:

(a) the basis for and the purposes of the proposed action;

(b) the proposed articles and bylaws for the new fraternal; and

(2) The plan shall be filed with the commissioner for approval, together with the information under

Subsection 31A-9-205(2) required by the commissioner. The commissioner shall approve the

plan unless he finds, after a hearing, that:

(a) the conversion would be contrary to the law;

(b) the new fraternal would not satisfy the requirements for a certificate of authority under Section

31A-5-212 as incorporated by Section 31A-9-210; or

(3) After being approved by the commissioner, the plan shall be submitted to the policyholders for

their approval.

(4) A copy of the plan adopted by the policyholders shall be filed with the commissioner, with a

statement indicating the number and percentages of policyholders voting, the method of voting,

and the number of votes cast in favor of the plan.

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(5) If all requirements of the law are met, the commissioner shall issue a certificate of authority for

the new fraternal. Upon this issuance, the mutual ceases its legal existence and the corporate

existence of the new fraternal begins. The new fraternal is considered as having been

incorporated on the date the converted mutual was incorporated. The new fraternal has all of

the assets and is liable for all of the obligations of the converted mutual. The commissioner

may grant a fraternal an adjustment period, not to exceed one year, for compliance with the

requirements of Chapter 9, Insurance Fraternals. The commissioner's extension shall specify

the extent to which particular provisions of Chapter 9, Insurance Fraternals, do not apply.

Amended by Chapter 204, 1986 General Session

Part 6

Miscellaneous Provisions

31A-5-601 Duties of officers, directors, agents, and employees.

(1) Any officer, director, agent, attorney, or employee upon whom legal process is properly served

or who receives notice of any legal action that may affect or involve the property or business

of the insurer, shall promptly communicate the service or notice and detailed information about

it to facilitate informed response to persons in the insurer's organization who have authority to

take responsive action or to instigate responsive action by those in authority.

(2) A director of an insurer is assumed to have enough knowledge of its affairs to determine

whether any act, proceeding, or omission of its directors is a violation of any provision of this

chapter. If a director is present at a meeting of directors at which a violation of any provision

of this chapter occurs, he is considered as concurring in the violation unless at the meeting he

requires his dissent to be entered on the minutes. If a director is absent from the meeting, he

is considered as concurring in any violation if the facts of violation appear on the minutes of the

meeting and he remains a director for six months after the violation without requiring that his

dissent from the violation be entered upon the record or the minutes.

Enacted by Chapter 242, 1985 General Session

31A-5-602 Doing business in other states.

(1) Subject to Subsection (2), no domestic insurer may do an insurance business in any state in

which it does not have a certificate of authority. It may not knowingly solicit in those states

in any manner. Advertisements through printed media, radio, or television do not violate this

subsection if they originate outside the state where there is no authority to do business, are not

specifically directed to citizens of that state, and have a majority of their audience in states in

which the insurer does have a certificate of authority.

(2) A domestic insurer may do a surplus lines business in a state in which it is not authorized, only

if it complies with the surplus lines law of that state.

Enacted by Chapter 242, 1985 General Session

Part 7

Disclosure of Material Transactions

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31A-5-701 General reporting requirement.

(1) An insurer domiciled in this state shall file a report with the commissioner disclosing any

transaction listed in Subsection (2), unless the transaction has been submitted to the

commissioner for review, approval, or information purposes pursuant to other provisions of this

title or rules or other requirements made pursuant to this title.

(2) A report is required under Subsection (1) to disclose:

(a) material acquisitions and dispositions of assets; or

(b) material nonrenewals, cancellations, or revisions of ceded reinsurance agreements.

(3) The report required in Subsection (1) is due within 15 days after the end of the calendar month

in which any of the transactions described in Subsection (2) occurs.

(4)

(a) Except as provided in Subsection (4)(b), reports obtained by or disclosed to the commissioner

pursuant to this part are confidential and are not subject to subpoena and may not be made

public by the commissioner or any other person or organization, without the prior written

consent of the insurer to which it pertains.

(b)

(i) The commissioner may publish all or any part of a report in the manner the commissioner

considers appropriate if the commissioner determines that the interest of policyholders,

shareholders, or the public will be served by publication, after giving notice and an

opportunity to be heard to the insurer who would be affected.

(ii) All or any part of a report may be disclosed without notice or consent to insurance

departments of other states.

Enacted by Chapter 9, 1996 Special Session 2

31A-5-702 Acquisitions and dispositions of assets.

(1)

(a) An acquisition or disposition of asset is not subject to the reporting requirements of Section

31A-5-701 if the acquisitions or dispositions are not material.

(b) For purposes of this part, an acquisition, a disposition, or the aggregate of any series of

related acquisitions or related dispositions during any 30-day period, is material if it is:

(i) nonrecurring;

(ii) not in the ordinary course of business; and

(iii) involves more than 5% of the reporting insurer's total admitted assets as reported in its

most recent statutory statement.

(2)

(a) An asset acquisition subject to this part includes every purchase, lease, exchange, merger,

consolidation, succession, or other acquisition other than the construction or development of

real property by or for the reporting insurer or the acquisition of materials for that purpose.

(b) An asset disposition subject to this part includes every sale, lease, exchange, merger,

consolidation, mortgage, hypothecation, assignment, whether for the benefit of creditors or

otherwise, abandonment, destruction, or other disposition.

(3)

(a) The following information is required to be disclosed in any report filed pursuant to Section

31A-5-701 of a material acquisition or disposition of assets:

(i) the date of the transaction;

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(ii) the manner of acquisition or disposition;

(iii) a description of the assets involved;

(iv) the nature and amount of the consideration given or received;

(v) the purpose of, or reason for, the transaction;

(vi) the manner by which the amount of consideration was determined;

(vii) any gain or loss recognized or realized as a result of the transaction; and

(viii) the name of any person from whom the assets were acquired or to whom they were

disposed.

(b)

(i) Insurers are required to report material acquisitions and dispositions on a nonconsolidated

basis unless the insurer:

(A) is part of a consolidated group of insurers that uses a pooling arrangement or 100%

reinsurance agreement that affects the solvency and integrity of the insurer's reserves;

and

(B) ceded substantially all of its direct and assumed business to the pool.

(ii) For purposes of this section, an insurer is considered to have ceded substantially all of its

direct and assumed business to a pool if:

(A) the insurer has less than $1,000,000 total direct plus assumed written premiums during a

calendar year that are not subject to a pooling arrangement; and

(B) the net income of the business not subject to the pooling arrangement represents less

than 5% of the insurer's capital and surplus.

Enacted by Chapter 9, 1996 Special Session 2

31A-5-703 Nonrenewals, cancellations, or revisions of ceded reinsurance agreements.

(1)

(a) A nonrenewal, cancellation, or revision of ceded reinsurance agreements is not subject to the

reporting requirements of Section 31A-5-701 if:

(i) the nonrenewal, cancellation, or revision is not material; or

(ii) with respect to a property and casualty business, the insurer's total ceded written premium,

on an annualized basis, is less than 10% of its total written premium for direct and assumed

business; or

(iii) with respect to a life, annuity, and accident and health business, the total reserve credit

taken for business ceded, on an annualized basis, is less than 10% of the statutory reserve

requirement prior to a cession.

(b) For purposes of this part, a material nonrenewal, cancellation, or revision is one that affects:

(i) with respect to a property and casualty business:

(A) more than 50% of the insurer's total ceded written premium; or

(B) more than 50% of the insurer's total ceded indemnity and loss adjustment reserves;

(ii) with respect to a life, annuity, and accident and health business, more than 50% of the

total reserve credit taken for business ceded, on an annualized basis, as indicated in the

insurer's most recent annual statement; or

(iii) with respect to either property and casualty or life, annuity, or accident and health business:

(A) an authorized reinsurer representing more than 10% of a total cession is replaced by one

or more unauthorized reinsurers; or

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(B) previously established collateral requirements have been reduced or waived as respects

one or more unauthorized reinsurers representing collectively more than 10% of a total

cession.

(2)

(a) The following information is required to be disclosed in any report filed pursuant to Section

31A-5-701 of a material nonrenewal, cancellation, or revision of a ceded reinsurance

agreement:

(i) the effective date of the nonrenewal, cancellation, or revision;

(ii) the description of the transaction with an identification of the initiator of the transaction;

(iii) the purpose of, or reason for the transaction; and

(iv) if applicable, the identity of the replacement reinsurers.

(b)

(i) Insurers are required to report all material nonrenewals, cancellations, or revisions of ceded

reinsurance agreements on a nonconsolidated basis unless the insurer:

(A) is part of a consolidated group of insurers that uses a pooling arrangement or 100%

reinsurance agreement that affects the solvency and integrity of the insurer's reserves;

and

(B) ceded substantially all of its direct and assumed business to the pool.

(ii) An insurer is considered to have ceded substantially all of its direct and assumed business

to a pool if:

(A) the insurer has less than $1,000,000 total direct plus assumed written premiums during a

calendar year that are not subject to a pooling arrangement; and

(B) the net income of the business not subject to the pooling arrangement represents less

than 5% of the insurer's capital and surplus.

Amended by Chapter 116, 2001 General Session

Chapter 6a

Service Contracts

31A-6a-101 Definitions.

As used in this chapter:

(1) "Home warranty service contract" means a service contract that requires a person to repair or

replace a component, system, or appliance of a home or make indemnification to the contract

holder for the repair or replacement of a component, system, or appliance of the home:

(a) upon mechanical or operational failure of the component, system, or appliance;

(b) for a predetermined fee; and

(i) the person is not the builder, seller, or lessor of the home that is the subject of the contract;

and

(ii) the failure described in Subsection (1)(a) occurs within a specified period of time.

(2)

(a) "Incidental cost" means a cost, incurred by a warranty holder in relation to a vehicle protection

product warranty, that is in addition to the cost of purchasing the warranty.

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(b) "Incidental cost" includes an insurance policy deductible, a rental vehicle charge, the

difference between the actual value of the stolen vehicle at the time of theft and the cost of a

replacement vehicle, sales tax, a registration fee, a transaction fee, a mechanical inspection

fee, or damage a theft causes to a vehicle.

(3) "Mechanical breakdown insurance" means a policy, contract, or agreement issued by an

insurance company that has complied with either Chapter 5, Domestic Stock and Mutual

Insurance Corporations, or Chapter 14, Foreign Insurers, that undertakes to perform or provide

repair or replacement service on goods or property, or indemnification for repair or replacement

service, for the operational or structural failure of the goods or property due to a defect in

materials, workmanship, or normal wear and tear.

(4) "Nonmanufacturers' parts" means replacement parts not made for or by the original

manufacturer of the goods commonly referred to as "after market parts."

(5)

(a) "Road hazard" means a hazard that is encountered while driving a motor vehicle.

(b) "Road hazard" includes potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or

composite scraps.

(6)

(a) "Service contract" means a contract or agreement to perform or reimburse for the repair or

maintenance of goods or property, for their operational or structural failure due to a defect

in materials, workmanship, normal wear and tear, power surge or interruption, or accidental

damage from handling, with or without additional provision for incidental payment of indemnity

under limited circumstances, including towing, providing a rental car, providing emergency

road service, and covering food spoilage.

(b) "Service contract" does not include:

(i) mechanical breakdown insurance; or

(ii) a prepaid contract of limited duration that provides for scheduled maintenance only,

regardless of whether the contract is executed before, on, or after May 9, 2017.

contract holder for any one or more of the following services:

(i) the repair or replacement of tires, wheels, or both on a motor vehicle damaged as a result of

coming into contact with a road hazard;

(ii) the removal of dents, dings, or creases on a motor vehicle that can be repaired using the

process of paintless dent removal without affecting the existing paint finish and without

replacing vehicle body panels, sanding, bonding, or painting;

(iii) the repair of chips or cracks in or the replacement of a motor vehicle windshield as a result

of damage caused by a road hazard, that is primary to the coverage offered by the motor

vehicle owner's motor vehicle insurance policy; or

(iv) the replacement of a motor vehicle key or key-fob if the key or key-fob becomes inoperable,

lost, or stolen, except that the replacement of lost or stolen property is limited to only the

replacement of a lost or stolen motor vehicle key or key-fob.

(7) "Service contract holder" or "contract holder" means a person who purchases a service

contract.

(8) "Service contract provider" means a person who issues, makes, provides, administers, sells

or offers to sell a service contract, or who is contractually obligated to provide service under a

service contract.

(9) "Service contract reimbursement policy" or "reimbursement insurance policy" means a policy of

insurance providing coverage for all obligations and liabilities incurred by the service contract

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provider or warrantor under the terms of the service contract or vehicle protection product

warranty issued by the provider or warrantor.

(10)

(a) "Vehicle protection product" means a device or system that is:

(i) installed on or applied to a motor vehicle; and

(ii) designed to:

(A) prevent the theft of the vehicle; or

(B) if the vehicle is stolen, aid in the recovery of the vehicle.

(b) "Vehicle protection product" includes:

(i) a vehicle protection product warranty;

(ii) an alarm system;

(iii) a body part marking product;

(iv) a steering lock;

(v) a window etch product;

(vi) a pedal and ignition lock;

(vii) a fuel and ignition kill switch; and

(viii) an electronic, radio, or satellite tracking device.

(11) "Vehicle protection product warranty" means a written agreement by a warrantor that provides

that if the vehicle protection product fails to prevent the theft of the motor vehicle, or aid in the

recovery of the motor vehicle within a time period specified in the warranty, not exceeding 30

days after the day on which the motor vehicle is reported stolen, the warrantor will reimburse

the warranty holder for incidental costs specified in the warranty, not exceeding $5,000, or in a

specified fixed amount not exceeding $5,000.

(12) "Vehicle service contract" means a service contract for the repair or maintenance of a vehicle:

(a) for operational or structural failure because of a defect in materials, workmanship, normal

wear and tear, or accidental damage from handling; and

(b) with or without additional provision for incidental payment of indemnity under limited

circumstances, including towing, providing a rental car, or providing emergency road service.

(13) "Warrantor" means a person who is contractually obligated to the warranty holder under the

terms of a vehicle protection product warranty.

(14) "Warranty holder" means the person who purchases a vehicle protection product, any

authorized transferee or assignee of the purchaser, or any other person legally assuming the

purchaser's rights under the vehicle protection product warranty.

Amended by Chapter 32, 2020 General Session

31A-6a-102 Scope and purposes.

(1) The purposes of this chapter are to:

(a) create a legal framework within which service contracts may be sold in this state;

(b) encourage innovation in the marketing and development of more economical and effective

ways of providing services under service contracts, while placing the risk of innovation on the

service contract providers rather than on consumers; and

paying for these services.

(2) Service contracts may not be issued, sold, or offered for sale in this state unless the provider

has complied with this chapter.

(3) This chapter applies only to a service contract not otherwise exempted from this title by Section

31A-1-103.

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Amended by Chapter 116, 2001 General Session

31A-6a-103 Requirements for doing business.

(1) A service contract or vehicle protection product warranty may not be issued, sold, or offered for

sale in this state unless the service contract or vehicle protection product warranty is insured

under a reimbursement insurance policy issued by:

(a) an insurer authorized to do business in this state; or

(b) a recognized surplus lines carrier.

(2)

(a) A service contract or vehicle protection product warranty may not be issued, sold, or offered

for sale unless the service contract provider or warrantor completes the registration process

described in this Subsection (2).

(b) To register, a service contract provider or warrantor shall submit to the department the

following:

(i) an application for registration;

(ii) a fee established in accordance with Section 31A-3-103;

(iii) a copy of any service contract or vehicle protection product warranty that the service

contract provider or warrantor offers in this state; and

(iv) a copy of the service contract provider's or warrantor's reimbursement insurance policy.

(b) no less than 30 days before the day on which the service provider or warrantor issues,

sells, offers for sale, or uses a service contract, vehicle protection product warranty, or

reimbursement insurance policy in this state.

(d) A service provider or warrantor shall file any modification of the terms of a service contract,

vehicle protection product warranty, or reimbursement insurance policy 30 days before the

day on which it is used in this state.

(e) A person complying with this chapter is not required to comply with:

(i) Subsections 31A-21-201(1) and 31A-23a-402(3); or

(ii) Chapter 19a, Utah Rate Regulation Act.

(f)

(i) Each year before March 1, a service provider shall pay an annual registration fee established

in accordance with Section 31A-3-103.

(ii) If a service provider does not pay the annual registration fee described in this Subsection (2)

(f) before March 1:

(A) the service provider's registration is expired; and

(B) the service provider may apply for registration in accordance with this Subsection (2).

(3)

(a) Premiums collected on a service contract are not subject to premium taxes.

(b) Premiums collected by an issuer of a reimbursement insurance policy are subject to premium

taxes.

(4) A person marketing, selling, or offering to sell a service contract or vehicle protection product

warranty for a service contract provider or warrantor that complies with this chapter is exempt

from the licensing requirements of this title.

(5) A service contract provider or warrantor complying with this chapter is not required to comply

with:

(a) Chapter 5, Domestic Stock and Mutual Insurance Corporations;

(b) Chapter 7, Nonprofit Health Service Insurance Corporations;

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(d) Chapter 9, Insurance Fraternals;

(e) Chapter 10, Annuities;

(f) Chapter 11, Motor Clubs;

(g) Chapter 12, State Risk Management Fund;

(h) Chapter 14, Foreign Insurers;

(i) Chapter 19a, Utah Rate Regulation Act;

(j) Chapter 25, Third Party Administrators; and

(k) Chapter 28, Guaranty Associations.

Amended by Chapter 32, 2020 General Session

31A-6a-104 Required disclosures.

(1) A reimbursement insurance policy insuring a service contract or a vehicle protection product

warranty that is issued, sold, or offered for sale in this state shall conspicuously state that, upon

failure of the service contract provider or warrantor to perform under the contract, the issuer of

the policy shall:

(a) pay on behalf of the service contract provider or warrantor any sums the service contract

provider or warrantor is legally obligated to pay according to the service contract provider's or

warrantor's contractual obligations under the service contract or a vehicle protection product

warranty issued or sold by the service contract provider or warrantor; or

(b) provide the service which the service contract provider is legally obligated to perform,

according to the service contract provider's contractual obligations under the service contract

issued or sold by the service contract provider.

(2)

(a) A service contract may not be issued, sold, or offered for sale in this state unless the service

contract contains the following statements in substantially the following form:

(i) "Obligations of the provider under this service contract are guaranteed under a service

contract reimbursement insurance policy. Should the provider fail to pay or provide service

on any claim within 60 days after proof of loss has been filed, the contract holder is entitled

to make a claim directly against the Insurance Company.";

(ii) "This service contract or warranty is subject to limited regulation by the Utah Insurance

Department. To file a complaint, contact the Utah Insurance Department."; and

(iii) A service contract or reimbursement insurance policy may not be issued, sold, or offered for

sale in this state unless the contract contains a statement in substantially the following form,

"Coverage afforded under this contract is not guaranteed by the Property and Casualty

Guaranty Association."

(b) A vehicle protection product warranty may not be issued, sold, or offered for sale in this

state unless the vehicle protection product warranty contains the following statements in

substantially the following form:

(i) "Obligations of the warrantor under this vehicle protection product warranty are guaranteed

under a reimbursement insurance policy. Should the warrantor fail to pay on any claim

within 60 days after proof of loss has been filed, the warranty holder is entitled to make a

claim directly against the Insurance Company.";

(ii) "This vehicle protection product warranty is subject to limited regulation by the Utah

Insurance Department. To file a complaint, contact the Utah Insurance Department."; and

(iii) as applicable:

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(A) "The warrantor under this vehicle protection product warranty will reimburse the warranty

holder as specified in the warranty upon the theft of the vehicle."; or

(B) "The warrantor under this vehicle protection product warranty will reimburse the warranty

holder as specified in the warranty and at the end of the time period specified in the

warranty if, following the theft of the vehicle, the stolen vehicle is not recovered within a

time period specified in the warranty, not to exceed 30 days after the day on which the

vehicle is reported stolen."

sold, or offered for sale in this state unless the warranty contains a statement in substantially

the following form, "Coverage afforded under this warranty is not guaranteed by the Property

and Casualty Guaranty Association."

(3)

(a) A service contract and a vehicle protection product warranty shall:

(i) conspicuously state the name, address, and a toll free claims service telephone number of

the reimbursement insurer;

(ii)

(A) identify the service contract provider, the seller, and the service contract holder; or

(B) identify the warrantor, the seller, and the warranty holder;

(iii) conspicuously state the total purchase price and the terms under which the service contract

or warranty is to be paid;

(iv) conspicuously state the existence of any deductible amount or service fee;

(v) specify the merchandise, service to be provided, and any limitation, exception, or exclusion;

(vi) state a term, restriction, or condition governing the transferability of the service contract or

warranty; and

(vii) state a term, restriction, or condition that governs cancellation of the service contract

as provided in Sections 31A-21-303 through 31A-21-305 by either the contract holder or

service contract provider.

(b) Beginning January 1, 2021, a service contract shall contain a conspicuous statement in

substantially the following form: "Purchase of this product is optional and is not required in

order to finance, lease, or purchase a motor vehicle."

(4) If prior approval of repair work is required under a home protection service contract or a vehicle

service contract, the contract shall conspicuously state the procedure for obtaining prior

approval and for making a claim, including:

(a) a toll free telephone number for claim service; and

(b) a procedure for obtaining reimbursement for emergency repairs performed outside of normal

business hours.

(5) A preexisting condition clause in a service contract shall specifically state which preexisting

condition is excluded from coverage.

(6)

(a) Except as provided in Subsection (6)(c), a service contract shall state the conditions upon

which the use of a nonmanufacturers' part is allowed.

(b) A condition described in Subsection (6)(a) shall comply with applicable state and federal laws.

(i) a home warranty service contract; or

(ii) a service contract that does not impose an obligation to provide parts.

(7) This section applies to a vehicle protection product warranty, except for the requirements

of Subsections (3)(a)(iv) and (vii), (4), (5), and (6). The department may make rules in

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accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement the

application of this section to a vehicle protection product warranty.

(8)

(a) As used in this Subsection (8), "conspicuous statement" means a disclosure that:

(i) appears in all-caps, bold, and 14-point font; and

(ii) provides a space to be initialed by the consumer:

(A) immediately below the printed disclosure; and

(B) at or before the time the consumer purchases the vehicle protection product.

(b) A vehicle protection product warranty shall contain a conspicuous statement in substantially

the following form: "Purchase of this product is optional and is not required in order to finance,

lease, or purchase a motor vehicle."

(9) If a vehicle protection product warranty states that the warrantor will reimburse the warranty

holder for incidental costs, the vehicle protection product warranty shall state how incidental

costs paid under the warranty are calculated.

(10) If a vehicle protection product warranty states that the warrantor will reimburse the warranty

holder in a fixed amount, the vehicle protection product warranty shall state the fixed amount.

Amended by Chapter 198, 2022 General Session

31A-6a-105 Prohibited acts.

(1) Except as provided in Subsection 31A-6a-104(2), a service contract provider or warrantor may

not use in the service contract provider or warrantor's name, a contract, or literature:

(a) any of the following words:

(i) "insurance";

(ii) "casualty";

(iii) "surety";

(iv) "mutual"; or

(v) another word descriptive of the insurance, casualty, or surety business; or

(b) a name deceptively similar to the name or description of:

(i) an insurance or surety corporation; or

(ii) another service contract provider.

(2) A service contract provider, a service contract provider's representative, a warrantor, or a

warrantor's representative may not:

(a) make, permit, or cause to be made a false or misleading statement in connection with the

sale, offer to sell, or advertisement of a service contract or vehicle protection product; or

(b) deliberately omit a material statement that would be considered misleading if omitted, in

connection with the sale, offer to sell, or advertisement of a service contract or vehicle

protection product.

(3) A bank, savings and loan association, insurance company, or other lending institution may not

require the purchase of a service contract as a condition of a loan.

(4) Except for a bank, savings and loan association, industrial bank, or credit union, a service

contract provider may not sell, or be the obligated party for:

(a) a guaranteed asset protection waiver, unless registered with the commissioner under Chapter

6b, Guaranteed Asset Protection Waiver Act;

(b) a debt cancellation agreement, unless licensed by the commissioner; or

(5) A warrantor or the warrantor's representative may not:

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(a) require the purchase of a vehicle protection product as a condition of the financing, lease, or

purchase of a motor vehicle; or

(b) sell a vehicle protection product to a consumer before providing the consumer, for review, a

copy of the vehicle protection product warranty that is filed with the Department of Insurance.

Amended by Chapter 319, 2018 General Session

31A-6a-106 Recordkeeping requirements.

(1)

(a) All service contract providers shall keep accurate accounts, books, and records concerning

transactions regulated under this chapter.

(b) A service contract provider's accounts, books, and records shall include:

(i) copies of all service contracts issued;

(ii) the name and address of each service contract holder; and

(iii) claims files.

at least three years after the specified period of coverage has expired.

(2) A provider discontinuing business in this state shall maintain its records until it furnishes the

commissioner satisfactory proof that it has discharged all obligations to contract holders in this

state.

(3) Service contract providers shall make all accounts, books, and records concerning transactions

regulated under this chapter or other pertinent chapters available to the commissioner for the

purpose of examination as provided in Sections 31A-2-203 and 31A-2-204.

Enacted by Chapter 203, 1992 General Session

31A-6a-107 Cancellation of reimbursement insurance.

The issuer of a reimbursement insurance policy may not cancel the policy until a notice of

cancellation in accordance with Section 31A-21-303, 31A-21-304, or 31A-21-305 has been

mailed or delivered to the commissioner and to each insured provider. The cancellation of a

reimbursement policy may not reduce the issuer's responsibility for service contracts issued by

providers prior to the date of the cancellation.

Amended by Chapter 10, 1997 General Session

31A-6a-108 Obligation of reimbursement insurance issuers.

Providers under this chapter are considered to be the agent of the issuer of the reimbursement

insurance for purposes of Section 31A-23a-410. In cases where a provider is acting as an

administrator and enlists other providers, the provider acting as the administrator shall notify the

issuer of the reimbursement insurance of the other providers.

Amended by Chapter 298, 2003 General Session

31A-6a-109 Enforcement provisions.

(1) If the commissioner finds, as part of an adjudicative proceeding under Title 63G, Chapter 4,

Administrative Procedures Act, that a person has violated any provision of this chapter, the

commissioner may take one or more of the following actions:

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(a) revoke a registration issued under this chapter;

(b) suspend, for a specified period of 12 months or less, a registration issued under this chapter;

(d) assess a forfeiture equal to two times the amount of any profit gained from the violation; or

(e) assess an additional forfeiture not to exceed $1,000 per violation.

(2) If the violations are continuing, or are of a serious nature, or a person's business practices in

connection with the solicitation, sale, offering for sale, or performance under a service contract

subject to this chapter, constitute a danger to the legitimate interests of consumers or the

public, the commissioner may enjoin the person from soliciting, selling, or offering to sell service

contracts in this state either permanently or for a stated period of time.

Amended by Chapter 120, 2024 General Session

31A-6a-110 Rulemaking.

(1) Pursuant to Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commissioner may

make rules necessary to assist in the enforcement of this chapter.

(2) The commissioner may by rule or order, after a hearing, exempt certain service contract

providers or service contract providers for a specific class of service contracts that are

not otherwise exempt under Subsection 31A-1-103(3) from any provision of this title. The

commissioner may order substitute requirements on a finding that a particular provision of

this title is not necessary for the protection of the public or that the substitute requirement is

reasonably certain to provide equivalent protection to the public.

Amended by Chapter 382, 2008 General Session

31A-6a-111 Vehicle protection product warranty requirements.

(1) A warrantor shall make a reimbursement promised under a vehicle protection product warranty

as specified in the warranty, regardless of, and not contingent upon, the payment of a benefit

provided for under the warranty holder's primary vehicle insurance or any other contract.

(2)

(a) If a vehicle protection product is represented as preventing the theft of a vehicle, the vehicle

protection product warranty shall, at a minimum, provide for reimbursement of damage a theft

causes to the motor vehicle up to $5,000, if the vehicle is recovered within the time period

specified in the warranty following the theft of the vehicle, not to exceed 30 days after the day

on which the vehicle is reported stolen.

(b) If a vehicle protection product is represented as aiding in the recovery of a stolen vehicle,

the vehicle protection product warranty shall provide for reimbursement of the vehicle up to

$5,000, if the vehicle is not recovered within the time period specified in the warranty following

the theft of the vehicle, not to exceed 30 days after the day on which the vehicle is reported

stolen.

Repealed and Re-enacted by Chapter 319, 2018 General Session

Chapter 6b

Guaranteed Asset Protection Waiver Act

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Part 1

General Provisions

31A-6b-101 Title.

This chapter is known as the "Guaranteed Asset Protection Waiver Act."

Enacted by Chapter 274, 2010 General Session

31A-6b-102 Definitions.

(1) This section defines a term only for purposes of this chapter. A term defined in this section is

not required to be used in a guaranteed asset protection waiver.

(2) For purposes of this chapter:

(a) "Administrative functions" includes providing:

(i) document development, processing, and management;

(ii) data processing and support;

(iii) compliance services;

(iv) waiver fee processing;

(v) benefit determination;

(vi) technology support; or

(vii) personnel support.

(b) "Administrator" means a person who provides administrative functions related to a

guaranteed asset protection waiver.

(i) a debtor;

(ii) a retail buyer; or

(iii) a lessee.

(d) "Creditor" means a person who is:

(i) a lender in a loan or credit transaction;

(ii) a retail seller of a vehicle that provides credit to a retail buyer of the vehicle;

(iii) a lessor in a lease transaction;

(iv) a seller in a commercial retail installment transaction; or

(v) an assignee of a person listed in this Subsection (2)(d) to whom a credit obligation is

payable.

(e) "Finance agreement" means one or more of the following for the purchase or lease of a

vehicle:

(i) a loan;

(ii) a retail installment sales contract; or

(iii) a lease.

(f) "Guaranteed asset protection waiver" means a contract for a separate charge:

(i) under which a creditor agrees to waive all or part of the amounts due on a borrower's finance

agreement if a vehicle is subject to:

(A) a total physical damage loss; or

(B) unrecovered theft; and

(ii) that is made part of a finance agreement, even if the guaranteed asset protection waiver is

stated in a separate addendum to the finance agreement.

(g) "Preliminary period" means a time period that:

(i) begins the day on which a guaranteed asset protection waiver becomes effective; and

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(ii) ends the last day on which a borrower may cancel the guaranteed asset protection waiver

with a full refund if no benefits have been provided.

(h) "Restricted account" means the Guaranteed Asset Protection Waiver Restricted Account

created in Section 31A-6b-204.

(i)

(i) "Vehicle" means a vehicle that is:

(A) self propelled or towed; and

(B) designed for personal or commercial use.

(ii) "Vehicle" includes:

(A) an automobile;

(B) a truck;

(D) a recreational vehicle;

(E) an all terrain vehicle;

(F) a snowmobile;

(G) a camper;

(H) a boat;

(I) a personal watercraft; or

(J) a trailer for a motorcycle, boat, camper, or personal watercraft.

Enacted by Chapter 274, 2010 General Session

31A-6b-103 Relationship to title -- Scope -- Exemptions.

(1) A guaranteed asset protection waiver:

(a) is not an insurance contract; and

(b) is not considered a debt cancellation or debt suspension contract for purposes of Section

31A-21-109.

(2) A guaranteed asset protection waiver is exempt from the provisions of this title other than this

chapter, except to the extent otherwise provided in this chapter.

(3) This chapter does not apply to:

(a) an insurance contract offered by an insurer under this title; or

(b) a debt cancellation or debt suspension contract that:

(i) is not a guaranteed asset protection waiver; and

(ii) is offered in compliance with:

(A) 12 C.F.R. Part 37;

(B) 12 C.F.R. Part 721;

(D) Section 31A-21-109.

(4) A person required to be licensed or registered in accordance with this chapter may not be

required to be licensed under another provision of this title for engaging in an act regulated by

this chapter.

(5) A guaranteed asset protection waiver offered in connection with a loan, lease, or retail

installment sale associated with a commercial vehicle transaction is not subject to this title.

(6) The following are exempt from this chapter:

(a) a bank, as defined in Section 7-1-103;

(b) a credit union, as defined in Section 7-1-103;

(d) a savings and loan association, as defined in Section 7-1-103; or

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(e) a subsidiary of an entity described in Subsections (6)(a) through (d).

Enacted by Chapter 274, 2010 General Session

31A-6b-104 Severability.

If a provision of this chapter or the application of a provision to a person or circumstance is

held invalid, the remainder of this chapter shall be given effect without the invalid provision or

application. The provisions of this chapter are severable.

Enacted by Chapter 274, 2010 General Session

Part 2

Waiver Provider Licensing and Registration

31A-6b-201 Persons who may provide a guaranteed asset protection waiver -- Requirement

to be licensed or registered.

(1) Except as provided in Subsection (2), on and after July 1, 2010, a person may not sell, offer

to sell, or otherwise provide a guaranteed asset protection waiver to a borrower in this state

unless the person:

(a)

(i) is:

(A) a creditor; or

(B) an administrator; and

(ii) is registered in accordance with this part; or

(b)

(i) is an individual who sells vehicles at retail; and

(ii) holds a limited line producer license in accordance with Section 31A-23a-103.

(2)

(a) Subject to the other provisions of this Subsection (2), an entity retail seller of a vehicle may

sell, offer to sell, or otherwise provide a guaranteed asset protection waiver to a borrower

without being registered under this chapter if the retail seller assigns finance agreements

within 90 days.

(b) The commissioner may assess each retail seller described in Subsection (2)(a) that is located

in this state an annual assessment in accordance with this Subsection (2).

received by the commissioner under Section 31A-6b-202 do not equal or exceed $100,000.

(d) The commissioner shall determine the amount of the annual assessment under this section in

accordance with Section 31A-3-103, except that:

(i) the annual assessment may not exceed $50; and

(ii) the commissioner may not impose an amount that would reasonably be expected to result in

the commissioner receiving in excess of $100,000 in a fiscal year from the aggregate of:

(A) the fees received under Section 31A-6b-202; and

(B) the annual assessments under this section.

(e) The commissioner shall deposit an annual assessment collected under this section into the

restricted account.

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Enacted by Chapter 274, 2010 General Session

31A-6b-202 Registration process -- Annual fee.

(1) If a person is required to register under Section 31A-6b-201, to register the person shall submit

to the commissioner:

(a) an application for registration;

(b) a copy of any guaranteed asset protection waiver that the person will issue, market, sell, offer

to sell, or otherwise provide in this state; and

except that the registration fee may not exceed $1,000.

(2)

(a) On and after July 1, 2011, a person registered under this title shall pay to the commissioner

an annual fee:

(i) by no later than July 1 of each year after the day on which the person registers; and

(ii) established by the commissioner in accordance with Section 31A-3-103, except that the

annual fee may not exceed $1,000.

(b) If a person fails to pay the annual fee required under this Subsection (2) by October 1, the

person's registration expires.

(3) The commissioner shall deposit a fee collected under this section into the restricted account.

Enacted by Chapter 274, 2010 General Session

31A-6b-203 Filing new or changed guaranteed asset protection waiver.

A person required to be registered under Section 31A-6b-201 shall submit to the commissioner

at least 30 days before the day on which the person issues, markets, sells, offers to sell, or

otherwise provides a guaranteed asset protection waiver in this state:

(1) a change to a term of a guaranteed asset protection waiver previously submitted to the

commissioner under this chapter; or

(2) a guaranteed asset protection waiver that has not previously been submitted to the

commissioner under this chapter.

Enacted by Chapter 274, 2010 General Session

31A-6b-204 Guaranteed Asset Protection Waiver Restricted Account.

(1) There is created in the General Fund a restricted account known as the "Guaranteed Asset

Protection Waiver Restricted Account."

(2) The restricted account shall consist of the money received by the commissioner under this part.

(3) The commissioner shall administer the restricted account. Subject to appropriations by the

Legislature, the commissioner shall use the money deposited into the restricted account to pay

for a cost or expense incurred by the commissioner in the administration, investigation, and

enforcement of this chapter.

Enacted by Chapter 274, 2010 General Session

Part 3

Requirements for a Guaranteed Asset Protection Waiver

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31A-6b-301 General requirements for a guaranteed asset protection waiver.

(1) A person may not issue, market, sell, offer to sell, or otherwise provide a guaranteed asset

protection waiver except in compliance with this chapter.

(2) If a creditor assigns, sells, or transfers a finance agreement, a guaranteed asset protection

waiver remains a part of the finance agreement.

(3)

(a) If a borrower finances or otherwise pays the charge for a guaranteed asset protection waiver,

the creditor is liable to the borrower for a benefit due under the guaranteed asset protection

waiver regardless of whether the retail seller, administrator, or other person who receives the

payment from the borrower remits the charge.

(b) This Subsection (3) may not be construed to prejudice any claim a creditor may have against

a retail seller, administrator, or other person who receives a payment from a borrower but fails

to remit the payment.

(4) A creditor may require that a guaranteed asset protection waiver that the creditor issues be sold

for:

(a) a single payment; or

(b) periodic payments.

(5) The following may not be conditioned on a borrower purchasing a guaranteed asset protection

waiver:

(a) the extension of credit;

(b) a term of credit; or

Enacted by Chapter 274, 2010 General Session

31A-6b-302 Required disclosures.

(1) A guaranteed asset protection waiver shall disclose the information described in Subsection (2):

(a) in writing; and

(b) in understandable language that is easy to read.

(2) A guaranteed asset protection waiver shall disclose:

(a) the name and address of the initial creditor and the borrower at the time the guaranteed asset

protection waiver is executed;

(b) if there is an administrator for the guaranteed asset protection waiver:

(i) the name of the administrator;

(ii) the address of the administrator; and

(iii) a toll-free number to contact the administrator;

(d) the terms of the guaranteed asset protection waiver, including:

(i) the requirements for receiving the protection of the guaranteed asset protection waiver;

(ii) the conditions imposed by the guaranteed asset protection waiver; and

(iii) the exclusions from the protection of the guaranteed asset protection waiver;

(e) the procedure the borrower must follow, if any, to obtain a benefit under the guaranteed asset

protection waiver, including a telephone number and address where the borrower may apply

for a benefit under the guaranteed asset protection waiver;

(f) that the borrower may cancel the guaranteed asset protection waiver;

(g) the rights the borrower has to a refund under Section 31A-6b-303;

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(h) if the guaranteed asset protection waiver is cancelled or terminated after the preliminary

period:

(i) the procedures for requesting a refund under Section 31A-6b-303, including that the

borrower request a refund in writing in accordance with Section 31A-6b-303; and

(ii) the methodology for calculating the refund due, if any;

(i) that none of the following may be conditioned on the purchase of a guaranteed asset

protection waiver:

(i) the extension of credit;

(ii) a term of credit; or

(iii) a term of the related vehicle sale or lease; and

(j)

(i) that a guaranteed asset protection waiver is subject to limited regulation by the

commissioner; and

(ii) that a complaint regarding a guaranteed asset protection waiver may be submitted to the

commissioner.

Enacted by Chapter 274, 2010 General Session

31A-6b-303 Cancellation or termination of a guaranteed asset protection waiver.

(1)

(a) A borrower may cancel a guaranteed asset protection waiver in accordance with this section.

(b) A borrower may not waive by contract the borrower's right to cancel a guaranteed asset

protection waiver in accordance with this section.

agreement terminates.

(2)

(a) A guaranteed asset protection waiver shall provide for a preliminary period of at least 30

days.

(b) If a borrower cancels a guaranteed asset protection waiver or if a guaranteed asset protection

waiver terminates within the preliminary period, the borrower is entitled to a refund of the

charge for the guaranteed asset protection waiver as follows:

(i) if benefits have not been provided, a full refund; or

(ii) if benefits have been provided, a refund to the extent provided for in the guaranteed asset

protection waiver.

(3)

(a) If a guaranteed asset protection waiver is cancelled by the borrower or terminates after the

preliminary period, to obtain a refund of any portion of the charge for the guaranteed asset

protection waiver, the borrower shall request the refund:

(i) in a writing provided to:

(A) the creditor;

(B) an administrator; or

(ii) within 90 days of the day on which an event occurs that terminates the finance agreement if

the refund is sought on the basis of termination of a finance agreement; and

(iii) in accordance with any additional terms in the guaranteed asset protection waiver.

(b) If a guaranteed asset protection waiver is cancelled by the borrower or terminates after the

preliminary period, but before the term of the finance agreement ends, a borrower is entitled

to a refund:

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(i) of the portion of the charge for the guaranteed asset protection waiver that under the terms

of the guaranteed asset protection waiver is considered unearned; and

(ii) subject to any other terms of the guaranteed asset protection waiver.

(4)

(a) If the cancellation of a guaranteed asset protection waiver occurs as a result of any of

the following, a refund may be paid directly to the creditor or administrator and applied as

provided in Subsection (4)(b):

(i) a default under the finance agreement;

(ii) the repossession of the vehicle associated with the finance agreement; or

(iii) any other type of termination of the finance agreement or guaranteed asset protection

waiver.

(b) A creditor may apply a refund described in this Subsection (4) to reduce the amount owed

under a finance agreement, unless the borrower can show that the finance agreement is paid

in full.

Enacted by Chapter 274, 2010 General Session

Part 4

Enforcement

31A-6b-401 Cease and desist order -- Fines.

(1) In accordance with Title 63G, Chapter 4, Administrative Procedures Act, the commissioner

may:

(a) order a person who violates this chapter to cease and desist from an act that violates this

chapter;

(b) impose a penalty:

(i) up to $500 per violation; and

(ii) not to exceed the aggregate of $40,000 in a calendar year for the violations under this

chapter of a similar nature; or

(2) For purposes of this section, a violation is of a similar nature if the violation consists of the

same or similar action, course of conduct, or practice, irrespective of the number of times the

action, conduct, or practice occurs that is determined to violate this chapter.

Enacted by Chapter 274, 2010 General Session

Chapter 7

Nonprofit Health Service Insurance Corporations

Part 1

General Provisions

31A-7-101 Definition.

As used in this chapter, unless stated otherwise:

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"Subscriber" means the person entitled by contract to health care benefits from a corporation

licensed under this chapter. "Subscriber" is used interchangeably with "policyholder" in individual

contracts or "certificate holder" in group contracts.

Amended by Chapter 91, 1987 General Session

Amended by Chapter 95, 1987 General Session

31A-7-102 Scope.

(1) Domestic insurers authorized under former Title 31, Chapter 37, are, on July 1, 1986,

automatically converted to domestic insurers authorized under this chapter. The commissioner

may adopt any rules necessary to efficiently and safely effect the conversion.

(2) Any nonprofit corporation incorporated under this chapter, or subject to this chapter under

Subsection (1), and organized for the purpose of establishing, maintaining, and operating a

nonprofit plan, whereby hospital care, medical-surgical care, dental care, and other health

services are made available to persons who become subscribers to such a plan or plans under

a contract with the nonprofit corporation, are subject to the provisions of this chapter.

(3) This chapter does not apply to persons licensed under:

(a) Chapter 5, Domestic Stock and Mutual Insurance Corporations;

(b) Chapter 8, Health Maintenance Organizations and Limited Health Plans;

(d) Chapter 10, Annuities;

(e) Chapter 11, Motor Clubs; or

(f) Chapter 14, Foreign Insurers.

Amended by Chapter 20, 1995 General Session

31A-7-103 Applicability of other provisions.

(1) Except for exemptions specifically granted under this title, nonprofit health service insurance

corporations organized or operating under this chapter are subject to all of the provisions of this

title.

(2) Nonprofit health service corporations are exempt from the provisions of Chapter 5, Domestic

Stock and Mutual Insurance Corporations, except where sections or parts are specifically

referenced and made applicable in this chapter, in which case the referenced provisions

under Chapter 5, Domestic Stock and Mutual Insurance Corporations, that apply to mutual

corporations apply to nonprofit health service insurance corporations.

(3) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, and Title 16, Chapter 10a,

Utah Revised Business Corporation Act, do not apply to nonprofit health service insurance

corporations except as specifically made applicable by:

(a) this chapter;

(b) a provision adopted by reference under this chapter; or

service insurance corporations which are not settled under this chapter.

(4) Any insurer authorized under this chapter that is not in compliance with the applicable capital

and surplus requirements, yet has assets in excess of its liabilities, has until July 1, 1988,

to comply with the applicable capital and surplus requirements. One-half of any shortage in

capital and surplus on July 1, 1986, shall be remedied by July 1, 1987.

Amended by Chapter 300, 2000 General Session

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31A-7-104 General corporate powers and procedures.

(1) Corporations organized or operating under this chapter have the powers specified under

Section 31A-5-104.

(2) Subject to the limitations upon subsidiary investment valuation otherwise stated under this title,

corporations organized or operating under this chapter may invest in corporations organized for

profit.

(3) Corporations subject to the provisions of this chapter may enter into contracts for the rendering

of hospital services, medical-surgical services, and other health services on behalf of any of

their subscribers with hospitals maintained by the state, or by any of its political subdivisions,

or maintained by a nonprofit corporation organized for hospital purposes, or with other

corporations, associations, partnerships, or individuals furnishing hospital services, medical-

surgical services, or other health services. This chapter does not require any corporation to

contract or remain under contract with any individual, hospital, physician, or other provider of

health services.

Amended by Chapter 91, 1987 General Session

31A-7-105 Documents as evidence.

Section 31A-5-105 applies to documents as evidence in corporations organized and operating

under this chapter.

Enacted by Chapter 242, 1985 General Session

31A-7-106 Unauthorized assumption of corporate power.

Section 31A-5-106 applies to the unauthorized assumption of corporate power in corporations

organized and operating under this chapter.

Enacted by Chapter 242, 1985 General Session

Part 2

Organization

31A-7-201 Organization, incorporation, and licensing.

Chapter 5, Part 2, Organization of Corporations, governs the organization, incorporation, and

licensing of nonprofit health service corporations with the following exceptions:

(1) Section 16-6a-201 applies in place of Section 31A-5-202.

(2) Sections 16-6a-401 and 31A-1-109 apply in place of Subsection 31A-5-203(2)(a).

(3) The last sentence of Subsection 31A-5-203(2)(e) does not apply.

Amended by Chapter 90, 2004 General Session

31A-7-202 Members.

Sections 16-6a-601 and 16-6a-602 apply to members of corporations organized or operating

under this chapter. Sections 16-6a-701, 16-6a-702, 16-6a-704, 16-6a-711, and 16-6a-712 apply to

corporations organized or operating under this chapter which have members.

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Amended by Chapter 300, 2000 General Session

Part 3

Management

31A-7-301 Principal office and registered agent.

Section 31A-5-401 governs the location of the principal office and existence of a registered

agent for corporations organized and operating under this chapter.

Amended by Chapter 204, 1986 General Session

31A-7-302 Annual report to policyholders.

Every insurer organized or operating under this chapter shall send to each policyholder or

electronically post on the insurer's public website an abbreviated annual report which contains

basic financial and operating data, and information about important business and corporate

developments.

Amended by Chapter 253, 2012 General Session

31A-7-303 Board of directors.

(1) Subject to other provisions under this section, Sections 16-6a-801 through 16-6a-805, and

Sections 16-6a-810, 16-6a-812, 16-6a-814, 16-6a-815, and 16-6a-816 apply to the board of

directors of insurers organized or operating under this chapter.

(2) The property and lawful business of every corporation subject to this chapter shall be held

and managed by a governing board of trustees or directors with the powers and authority as

is necessary or incidental to the complete execution of the purposes of each corporation as

limited by its articles of incorporation and bylaws. A board may not consist of less than five

members. A majority of the directors shall be residents of Utah.

(3) Any person employed by or receiving more than 10% of his income from a corporation licensed

under this chapter, and any person related to that person within the second degree by blood

or marriage, is an "insider." Insiders may not constitute a majority of the board of a corporation

organized and operating under this chapter.

(4) The board shall manage the business and affairs of the corporation and may not delegate its

power or responsibility to do so, except to the extent authorized by Section 31A-7-307.

(5) Section 16-6a-814 applies to the place and notice of directors' meetings.

(6) Any director may be removed from office for cause by an affirmative vote of a majority of the full

board at a meeting of the board called for that purpose.

Amended by Chapter 300, 2000 General Session

31A-7-304 Waiver and consent.

Sections 16-6a-813 and 16-6a-815 apply to waiver and consent in corporations organized or

operating under this chapter.

Amended by Chapter 300, 2000 General Session

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31A-7-305 Supervision of management changes.

Subsections 31A-5-410(1)(a) and 31A-5-410(3) apply to supervision and management changes

in corporations organized and operating under this chapter. If a trustee is removed from the board

of trustees in the manner specified under Subsection 31A-7-303(6), the action shall be reported to

the commissioner within 10 days of the removal.

Amended by Chapter 91, 1987 General Session

31A-7-306 Continuity of management in emergencies.

Section 31A-5-411 applies to continuity of management in emergencies in corporations

organized and operating under this chapter.

Enacted by Chapter 242, 1985 General Session

31A-7-307 Committees of directors.

(1) If provided by the articles or bylaws of a corporation, the board of directors may, by a resolution

adopted by a majority of the full board, designate one or more committees, each consisting of

three or more directors, to serve at the pleasure of the board. The board may designate one or

more directors as alternate members of any committee to substitute for any absent member at

any meeting of the committee. The designation of a committee and delegation of authority to it

does not relieve the board or any director of responsibility imposed upon it or him by law.

(2)

(a) Corporations organized and operating under this chapter shall have an audit committee and a

nominating committee.

(b) A majority of the members of the audit and nominating committees may not be insiders as

defined under Subsection 31A-7-303(3).

(3) When the board is not in session, a committee may exercise the powers of the board in the

management of the business and affairs of the corporation to the extent authorized in the

resolution or in the articles or bylaws, except final action regarding:

(a) compensation or indemnification of any person who is a director, principal officer, or one of

the three most highly paid employees, and any benefits or payments requiring shareholder or

policyholder approval;

(b) approval of any contract required to be approved by the board under Section 31A-7-309 or of

any other transaction in which a director has a material interest adverse to the corporation;

(d) corporate reorganization under Part 4, Reorganization;

(e) any other decision requiring shareholder or policyholder approval;

(f) amendment or repeal of any action previously taken by the full board which by its terms is not

subject to amendment or repeal by a committee;

(g) dividends or other distributions to shareholders or policyholders, other than in the routine

implementation of policy determinations of the full board;

(h) selection of principal officers; and

(i) filling vacancies on the board or any committee created under Subsection (1) except that the

articles or bylaws may provide for temporary appointments to fill vacancies on the board or

any committee, the appointments to last no longer than the end of the next board meeting.

(4) Subsection 31A-5-412(4) applies to the subsequent review provided in corporations organized

and operating under this chapter.

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Amended by Chapter 90, 2004 General Session

31A-7-308 Interlocking directorates and other relationships.

Section 31A-5-413 applies to interlocking directorates and other relationships in corporations

organized and operating under this chapter.

Enacted by Chapter 242, 1985 General Session

31A-7-309 Transactions in which directors and others are interested.

Section 31A-5-414 applies to corporations organized and operating under this chapter, except

that, for purposes of this chapter, Section 31A-5-414 does not preclude standard contracts for the

provision of health care services with directors who are also providers of health care services.

Enacted by Chapter 242, 1985 General Session

31A-7-310 Officers', directors', and employees' liability and indemnification.

Section 31A-5-415 applies to officers', directors', and employees' liability and indemnification in

corporations organized and operating under this chapter.

Enacted by Chapter 242, 1985 General Session

31A-7-311 Executive compensation.

Subsections 31A-5-416(4), (5), (6), and (7) apply to executive compensation in corporations

organized and operating under this chapter.

Amended by Chapter 316, 1994 General Session

31A-7-312 Exclusive management and exclusive agency contracts.

Section 31A-5-417 applies to exclusive management and exclusive agency contracts in

corporations organized and operating under this chapter, except that in this chapter, Subsection

31A-5-417(2) does not preclude exclusive agency contracts with controlled subsidiaries of the

insurer organized and operating under this chapter.

Enacted by Chapter 242, 1985 General Session

31A-7-313 Books and records.

Section 16-6a-1602 applies to the books and records of corporations organized and operating

under this chapter.

Amended by Chapter 300, 2000 General Session

Part 4

Reorganization

31A-7-401 Mergers and consolidations.

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Sections 31A-5-501 and 31A-5-503 apply to mergers and consolidations of corporations

organized and operating under this chapter.

Enacted by Chapter 242, 1985 General Session

31A-7-402 Voluntary dissolution.

Section 31A-5-504 applies to the voluntary dissolution of corporations organized and operating

under this chapter.

Enacted by Chapter 242, 1985 General Session

31A-7-403 Conversion to a Title 31A, Chapter 5, mutual insurer.

(1) An insurer organized and operating under this chapter may be converted into a mutual insurer

under Chapter 5, Domestic Stock and Mutual Insurance Corporations, as provided in this

section.

(2)

(a) The board shall pass a resolution that the conversion is not contrary to the interests of the

policyholders specifying the reasons for and the purposes of the proposed conversion,

and the manner in which the conversion is expected to affect policyholders, particularly the

policyholders that are members.

(b) The board's resolution shall also set forth a plan of conversion which shall include:

(i) the articles of incorporation of the new Chapter 5, Domestic Stock and Mutual Insurance

Corporations, mutual insurer, including a description of the classes of policyholders who, by

virtue of being policyholders, will have an interest in the converted insurer;

(ii) the bylaws of the new Chapter 5, Domestic Stock and Mutual Insurance Corporations,

mutual insurer;

(iii) a description of any changes in the insurer's mode of operations after conversion to a

Chapter 5, Domestic Stock and Mutual Insurance Corporations, mutual insurer; and

(iv) any other items specified by rule.

(3) The provisions of Chapter 16, Insurance Holding Companies, apply to the conversion of a

Chapter 7, Nonprofit Health Service Insurance Corporations, insurer to a Chapter 5, Domestic

Stock and Mutual Insurance Corporations, mutual insurance corporation.

(4) The plan of conversion shall be submitted to the commissioner for approval, together with a

projection of the planned or anticipated financial condition of the insurer for two years after the

conversion.

(5) The commissioner shall hold an adjudicative proceeding concerning the conversion application.

(6) The commissioner shall approve the plan of conversion, unless he finds that the plan violates

the law, is contrary to the interests of policyholders or the public, or would result in an unfair

distribution of interest among the insurer's policyholders.

(7)

(a) Upon the commissioner approving the conversion under Subsection (6), the commissioner

shall issue a new certificate of authority.

(b) The issuance of the certificate is the conversion, and upon issuance of the certificate the

Chapter 7, Nonprofit Health Service Insurance Corporations, insurer at once becomes a

mutual insurance corporation organized under and fully subject to Chapter 5, Domestic Stock

and Mutual Insurance Corporations.

Nonprofit Health Service Insurance Corporations, insurer was organized.

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(d) Unless otherwise provided in the plan of conversion, the directors, officers, agents, and

employees of the Chapter 7, Nonprofit Health Service Insurance Corporations, insurer shall

continue in like capacity with the mutual insurance corporation.

Amended by Chapter 161, 1987 General Session

31A-7-404 Transfer of business or assets.

Section 31A-5-508 applies to the transfer of business or assets of corporations organized and

operating under this chapter.

Enacted by Chapter 242, 1985 General Session

Part 5

Miscellaneous Provisions

31A-7-501 Duties of officers, directors, agents, and employees.

Section 31A-5-601 applies to the duties of officers, directors, agents, and employees of

corporations organized and operating under this chapter.

Enacted by Chapter 242, 1985 General Session

31A-7-502 Doing business in other states.

Section 31A-5-602 applies to corporations organized and operating under this chapter doing

business in other states.

Enacted by Chapter 242, 1985 General Session

Chapter 8

Health Maintenance Organizations and Limited Health Plans

Part 1

General Provisions

31A-8-101 Definitions.

For purposes of this chapter:

(1) "Basic health care services" means:

(a) emergency care;

(b) inpatient hospital and physician care;

(d) out-of-area coverage.

(2) "Health maintenance organization" means any person:

(a) other than:

(i) an insurer licensed under Chapter 7, Nonprofit Health Service Insurance Corporations; or

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(ii) an individual who contracts to render professional or personal services that the individual

directly performs; and

(b) that:

(i) furnishes at a minimum, either directly or through arrangements with others, basic health

care services to an enrollee in return for prepaid periodic payments agreed to in amount

prior to the time during which the health care may be furnished; and

(ii) is obligated to the enrollee to arrange for or to directly provide available and accessible

health care.

(3)

(a) "Limited health plan" means, except as limited under Subsection (3)(b), a person who

furnishes dental or vision services, either directly or through arrangements with others:

(i) to an enrollee;

(ii) in return for prepaid periodic payments agreed to in amount prior to the time during which

the services may be furnished; and

(iii) for which the person is obligated to the enrollee to arrange for or directly provide the

available and accessible services described in this Subsection (3)(a).

(b) "Limited health plan" does not include:

(i) a health maintenance organization;

(ii) an insurer licensed under Chapter 7, Nonprofit Health Service Insurance Corporations; or

(iii) an individual who contracts to render professional or personal services that the individual

performs.

(4)

(a) "Nonprofit organization" or "nonprofit corporation" means an organization no part of

the income of which is distributable to its members, trustees, or officers, or a nonprofit

cooperative association, except in a manner allowed under Section 31A-8-406.

(b) "Nonprofit health maintenance organization" and "nonprofit limited health plan" are used when

referring specifically to one of the types of organizations with "nonprofit" status.

(5) "Organization" means a health maintenance organization and limited health plan, unless used

in the context of:

(a) "organization expenses," which is described in Section 31A-8-208.

(b) "organization permit," which is described in Sections 31A-8-204 and 31A-8-206; or

(6) "Uncovered expenditures" means the costs of health care services that are covered by an

organization for which an enrollee is liable in the event of the organization's insolvency.

(7) "Unusual or infrequently used health services" means those health services that are projected

to involve fewer than 10% of the organization's enrollees' encounters with providers, measured

on an annual basis over the organization's entire enrollment.

Amended by Chapter 292, 2017 General Session

31A-8-102 Scope and purposes.

(1) No person may operate an organization in this state without complying with and obtaining a

certificate of authority under this chapter.

(2) The purposes of this chapter include to:

(a) provide for the establishment of health maintenance organizations which provide readily

available, accessible, and quality comprehensive health care to their enrollees;

(b) provide for the establishment of limited health plans which provide readily available,

accessible, and quality care to their enrollees;

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and

(d) assure that organizations offering health plans within this state are financially and

administratively sound and that these organizations are in fact able to deliver the benefits as

promised.

Enacted by Chapter 204, 1986 General Session

31A-8-103 Applicability to other provisions of law.

(1)

(a) Except for exemptions specifically granted under this title, an organization is subject to

regulation under all of the provisions of this title.

(b) Notwithstanding any provision of this title, an organization licensed under this chapter:

(i) is wholly exempt from:

(A) Chapter 7, Nonprofit Health Service Insurance Corporations;

(B) Chapter 9, Insurance Fraternals;

(D) Chapter 11, Motor Clubs;

(E) Chapter 12, State Risk Management Fund; and

(F) Chapter 19a, Utah Rate Regulation Act; and

(ii) is not subject to:

(A) Chapter 3, Department Funding, Fees, and Taxes, except for Part 1, Funding the

Insurance Department;

(B) Section 31A-4-107;

specifically made applicable by this chapter;

(D) Chapter 14, Foreign Insurers, except for provisions specifically made applicable by this

chapter;

(E) Chapter 17, Determination of Financial Condition, except:

(I) Part 2, Qualified Assets, and Part 6, Risk-Based Capital; or

(II) as made applicable by the commissioner by rule consistent with this chapter;

(F) Chapter 18, Investments, except as made applicable by the commissioner by rule

consistent with this chapter; and

(G) Chapter 22, Contracts in Specific Lines, except for Part 6, Accident and Health Insurance,

Part 7, Group Accident and Health Insurance, and Part 12, Reinsurance.

(2) The commissioner may by rule waive other specific provisions of this title that the commissioner

considers inapplicable to limited health plans, upon a finding that the waiver will not endanger

the interests of:

(a) enrollees;

(b) investors; or

(3) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, and Title 16, Chapter 10a, Utah

Revised Business Corporation Act, do not apply to an organization except as specifically made

applicable by:

(a) this chapter;

(b) a provision referenced under this chapter; or

organizations that are not settled under this chapter.

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(4)

(a) Whenever in this chapter, Chapter 5, Domestic Stock and Mutual Insurance Corporations, or

Chapter 14, Foreign Insurers, is made applicable to an organization, the application is:

(i) of those provisions that apply to a mutual corporation if the organization is nonprofit; and

(ii) of those that apply to a stock corporation if the organization is for profit.

(b) When Chapter 5, Domestic Stock and Mutual Insurance Corporations, or Chapter 14, Foreign

Insurers, is made applicable to an organization under this chapter, "mutual" means nonprofit

organization.

(5) Solicitation of enrollees by an organization is not a violation of any provision of law relating to

solicitation or advertising by health professionals if that solicitation is made in accordance with:

(a) this chapter; and

(b) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance

Intermediaries.

(6) This title does not prohibit any health maintenance organization from meeting the requirements

of any federal law that enables the health maintenance organization to:

(a) receive federal funds; or

(b) obtain or maintain federal qualification status.

(7) Except as provided in Chapter 45, Managed Care Organizations, an organization is exempt

from statutes in this title or department rules that restrict or limit the organization's freedom of

choice in contracting with or selecting health care providers, including Section 31A-22-618.

(8) An organization is exempt from the assessment or payment of premium taxes imposed by

Sections 59-9-101 through 59-9-104.

Amended by Chapter 391, 2018 General Session

31A-8-104 Determination of ability to provide services.

(1) The commissioner may not issue a certificate of authority to an applicant for a certificate of

authority under this chapter unless the applicant demonstrates to the commissioner that the

applicant has:

(a) the willingness and potential ability to furnish the proposed health care services in a manner

to assure both availability and accessibility of adequate personnel and facilities and continuity

of service; and

(b) arrangements for an ongoing quality of health care assurance program concerning health

care processes and outcomes.

(2)

(a) In accordance with Sections 31A-2-203 and 31A-2-204, the commissioner may order

an independent audit or examination by one or more technical experts to determine an

applicant's ability to provide the proposed health care services as described in Subsection (1).

(b) In accordance with Section 31A-2-205, an applicant shall reimburse the commissioner for the

reasonable cost of an independent audit or examination.

(3) Licensing under this chapter does not exempt an organization from any licensing requirement

applicable under Title 26B, Chapter 2, Part 2, Health Care Facility Licensing and Inspection.

Amended by Chapter 327, 2023 General Session

31A-8-105 General powers of organizations.

Organizations may:

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(1) buy, sell, lease, encumber, construct, renovate, operate, or maintain hospitals, health care

clinics, other health care facilities, and other real and personal property incidental to and

reasonably necessary for the transaction of the business and for the accomplishment of the

purposes of the organization;

(2) furnish health care through providers which are under contract with the organization;

(3) contract with insurance companies licensed in this state or with health service corporations

authorized to do business in this state for insurance, indemnity, or reimbursement for the cost

of health care furnished by the organization;

(4) offer to its enrollees, in addition to health care, insured indemnity benefits, but only for

emergency care, out-of-area coverage, unusual or infrequently used health services as defined

in Section 31A-8-101, and adoption benefits as provided in Section 31A-22-610.1;

(5) receive from governmental or private agencies payments covering all or part of the cost of the

health care furnished by the organization;

(6) lend money to a medical group under contract with it or with a corporation under its control to

acquire or construct health care facilities or for other uses to further its program of providing

health care services to its enrollees;

(7) be owned jointly by health care professionals and persons not professionally licensed without

violating Utah law; and

(8) do all other things necessary for the accomplishment of the purposes of the organization.

Amended by Chapter 329, 1998 General Session

31A-8-105.5 Primary care physicians.

With regard to participating providers who are physicians who are members of the American

College of Obstetrics and Gynecology, organizations operating under this chapter shall:

(1) permit a female enrollee to receive at least one outpatient examination per year from the

enrollee's choice of one of those participating providers. An organization may not require the

enrollee to receive a preapproval, preauthorization, or referral from the enrollee's primary care

physician before receiving this examination; and

(2) clearly state in the organization's health benefit plan literature that enrollees may seek the care

described in Subsection (1) without preapproval, preauthorization, or referral from the patient's

primary care physician.

Amended by Chapter 10, 1997 General Session

31A-8-106 Other business.

No organization may engage, directly or indirectly, in any business other than that of an

organization and business reasonably incidental to that business.

Enacted by Chapter 204, 1986 General Session

31A-8-107 Documents as evidence.

Section 31A-5-105 applies to documents as evidence in organizations.

Enacted by Chapter 204, 1986 General Session

31A-8-108 Unauthorized assumption of corporate power.

Section 31A-5-106 applies to the unauthorized assumption of corporate power in organizations.

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Enacted by Chapter 204, 1986 General Session

Part 2

Domestic Organizations

31A-8-201 Scope of part.

This part applies to all organizations doing business in this state.

Amended by Chapter 123, 2005 General Session

31A-8-202 Corporate name -- Office -- Registered agent.

(1) Sections 16-10a-402, 16-10a-403, and 42-2-5 apply to the reservation and registration of the

corporate name in domestic health maintenance organizations. Reservation and registration

fees under Section 31A-3-103 apply.

(2) The location of an organization's principal office and the existence of a registered agent are

governed by Title 16, Chapter 17, Model Registered Agents Act.

Amended by Chapter 364, 2008 General Session

31A-8-203 Incorporators.

One or more adult natural persons may organize and act as the incorporators of a domestic

health maintenance organization under this part.

Enacted by Chapter 204, 1986 General Session

31A-8-204 Articles and bylaws.

(1) The articles of a nonprofit organization shall conform to Subsections 16-6a-202(1)(a) through

(e). The articles of other organizations shall conform to Section 16-10a-202. In addition:

(a) the powers of the corporation shall be limited to those permitted under Section 31A-8-105;

(b) the articles shall state whether the organization is a health maintenance organization or a

limited health plan;

services provided and indemnity guaranteed shall be consistent with the organization's

designation under Subsection (1)(b);

(d) the articles shall state that as to health care services for which individual providers are

required to be licensed, the services provided by the organization shall be provided by

persons properly licensed to perform the services;

(e) the articles shall state whether providers of services are subject to assessment or withholding

to pay operating costs or financial deficits;

(f) the articles shall state, for organizations having members, how persons become members and

that only members vote; and

(g) the articles of an organization not having members shall state how the directors of the

organization shall be selected and removed.

(2) The articles or bylaws shall designate three or more officers as the principal officers of the

corporation. The principal offices shall be held by at least three separate natural persons.

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(3) Section 31A-5-219 applies to amendments to articles of organizations.

(4) Organizations shall adopt and maintain bylaws. Section 16-6a-206 applies to organizations,

except for the statement that bylaws need not be adopted.

Amended by Chapter 364, 2008 General Session

31A-8-205 Organization permit and certificate of incorporation.

(1) Section 31A-5-204 applies to the formation of organizations, except that "Section 31A-5-211" in

Subsection 31A-5-204(5) shall be read "Section 31A-8-209."

(2) In addition to the requirements of Section 31A-5-204, the application for a permit shall include

a description of the initial locations of facilities where health care will be available to enrollees,

the hours during which various services will be provided, the types of health care personnel to

be used at each location and the approximate number of each personnel type to be available

at each location, the methods to be used to monitor the quality of health care furnished, the

method of resolving adverse benefit determinations initiated by enrollees or providers, the

method used to give enrollees an opportunity to participate in matters of policy, the medical

records system, and the method for documentation of utilization of health care by persons

insured.

Amended by Chapter 308, 2002 General Session

31A-8-206 Powers under organization permit -- Deposit of proceeds of subscriptions.

Sections 31A-5-207 and 31A-5-208 apply to the powers of an organization under an

organization permit and the deposit of proceeds of subscriptions, except that there are no

qualifying insurance policies as referred to in Subsection 31A-5-207(2)(a).

Enacted by Chapter 204, 1986 General Session

31A-8-207 Termination of organization permit -- Payment of organization expenses.

Section 31A-5-209, other than Subsection 31A-5-209(3)(c), applies to the termination of the

organization permit and the payment of organization expenses of organizations, except that

"Section 31A-5-212" shall be read "Section 31A-8-213."

Amended by Chapter 185, 2002 General Session

31A-8-208 Incorporators' liability and organization expenses.

Section 31A-5-210 applies to incorporators' liability and organization expenses in organizations.

Enacted by Chapter 204, 1986 General Session

31A-8-209 Minimum capital or minimum permanent surplus.

(1)

(a) A health maintenance organization being organized or operating under this chapter shall have

and maintain a minimum capital or minimum permanent surplus of $100,000.

(b) Each health maintenance organization authorized to do business in this state shall have and

maintain qualified assets as defined in Subsection 31A-17-201(2) in an amount not less than

the total of:

(i) the health maintenance organization's liabilities;

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(ii) the health maintenance organization's minimum capital or minimum permanent surplus

required by Subsection (1)(a); and

(iii) the greater of:

(A) the company action level RBC as defined in Subsection 31A-17-601(8)(b); or

(B) $1,300,000.

(2)

(a) The minimum required capital or minimum permanent surplus for a limited health plan may

not:

(i) be less than $10,000; or

(ii) exceed $100,000.

(b) The initial minimum required capital or minimum permanent surplus for a limited health plan

required by Subsection (2)(a) shall be set by the commissioner, after:

(i) a hearing; and

(ii) consideration of:

(A) the services to be provided by the limited health plan;

(B) the size and geographical distribution of the population the limited health plan anticipates

serving;

(D) the arrangements, agreements, and relationships of the limited health plan in place or

reasonably anticipated with respect to:

(I) insolvency insurance;

(II) reinsurance;

(III) lenders subordinating to the interests of enrollees and trade creditors;

(IV) personal and corporate financial guarantees;

(V) provider withholds and assessments;

(VI) surety bonds;

(VII) hold harmless agreements in provider contracts; and

(VIII) other arrangements, agreements, and relationships impacting the security of enrollees.

commissioner may, after a hearing, alter the limited health plan's minimum required capital or

minimum permanent surplus.

(3) The commissioner may allow the minimum capital or permanent surplus account of an

organization to be designated by some other name.

(4) A pattern of persistent deviation from the accounting and investment standards under this

section may be grounds for the commissioner to find that the one or more persons with

authority to make the organization's accounting or investment decisions are incompetent for

purposes of Subsection 31A-5-410(3).

Amended by Chapter 308, 2002 General Session

31A-8-211 Deposit.

(1) Except as provided in Subsection (2), each health maintenance organization authorized in this

state shall maintain a deposit with the commissioner under Section 31A-2-206 in an amount

equal to the sum of:

(a) $100,000; and

(b) 50% of the greater of:

(i) $900,000;

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(ii) 2% of the annual premium revenues as reported on the most recent annual financial

statement filed with the commissioner; or

(iii) an amount equal to the sum of three months uncovered health care expenditures as

reported on the most recent financial statement filed with the commissioner.

(2)

(a) The commissioner may exempt a health maintenance organization from the deposit

requirement of Subsection (1) if:

(i) the commissioner determines that the enrollees' interests are adequately protected;

(ii) the health maintenance organization has been continuously authorized to do business in this

state for at least five years; and

(iii) the health maintenance organization has $5,000,000 surplus in excess of the health

maintenance organization's company action level RBC as defined in Subsection

31A-17-601(8)(b).

(b) The commissioner may rescind an exemption given under Subsection (2)(a).

(3)

(a) Each limited health plan authorized in this state shall maintain a deposit with the

commissioner under Section 31A-2-206 in an amount equal to the minimum capital or

permanent surplus plus 50% of the greater of:

(i) .5 times minimum required capital or minimum permanent surplus; or

(ii)

(A) during the first year of operation, 10% of the limited health plan's projected uncovered

expenditures for the first year of operation;

(B) during the second year of operation, 12% of the limited health plan's projected uncovered

expenditures for the second year of operation;

expenditures for the third year of operation;

(D) during the fourth year of operation, 18% of the limited health plan's projected uncovered

expenditures during the fourth year of operation; or

(E) during the fifth year of operation, and during all subsequent years, 20% of the limited

health plan's projected uncovered expenditures for the previous 12 months.

(b) Projections of future uncovered expenditures shall be established in a manner that is

approved by the commissioner.

(4) A deposit required by this section may be counted toward the minimum capital or minimum

permanent surplus required under Section 31A-8-209.

Amended by Chapter 32, 2020 General Session

31A-8-213 Certificate of authority.

(1) An organization may apply for a certificate of authority at any time prior to the expiration of its

organization permit. The application shall include:

(a) a detailed statement by a principal officer about any material changes that have taken place

or are likely to take place in the facts on which the issuance of the organization permit was

based; and

(b) if any material changes are proposed in the business plan, the information about the changes

that would be required if an organization permit were then being applied for.

(2) The commissioner shall issue a certificate of authority, if the commissioner finds that:

(a) the organization's capital and surplus complies with the requirements of Section 31A-8-209 as

to the operations proposed under the new certificate of authority;

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(b) there is no basis for revoking the organization permit under Section 31A-8-207;

(d) the organization satisfies the requirements of Section 31A-8-104; and

(e) all other applicable requirements of the law have been met.

(3) The certificate of authority shall specify any limits imposed by the commissioner upon the

organization's business or methods of operation, including the general types of health care

services the organization is authorized to provide.

(4) Upon the issuance of the certificate of authority:

(a) the board shall authorize and direct the issuance of certificates for shares, bonds, or notes

subscribed to under the organization permit, and of insurance policies upon qualifying

applications obtained under the organization permit; and

(b) the commissioner shall authorize the release to the organization of all funds held in escrow

under Section 31A-5-208, as adopted by Section 31A-8-206.

(5)

(a) An organization may at any time apply to the commissioner for a new or amended certificate

of authority altering the limits on its business or methods of operation. The application shall

contain or be accompanied by that information reasonably required by the commissioner

under Subsections 31A-5-204(2) and 31A-8-205(2). The commissioner shall issue the new

certificate as requested if the commissioner finds that the organization continues to satisfy the

requirements specified under Subsection (2).

(b) If the commissioner issues an order under Chapter 27, Part 5, Administrative Actions, against

an organization, the commissioner may also revoke the organization's certificate and issue a

new one with any limitation the commissioner considers necessary.

Amended by Chapter 309, 2007 General Session

31A-8-214 Securities.

Chapter 5, Part 3, Securities of Domestic Insurance Corporations, applies to securities of

organizations, except that the amount "$150,000" in Subsection 31A-5-304(1) shall be read "one-

half of the minimum capital required of the organization."

Amended by Chapter 90, 2004 General Session

31A-8-215 Management.

Chapter 5, Part 4, Management of Insurance Corporations, applies to organizations, except that

for purposes of this chapter, Subsections 31A-5-412(3)(a)(vi) through (ix) shall be read: "corporate

reorganizations under Section 31A-8-216."

Amended by Chapter 349, 2009 General Session

31A-8-216 Corporate reorganizations.

Sections 31A-5-501 through 31A-5-506 and Section 31A-5-508 apply to corporate

reorganizations of organizations.

Enacted by Chapter 204, 1986 General Session

31A-8-217 Material transactions by insurers which are part of holding company system.

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(1) This section applies to an insurer licensed under this chapter that is part of a holding company

system, for purposes of:

(a) the reporting requirements of Section 31A-16-105; and

(b) the material transaction standards of Section 31A-16-106.

(2) Unless otherwise provided by rule, a transaction is not material under Subsection

31A-16-105(4) if the transaction involves an amount:

(a) of not more than:

(i) 10% for each transaction; or

(ii) 20% for cumulative transactions during any one calendar year; and

(b) calculated:

(i) on the basis of the organization's surplus requirement, determined in accordance with

Section 31A-5-211; and

(ii) as of December 31 of the year immediately preceding the transaction.

Amended by Chapter 252, 2003 General Session

Part 3

Foreign Organizations

31A-8-301 Requirements for doing business in state.

(1) Only a corporation incorporated and licensed under Part 2, Domestic Organizations, may do

business in this state as an organization.

(2) To do business in this state as an organization, a foreign corporation doing a similar business in

other states shall incorporate a subsidiary and license it under Part 2, Domestic Organizations,

for its Utah business. Except as to Chapter 16, Insurance Holding Companies, the laws

applicable to a domestic organization apply only to the domestic organization and not to its

foreign parent corporation.

Amended by Chapter 319, 2013 General Session

Part 4

Operations

31A-8-401 Enrollee participation.

Every organization shall provide a reasonable procedure, consistent with Section 31A-4-116, for

allowing enrollees to participate in matters of policy of the organization and for resolving complaints

and adverse benefit determinations initiated by enrollees or providers.

Amended by Chapter 308, 2002 General Session

31A-8-403 Examination of organization and providers.

Examinations of a health maintenance organization and its providers shall be conducted

according to the provisions of Chapter 2, Administration of the Insurance Laws. Except during

an audit of the internal quality control system, medical records of individual patients kept by the

organization or its providers are not subject to examination.

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Enacted by Chapter 204, 1986 General Session

31A-8-404 Annual audit of internal quality control.

Each organization shall prepare an annual report of the effectiveness of the organization's

internal quality control. The report shall be in a form prescribed by the commissioner after

consultation with the director of the Department of Health, and shall be certified and signed

by two officers of the organization. The commissioner may at any time require an audit of

an organization's quality control system. The audit shall be performed by qualified persons

designated by the commissioner. Auditors shall have full access to all records of the organization

and its providers, including medical records of individual patients. The information contained in

the medical records of individual patients shall remain confidential, and information derived from

those records may not be used in a manner that could directly or indirectly identify an individual.

All information, interviews, reports, statements, memoranda, or other data furnished by reason

of the audit and any findings or conclusions of the auditors are privileged and are not subject

to discovery, use, or receipt in evidence in any legal proceeding except hearings before the

commissioner or the director of the Department of Health concerning alleged violations of the

provisions of this chapter.

Amended by Chapter 314, 1994 General Session

31A-8-405 Confidentiality of medical records and audits.

Unless a court orders otherwise, the department shall treat the following records and

information as confidential and prevent their disclosure to the public:

(1) the medical records of enrollees of an organization; and

(2) the annual audits performed under Section 31A-8-404.

Enacted by Chapter 204, 1986 General Session

31A-8-406 Distribution by nonprofit organizations.

A nonprofit organization may pay compensation in a reasonable amount to its members,

trustees, or officers for services rendered, may make reasonable incentive payments to its

providers, may confer benefits upon its members in conformity with its purposes, may pay interest

on certificates of indebtedness issued by it evidencing capital contributions, and upon dissolution

or final liquidation may make distributions to its members as permitted by Title 16, Chapter 6a,

Utah Revised Nonprofit Corporation Act, and no such payment, benefit, or distribution shall be

considered to be a dividend or distribution of income. Notwithstanding Section 31A-8-105, and in

addition to the powers granted in that section, a nonprofit organization has all powers conferred

upon it by Section 16-6a-302.

Amended by Chapter 300, 2000 General Session

31A-8-407 Written contracts -- Limited liability of enrollee -- Provider claim disputes --

Leased networks.

(1)

(a) Every contract between an organization and a participating provider of health care services

shall be in writing and shall set forth that if the organization:

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(i) fails to pay for health care services as set forth in the contract, the enrollee may not be liable

to the provider for any sums owed by the organization; and

(ii) becomes insolvent, the rehabilitator or liquidator may require the participating provider of

health care services to:

(A) continue to provide health care services under the contract between the participating

provider and the organization until the earlier of:

(I) 90 days after the date of the filing of a petition for rehabilitation or the petition for

liquidation; or

(II) the date the term of the contract ends; and

(B) subject to Subsection (1)(c), reduce the fees the participating provider is otherwise entitled

to receive from the organization under the contract between the participating provider and

the organization during the time period described in Subsection (1)(a)(ii)(A).

(b) If the conditions of Subsection (1)(c) are met, the participating provider shall:

(i) accept the reduced payment as payment in full; and

(ii) relinquish the right to collect additional amounts from the insolvent organization's enrollee.

(i) the rehabilitator or liquidator may not reduce a fee to less than 75% of the regular fee set

forth in the participating provider contract; and

(ii) the enrollee shall continue to pay the same copayments, deductibles, and other payments

for services received from the participating provider that the enrollee was required to pay

before the filing of:

(A) the petition for rehabilitation; or

(B) the petition for liquidation.

(2) A participating provider may not collect or attempt to collect from the enrollee sums owed by the

organization or the amount of the regular fee reduction authorized under Subsection (1)(a)(ii) if

the participating provider contract:

(a) is not in writing as required in Subsection (1); or

(b) fails to contain the language required by Subsection (1).

(3)

(a) A person listed in Subsection (3)(b) may not bill or maintain any action at law against an

enrollee to collect:

(i) sums owed by the organization; or

(ii) the amount of the regular fee reduction authorized under Subsection (1)(a)(ii).

(b) Subsection (3)(a) applies to:

(i) a participating provider;

(ii) an agent;

(iii) a trustee; or

(iv) an assignee of a person described in Subsections (3)(b)(i) through (iii).

in accordance with applicable law, the provider contract, the subscriber contract, and the

organization's written payment policies in effect at the time services were rendered.

(d) If the parties are unable to resolve their dispute, the matter shall be subject to binding

arbitration by a jointly selected arbitrator. Each party is to bear its own expense except the

cost of the jointly selected arbitrator shall be equally shared. This Subsection (3)(d) does not

apply to the claim of a general acute hospital to the extent it is inconsistent with the hospital's

provider agreement.

(e) An organization may not penalize a provider solely for pursuing a claims dispute or otherwise

demanding payment for a sum believed owing.

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(4) If an organization permits another private entity with which it does not share common

ownership or control to use or otherwise lease one or more of the organization's networks that

include participating providers, the organization shall ensure, at a minimum, that the entity pays

participating providers in accordance with the same fee schedule and general payment policies

as the organization would for that network unless payment for services is governed by a public

program's fee schedule.

Amended by Chapter 3, 2005 Special Session 1

31A-8-408 Organizations offering point of service or point of sales products.

Effective July 1, 1991, a health maintenance organization offering products that permit members

the option of obtaining covered services from a noncontracted provider, which is a point of service

or point of sale product, shall comply with the requirements of Subsections (1) through (7).

(1) The cost of an encounter with a noncontracted provider is considered an uncovered

expenditure as defined in Section 31A-8-101.

(2)

(a) An organization shall report to the commissioner on a monthly basis the number of

encounters with contracted and noncontracted providers if the organization offers to sell a:

(i) point of service product; or

(ii) point of sale product.

(b) The commissioner shall:

(i) define the form, content, and due date of the report required by this Subsection (2); and

(ii) require audited reports of the information on a yearly basis.

(3) An organization may not offer a point of service product or a point of sale product unless the

organization has secured contracts with participating providers located within the organization's

service area for each covered service other than those unusual or infrequently used health

services that are not available from the organization's health care providers.

(4) An organization may not enroll a member who does not work or reside in the service area as

defined by rule, except this Subsection (4) does not apply to a dependent of an enrollee.

(5) Any organization that exceeds the 10% limit of unusual or infrequently used health services as

defined in Section 31A-8-101 is subject to a forfeiture of up to $50 per encounter.

(6) An organization shall disclose to employees and members the existence of the 10% limit:

(a) at enrollment; or

(b) prior to enrollment.

(7) The commissioner shall hold hearings and adopt rules providing any additional limitations or

requirements necessary to secure the public interest in conformity with this section.

Amended by Chapter 308, 2002 General Session

Chapter 8a

Health Discount Program Consumer Protection Act

Part 1

General Provisions

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31A-8a-101 Title.

This chapter is known as the "Health Discount Program Consumer Protection Act."

Enacted by Chapter 58, 2005 General Session

31A-8a-102 Definitions.

As used in this chapter:

(1) "Fee" means any periodic charge for use of a discount program.

(2) "Health care provider" means a health care provider as defined in Section 78B-3-403, with the

exception of "licensed athletic trainer," who:

(a) is practicing within the scope of the provider's license; and

(b) has agreed either directly or indirectly, by contract or any other arrangement with a health

discount program operator, to provide a discount to enrollees of a health discount program.

(3)

(a) "Health discount program" means a business arrangement or contract in which a person pays

fees, dues, charges, or other consideration in exchange for a program that provides access to

health care providers who agree to provide a discount for health care services.

(b) "Health discount program" does not include a program that does not charge a membership

fee or require other consideration from the member to use the program's discounts for health

services.

(4) "Health discount program marketer" means a person, including a private label entity, that

markets, promotes, sells, or distributes a health discount program but does not operate a health

discount program.

(5) "Health discount program operator" means a person that provides a health discount program

by entering into a contract or agreement, directly or indirectly, with a person or persons in this

state who agree to provide discounts for health care services to enrollees of the health discount

program and determines the charge to members.

(6) "Marketing" means making or causing to be made any communication that contains information

that relates to a product or contract regulated under this chapter.

(7) "Value-added benefit" means a discount offering with no additional charge made by a health

insurer or health maintenance organization that is licensed under this title, in connection with

existing contracts with the health insurer or health maintenance organization.

Amended by Chapter 319, 2018 General Session

31A-8a-103 Scope and purposes.

(1) A person shall comply with the provisions of this chapter if the person operates a health

discount program in this state.

(2) Notwithstanding any provision in this title, a person who only operates or markets a health

discount program is exempt from:

(a) Section 31A-4-113;

(b) Section 31A-4-113.5;

(d) Chapter 7, Nonprofit Health Service Insurance Corporations;

(e) Section 31A-8-209;

(f) Section 31A-8-211;

(g) Section 31A-8-214;

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(h) Chapter 9, Insurance Fraternals, Chapter 10, Annuities, Chapter 11, Motor Clubs, and

Chapter 12, State Risk Management Fund;

(i) Chapter 17, Determination of Financial Condition, and Chapter 18, Investments;

(j) Chapter 19a, Utah Rate Regulation Act;

(k) Sections 31A-23a-103 and 31A-23a-104;

(l) Chapter 25, Third Party Administrators, and Chapter 26, Insurance Adjusters;

(m) Chapter 28, Guaranty Associations; and

(n) Chapter 35, Bail Bond Act, Chapter 36, Life Settlements Act, Chapter 37, Captive Insurance

Companies Act, and Chapter 38, Federal Health Care Tax Credit Program Act.

(3) A person licensed under this title as an accident and health insurer or health maintenance

organization:

(a) is not required to obtain a license as required by Section 31A-8a-201 to operate a health

discount program; and

(b) is required to comply with all other provisions of this chapter.

(4) The purposes of this chapter include:

(a) full disclosure in the sale of health discount programs;

(b) reasonable regulation of the marketing and disclosure practices of health discount program

operators; and

(5) Nothing in this chapter prohibits a health discount program operator from marketing a health

discount program operator's own services without a health discount program marketer license.

Amended by Chapter 258, 2015 General Session

Part 2

Licensure

31A-8a-201 License required.

(1) Except as provided in Subsection 31A-8a-103(3), prior to operating or marketing a health

discount program, a person shall:

(a) be authorized to transact business in this state; and

(b) be licensed by the commissioner.

(2)

(a) An application for licensure under this chapter shall be filed with the commissioner on a form

prescribed by the commissioner.

(b) The application shall be sworn to by an officer or authorized representative of the health

discount program and shall include:

(i) articles of incorporation with bylaws or other enabling documents that establish the

organizational structure;

(ii) information required by the commissioner by administrative rule which the commissioner

determines is necessary to:

(A) identify and locate principals, operators, and marketers involved with the health discount

program; and

(B) protect the interests of enrollees of health discount programs, health care providers, and

consumers;

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(iii) biographical information, and when requested by the commissioner, a criminal background

check, under the provisions of Subsection 31A-23a-105(3);

(iv) the disclosures required in Section 31A-8a-203; and

(v) the fee established in accordance with Section 31A-3-103.

Amended by Chapter 135, 2013 General Session

31A-8a-202 Commissioner to issue license -- Renewals.

(1) The commissioner may issue a license to a person:

(a) who files an application and pays the fee in accordance with Section 31A-8a-201; and

(b) who the commissioner determines is in compliance with this chapter.

(2)

(a) A license issued under this chapter is valid until the immediately following December 31 and

may be renewed in accordance with Subsection (2)(b).

(b) A license may be renewed if:

(i) the commissioner finds that the person operating the health discount program is in

compliance with this chapter;

(ii) the health discount program operator or health discount program marketer submits the

appropriate renewal application and pays any applicable fees for renewal; and

(iii) the health discount program certifies that the information in the application for renewal is

accurate.

Amended by Chapter 135, 2013 General Session

31A-8a-202.5 Reporting of administrative actions and criminal prosecution.

(1) A health discount program operator or health discount program marketer shall report to the

commissioner any administrative action or criminal prosecution brought against the health

discount program operator, health discount program marketer, or an owner, officer, or principal

of the health discount program operator or health discount program marketer, other than an

administrative action brought by the department.

(2) The health discount program operator or health discount program marketer shall file the report

described in Subsection (1):

(a) at the time the health discount program operator or health discount program marketer files an

application for licensure or renewal; and

(b)

(i) for an administrative action that occurs on or after the day on which the health discount

program operator or health discount program marketer files an application for licensure or

renewal, within 30 days after the day on which the final disposition of the administrative

action is issued; or

(ii) for a criminal prosecution, within 30 days after the health discount program operator's or

health discount program marketer's initial appearance before a court.

(3) The report described in Subsection (1) shall include:

(a) a copy of the complaint or other relevant legal documents related to the administrative action

or criminal prosecution; and

(b) an explanation or other information that the health discount program operator or health

discount program marketer desires to submit in relation to the action or charge.

Enacted by Chapter 135, 2013 General Session

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31A-8a-203 Information filed with the department.

(1) Prior to operating a health discount program, a person shall submit the following to the

commissioner:

(a) a copy of contract forms used by the health discount program for:

(i) health care providers or health care provider networks participating in the health discount

program, including the discounts for medical services provided to enrollees;

(ii) marketing;

(iii) administration of the health discount program;

(iv) enrollment;

(v) investment management for the health discount programs; and

(vi) subcontracts for any services;

(b) the program's proposed marketing plan; and

(2) The company shall file prior to use:

(a) the form of contracts used by the health discount program operator;

(b) the marketing plan; and

(3) The commissioner may adopt rules in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act, to implement this section.

Amended by Chapter 297, 2011 General Session

31A-8a-204 Advertising restrictions and requirements.

(1) An operator of a health discount program may not:

(a) use any form of words or terms that may confuse health discount programs with other types

of health insurance in advertising or marketing such as "health plan," "health benefit plan,"

"coverage," "copay," "copayments," "preexisting conditions," "guaranteed issue," "premium,"

and "preferred provider";

(b) use other terms as designated by the commissioner by administrative rule in advertisement

or marketing that could reasonably mislead a consumer to believe that a discount health

program is any other form of health insurance; or

(2) A health discount program operator:

(a) shall have a written agreement with any marketer of the health discount program prior to

marketing, selling, promoting, or distributing the health discount programs;

(b) shall file with the commissioner all advertisement, marketing materials, brochures, and

discount programs prior to their use or distribution; and

(i) in writing in at least 10-point type and bolded; and

(ii) with any marketing or advertising to the public and with any enrollment forms given to an

enrollee:

(A) the program is not a health insurance policy;

(B) the program provides discounts only at certain health care providers for health care

services;

discount from those health care providers who have contracted with the health discount

program; and

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(D) the corporate name and the location of the health discount program operator.

(3) A health discount program operator or marketer who sells the health discount program with

another product shall provide the consumer a written itemization of the fees of the health

discount program separate from any fees or charges for the other product, which can be

purchased separately.

Amended by Chapter 297, 2011 General Session

31A-8a-205 Disclosure of health discount program terms.

(1)

(a) Health discount program operators shall provide to each purchaser or potential purchaser a

copy of the terms of the discount program at the time of purchase.

(b) For purposes of this section "purchaser" means the employer in an employer sponsored plan,

or an individual purchasing outside of an employer relationship.

(2) The disclosure required by Subsection (1) should be clear and thorough and should include any

administrative or monthly fees, trial periods, procedures for securing discounts, cancellation

procedures and corresponding refund requests, and procedures for filing disputes.

(3)

(a) A contract shall be signed by the purchaser acknowledging the terms before any fees are

collected and shall include notice of the purchaser's 30-day free look rights.

(b) For purposes of this Subsection (3) and Section 46-4-201, when a contract is entered into via

telephone, facsimile transmission or the Internet, the following is considered a signing of the

contract:

(i) if via the Internet, the online application form is completed and sent by the purchaser to the

health discount program operator;

(ii) if via facsimile transmission, the application is completed, signed and faxed to the health

discount program operator; or

(iii) if via telephone, the script used by the health discount program operator to solicit the

purchaser shall include any limitations or exclusions to the program, and the contract shall

be provided to the purchaser via facsimile, mail, or email within 10 working days of the

purchaser consenting to enrolling over the telephone.

Amended by Chapter 135, 2013 General Session

31A-8a-205.5 Free look right.

(1) Except as provided in Subsection (2), a person that purchases a health discount program may,

with or without cause, within 30 days after the day on which the purchase contract is signed,

cancel the contract without payment, damages, penalty, or liability of any kind by giving written

notice of cancellation to the other party to the contract.

(2) A person may not exercise the right of cancellation described in Subsection (1) if the person

has used the services of the health discount program under the contract.

(3) If a person cancels a contract under Subsection (1), the other party to the contract shall refund

all money and other consideration paid in relation to the health discount program, less a

maximum of $25 of any enrollment charge, regardless of whether the enrollment charge was

designated as nonrefundable.

Enacted by Chapter 135, 2013 General Session

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31A-8a-206 Provider agreements -- Record keeping.

(1) A health discount program operator may not place any restrictions on an enrollee's access to

health care providers such as waiting periods or notification periods.

(2) A health discount program operator may not reimburse health care providers for services

rendered to an enrollee, unless the health discount program operator is a licensed third party

administrator.

(3)

(a) A health discount program operator shall have a written agreement with a health care

provider who agrees to provide discounts to health discount program enrollees.

(b) If the written agreement is with a provider network, the health discount plan shall require the

provider network to have written agreements with each of its health care providers.

(4) The health discount program operator shall maintain a copy of each active health care provider

agreement.

Amended by Chapter 297, 2011 General Session

31A-8a-207 Notice of change.

(1) A health discount program operator shall provide the commissioner notice of:

(a) any change in the health discount program's organizational name, change of business or

mailing address, or change in ownership or principals; and

(b) any change in the information submitted in accordance with Section 31A-8a-203.

(2)

(a) The notice required by Subsection (1) shall be submitted 30 days prior to any change.

(b) Approval by the commissioner is required for any changes in forms that required approval

under Section 31A-8a-203.

(3) A health insurer or health maintenance organization licensed under this title shall annually file

with the Accident and Health Data Survey, a list of all value-added benefits offered at no cost to

its enrollees.

Amended by Chapter 297, 2011 General Session

31A-8a-208 Representing or aiding an unauthorized insurer.

(1) The provisions of this chapter and Chapter 15, Unauthorized Insurers, Surplus Lines, and Risk

Retention Groups, apply to the activities of an unlicensed health discount program operator

as if the health discount program was an unauthorized insurance contract and the unlicensed

health discount program operator was an unauthorized insurer.

(2) A person who knowingly and intentionally represents or aids an unauthorized insurer in

violation of the provisions of this chapter or Chapter 15, Unauthorized Insurers, Surplus Lines,

and Risk Retention Groups, is guilty of a third degree felony.

Enacted by Chapter 58, 2005 General Session

31A-8a-209 Health discount program fraud.

For purposes of Chapter 31, Insurance Fraud Act, a health discount program operator is an

insurer as defined in Section 31A-31-102 and is subject to the provisions of Chapter 31, Insurance

Fraud Act.

Enacted by Chapter 58, 2005 General Session

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31A-8a-210 Rulemaking authority.

The commissioner has authority to adopt administrative rules in accordance with Title 63G,

Chapter 3, Utah Administrative Rulemaking Act:

(1) to enforce this chapter; and

(2) as necessary to protect the public interest.

Amended by Chapter 382, 2008 General Session

Chapter 9

Insurance Fraternals

Part 1

General Provisions

31A-9-101 Definitions.

(1) As used in this chapter:

(a) "Fraternal" or "fraternal benefit society" means a corporation organized or operating under this

chapter that:

(i) has no capital stock;

(ii) exists solely for:

(A) the benefit of its members and their beneficiaries; and

(B) any lawful social, intellectual, educational, charitable, benevolent, moral, fraternal,

patriotic, or religious purpose for the benefit of its members or the public, carried on

through voluntary activity of its members in their local lodges or through institutional

programs of the fraternal or its local lodges;

(iii) has a lodge system;

(iv) has a representative form of government; and

(v) provides insurance benefits authorized under this chapter.

(b) "Laws of a fraternal" include its articles of incorporation and bylaws, however designated.

(i) there is a supreme governing body;

(ii) subordinate to the supreme governing body are local lodges, however designated, into

which natural persons are admitted as members in accordance with the laws of the

fraternal;

(iii) the local lodges are required by the laws of the fraternal to hold regular meetings at least

monthly; and

(iv) the local lodges regularly engage in programs involving member participation to implement

the purposes of Subsection (1)(a)(ii).

(d) "Representative form of government" means the fraternal complies with Section 31A-9-403.

(2) In any provisions of law made applicable to fraternals by this chapter, the technical terms

used in those provisions are applicable to fraternals despite the use of other parallel terms by

fraternals.

(3) The definitions in Section 31A-1-301 and the definitions to the following terms in Section

16-6a-102 apply to fraternals:

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(a) "articles of incorporation";

(b) "bylaws"; and

Amended by Chapter 386, 2009 General Session

31A-9-102 Scope and purposes.

(1)

(a) This chapter applies to all fraternals organized under the laws of this state.

(b) Except as expressly provided in this chapter and in Section 31A-14-210, this chapter does not

apply to nondomestic fraternals.

(2) The purposes of this chapter include:

(a) providing a complete, self-contained procedure for the formation of fraternals;

(b) assuring the solidity of fraternals by providing an organizational framework to facilitate sound

management, operation, and regulation;

(d) encouraging the fulfillment of the special purposes of fraternals.

Enacted by Chapter 242, 1985 General Session

31A-9-103 Orders imposing and relaxing restrictions.

(1) The commissioner may subject any fraternal to some or all of the restrictions of Subsections

31A-5-305(2)(a)(i) and (ii), and Subsection 31A-5-410(1)(b), as such provisions are

incorporated by Sections 31A-9-303 and 31A-9-407.

(2) The commissioner may free a fraternal from any of the restrictions applicable to fraternals

under the provisions enumerated in Subsection (1), if he is satisfied that the fraternal's financial

condition, management, and other circumstances give assurance that the interests of insureds

and the public will not be endangered by the waiver.

Amended by Chapter 204, 1986 General Session

31A-9-104 Applicability of other insurance laws to fraternals.

(1) No section of Chapter 5, Domestic Stock and Mutual Insurance Corporations, applies to

fraternals unless it is specifically made applicable by this chapter.

(2) Each section of the Insurance Code, other than in Chapter 5, Domestic Stock and Mutual

Insurance Corporations, that applies to mutuals subject to Chapter 5, Domestic Stock and

Mutual Insurance Corporations, also applies to domestic and nondomestic fraternals unless:

(a) this chapter or the particular section provides otherwise; or

(b) the particular section is inconsistent with a provision applying explicitly to fraternals, in this

chapter or elsewhere.

Enacted by Chapter 242, 1985 General Session

31A-9-105 General corporate powers and procedures.

(1) Section 16-10a-302 applies to the general powers of fraternals.

(2) Section 16-6a-304 applies to ultra vires issues in fraternals.

(3) Subsection 31A-5-104(3) applies to the omission of a seal in a fraternal.

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(4) Sections 16-6a-705 and 16-6a-707 apply to waiver of notice and consent to action without a

meeting in a fraternal.

(5) Subsection 31A-5-104(5) applies to the power to hold assets as a trustee in a fraternal.

Amended by Chapter 300, 2000 General Session

31A-9-106 Miscellaneous provisions.

Sections 31A-5-105 and 31A-5-106 apply to fraternals.

Amended by Chapter 10, 1997 General Session

Part 2

Organization of Fraternals

31A-9-201 Reservation of corporate name.

Section 31A-5-201 applies to the reservation of a corporate name for a fraternal.

Enacted by Chapter 242, 1985 General Session

31A-9-202 Members and applicants in fraternals.

(1) A fraternal may admit any natural person to membership under the conditions and for the type

of insurance and other benefits its laws prescribe, subject to this chapter and other applicable

laws. A member without insurance ceases to be a member for insurance purposes if the

fraternal is converted to a mutual.

(2) Subject to Section 31A-21-104, fraternals may provide insurance for the benefit of members,

their dependents, and persons who are eligible for membership except for age.

(3) A fraternal may organize lodges for children who are not old enough for membership, but who

are to be covered by insurance. Membership in local lodges is not required for those children,

and they have no voting rights.

(4) A fraternal may extend temporary or conditional insurance coverage to a nonmember who has

applied for membership in the fraternal.

Enacted by Chapter 242, 1985 General Session

31A-9-203 Incorporators.

One or more adult natural persons may organize and act as the incorporators of a fraternal

under this chapter.

Amended by Chapter 204, 1986 General Session

31A-9-204 Articles of incorporation and bylaws.

(1) The articles of incorporation shall set forth:

(a) the name of the corporation, which shall include the word "fraternal" or words of equivalent

meaning;

(b) the location of the principal office of the fraternal, which shall be in this state;

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Subsection 31A-9-101(1)(a)(ii)(B), but shall otherwise be restricted to those permitted under

Section 31A-4-107;

(d) the classes of members, and the qualifications and rights of the members of each class;

(e) a description of the fraternal's representative form of government, conforming to Section

31A-9-403;

(f) the manner in which local lodges or branches may be formed and the powers they shall have,

or a statement that the formation and powers of local lodges or branches is provided for in the

bylaws;

(g) a provision for fraternal bonds, if any are to be authorized, which shall conform to Section

31A-9-303; and

(h) a provision for amendment of the articles, which shall conform to Section 31A-9-213.

(2) The articles of incorporation are not required to recite the corporate powers enumerated in this

chapter, as these powers are authorized by law.

(3) Section 16-6a-818 applies to the officers of fraternals. The articles or bylaws shall specifically

designate three or more offices, which shall be held by the principal officers of the fraternal.

The principal offices shall be held by at least three separate natural persons.

(4) The bylaws shall comply with the provisions of this chapter. A copy of the bylaws and any

amendments to them shall be filed with the commissioner promptly after their adoption. Notice

of amendments to the bylaws shall be given promptly to members. Subject to this chapter,

Section 16-6a-206 applies to the bylaws and resolutions of fraternals.

Amended by Chapter 300, 2000 General Session

31A-9-205 Organization permit and certificate of incorporation.

(1) Section 31A-5-204 applies to fraternals except that the word "mutual" shall be read "fraternal"

and "Section 31A-5-211" in Subsection 31A-5-204(5) shall be read "Section 31A-9-209."

(2) The application for an organization permit shall include, in addition to those things required

under Subsection 31A-5-204(2), a statement of the plan for fraternal activities and for the

formation of a representative government under Section 31A-9-403.

Enacted by Chapter 242, 1985 General Session

31A-9-206 Powers under organization permit and deposit of proceeds of subscriptions.

Subsection 31A-5-207(2) and Section 31A-5-208 apply to fraternals, except that:

(1) the word "mutual" shall be read "fraternal"; and

(2) there are no qualifying insurance policies as referred to in Subsection 31A-5-207(2)(a).

Enacted by Chapter 242, 1985 General Session

31A-9-207 Termination of organization permit and payment of organization expenses.

Section 31A-5-209, other than Subsection (3)(c), applies to fraternals, except that:

(1) the word "mutual" shall be read "fraternal"; and

(2) the reference to "Section 31A-5-212" shall be read "Section 31A-9-210."

Enacted by Chapter 242, 1985 General Session

31A-9-208 Incorporators' liability and organization expenses.

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Subsections 31A-5-210(1) and (2)(b) apply to fraternals, except that the word "mutual" shall be

read "fraternal."

Enacted by Chapter 242, 1985 General Session

31A-9-209 Initial surplus requirements.

(1)

(a) The requirements of Subsections 31A-5-211(1) through (4) apply to fraternals with respect to

the amount of permanent surplus required of the fraternal.

(b) For purposes of Subsection (1)(a):

(i) wherever the word "mutual" appears in Subsections 31A-5-211(1) through (4), it means

"fraternal;" and

(ii) the reference to "Section 31A-5-212" in Subsection 31A-5-211(1) means "Section

31A-9-210."

(2)

(a) Every fraternal shall include in its laws a provision that if the financial position of the fraternal

becomes impaired, the board of directors or the supreme governing body may determine on

an equitable basis the proportionate share of the deficiency of each member of the fraternal.

(b) The member may then:

(i) pay the member's share of the deficiency;

(ii) accept the imposition of a lien on the certificate of insurance, to bear interest at the rate

charged on policy loans under the certificate, compounded annually until paid; or

(iii) accept a proportionate reduction in benefits under the certificate.

if no election is made.

(3) Except as provided in Subsection (2), no fraternal may operate on an assessment basis.

Amended by Chapter 9, 1996 Special Session 2

31A-9-210 Certificate of authority.

Section 31A-5-212 applies to certificates of authority for fraternals, except that references to

other sections in Chapter 5, Domestic Stock and Mutual Insurance Corporations, shall be read to

refer to the corresponding sections in Chapter 9, Insurance Fraternals.

Enacted by Chapter 242, 1985 General Session

31A-9-211 Accelerated organization procedure.

Section 31A-5-213 applies to the accelerated organization procedure for fraternals, except that

the word "mutual" shall be read "fraternal."

Enacted by Chapter 242, 1985 General Session

31A-9-212 Separate accounts and subsidiaries.

(1) Except as provided in Subsections (2) and (3), Sections 31A-5-217 and 31A-5-218 apply

to separate accounts and subsidiaries of fraternals. If a fraternal issues contracts on a

variable basis, Subsections 31A-22-902(2) and (6) and 31A-9-209(2) do not apply, except that

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Subsection 31A-9-209(2) applies to any benefits contained in the variable contracts which are

fixed or guaranteed dollar amounts.

(2) If a fraternal engages in any insurance business other than life, accident and health, annuities,

property, or liability insurance, it shall do so through a subsidiary under Section 31A-5-218.

(3)

(a) A local lodge may incorporate under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation

Act, or the corresponding law of the state where it is located, to carry out the noninsurance

activities of the local lodge.

(b) Corporations may be formed under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation

Act, to implement Subsection 31A-9-602(2).

Amended by Chapter 116, 2001 General Session

31A-9-213 Amendment of articles of incorporation.

(1) The articles of a fraternal may provide for amendment by the supreme governing body or by

the board of directors, and may also provide for amendment by an affirmative vote of a majority

of those members who vote in a referendum. Only votes cast within 60 days from the date of

mailing the first ballot by the fraternal are counted. The timeliness of a vote is determined by

the date of its mailing as evidenced by its postmark or other suitable evidence.

(2) For five years after the initial issuance of a certificate of authority, proposed amendments of

the articles shall be filed with the commissioner at least 30 days before the amendment is

submitted for approval to the members or to the supreme governing body. If the approval of the

members or the supreme governing body is not required, proposed amendments to the articles

shall be filed with the commissioner at least 30 days before their effective date.

(3) No amendment is effective until the articles of amendment are filed with the commissioner,

together with a statement of the results of the voting on the amendment or a statement that no

vote is required.

(4) Within four months after filing the articles of amendment with the commissioner, they shall be

furnished to all members either by mail or under Subsection 31A-9-402(1).

Amended by Chapter 204, 1986 General Session

Part 3

Securities of Fraternals

31A-9-301 Securities regulation.

Section 31A-5-301 applies to fraternal bonds but does not apply to contribution notes, as they

are defined in Section 31A-5-305, as incorporated by Section 31A-9-303.

Enacted by Chapter 242, 1985 General Session

31A-9-302 Registration of securities.

Section 31A-5-302 applies to securities of fraternals.

Enacted by Chapter 242, 1985 General Session

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31A-9-303 Authorized securities.

Subsection 31A-5-305(2) applies to authorized securities of fraternals, except that the words

"mutual" and "nonassessable mutual" shall be read "fraternal."

Enacted by Chapter 242, 1985 General Session

Part 4

Management of Fraternals

31A-9-401 Principal office, registered agent, and corruption in members' meetings.

Section 31A-5-401 governs the location of the principal office and existence of a registered

agent for fraternals. Section 31A-5-403 applies to members' meetings of domestic fraternals.

Amended by Chapter 204, 1986 General Session

31A-9-402 Communications to members.

(1) A fraternal may provide in its laws for an official publication in which any notice, report, or

statement required by law to be given to members, including a notice of election, may be

published. Any required notice shall be printed conspicuously in the publication.

(2) The commissioner may by rule prescribe that copies of specified classes of communications

published generally to members, including the official publication, be sent to the commissioner

when they are sent to the members.

(3) If the records of a fraternal show that two or more members have the same mailing address, an

official publication mailed to one member is considered to be notice to all members at the same

address, unless a member requests a separate copy.

Enacted by Chapter 242, 1985 General Session

31A-9-403 Representative form of government.

(1) A fraternal shall have a supreme governing body consisting either of:

(a) A board of directors is the supreme governing body of a fraternal. It consists of some directors

elected directly by the members or by their representatives in intermediate assemblies under

Subsection (2), and other directors prescribed in the fraternal's laws. A majority of the board

shall be elected directors, having a sufficient number of votes to amend the articles or bylaws

of the fraternal which can be amended without the consent of the members. The board shall

meet at least quarterly to conduct the business of the fraternal. The elected directors shall be

elected on a plan that ensures approximately equal weight to each fraternal member's vote.

Voting may be by mail.

(b) Delegates elected directly by the members or at intermediate assemblies or conventions of

members or their representatives, together with other delegates prescribed in the fraternal's

laws form an assembly that is a supreme governing body of a fraternal. A majority of the

assembly shall be elected delegates, having at least two-thirds of the votes and with a

sufficient number of votes to amend the articles or bylaws that can be amended without

consent of the members. The assembly, whatever designated, shall meet at least once

every four years and shall elect a board of directors to conduct the business of the fraternal

between meetings of the assembly. The delegates making up the supreme governing

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body shall be elected on a plan that ensures approximately equal weight to each fraternal

member's vote.

(2) The laws of a fraternal may provide that:

(a) delegates to intermediate assemblies may represent geographical districts or lodges; or

(b) delegates may represent the members in defined classes determined on a reasonable basis;

and

members represented.

(3) No votes may be cast by proxy.

Amended by Chapter 20, 1995 General Session

31A-9-404 Annual report to fraternal members.

(1) Every domestic fraternal shall send to each member having insurance or shall publish in the

official publication under Subsection 31A-9-402(1), an abbreviated annual report.

(2) This report shall contain:

(a) basic financial and operating data;

(b) information about important business and corporate developments;

(d) other information the commissioner by rule requires it to include to adequately inform its

members.

(3) The fraternal shall send a business mail reply form on which the member may request a more

complete annual report. This complete annual report shall contain the information prescribed by

rule under Subsection 31A-2-201(3).

Amended by Chapter 91, 1987 General Session

31A-9-405 Board of directors.

(1) Sections 16-6a-801 and 16-6a-802 apply to fraternals, except that the supreme governing

body may act as the board of directors if it meets at least quarterly. Subsections 31A-5-407(2)

through (9) apply to fraternals, except that the word "mutual" shall be read "fraternal" and the

references to other sections of Chapter 5, Domestic Stock and Mutual Insurance Corporations,

shall be to the corresponding sections of Chapter 9, Insurance Fraternals.

(2) The terms of directors and officers may not exceed four years.

Amended by Chapter 300, 2000 General Session

31A-9-406 Removal of directors and filling of vacancies.

(1) A director may be removed from office for cause by an affirmative vote of a majority of the full

board of directors at a meeting of the board called for that purpose or may be removed under

Subsection 16-6a-820(4).

(2) Any vacancy occurring in the board, including a vacancy created by an increase in the number

of directors, may be filled by the affirmative vote of a majority of the directors then in office,

although less than a quorum.

(3) If the laws of the fraternal provide that at least 2/3 of the directors are elected by the members,

elected director vacancies may be filled by the board for the remainder of the terms for which

there are vacancies.

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(4) If the vacancy is to be filled other than by a regular election, the election by the board is

effective only until a reasonable time has elapsed for choosing the director in that other

manner.

(5) If less than 2/3 of the directors are elected by the members, elected director vacancies may be

filled by the directors only until the next succeeding regular election. At that time, the elected

director vacancy may be filled for the remainder of the term for which there is a vacancy. A

director elected under this section to fill the unexpired term of an elected director is an elected

director within the meaning of Subsection 31A-9-403(1)(a).

(6) If the board ceases to exist, the commissioner shall arrange the necessary procedures for

holding elections to create a new board.

Amended by Chapter 300, 2000 General Session

31A-9-407 Supervision of management changes.

Section 31A-5-410 applies to the supervision of management changes of fraternals.

Enacted by Chapter 242, 1985 General Session

31A-9-408 Continuity of management in emergencies.

Section 31A-5-411 applies to the continuity of management of fraternals in emergencies.

Enacted by Chapter 242, 1985 General Session

31A-9-409 Committees of directors.

Section 31A-5-412 applies to committees of directors in fraternals, except that the references

to other sections of Chapter 5, Domestic Stock and Mutual Insurance Corporations, shall be to the

corresponding sections of Chapter 9, Insurance Fraternals.

Enacted by Chapter 242, 1985 General Session

31A-9-410 Interlocking directorates and other relationships.

Section 31A-5-413 applies to interlocking directorates and other relationships of fraternals.

Enacted by Chapter 242, 1985 General Session

31A-9-411 Transactions in which directors and others are interested.

Section 31A-5-414 applies to transactions in which directors and others are interested within

fraternals.

Enacted by Chapter 242, 1985 General Session

31A-9-412 Directors' liability and indemnification.

Section 31A-5-415 applies to directors' liability and indemnification in fraternals, except that the

word "mutual" shall be read "fraternal".

Enacted by Chapter 242, 1985 General Session

31A-9-413 Executive compensation.

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Section 31A-5-416 applies to executive compensation in fraternals, except that the word

"mutual" shall be read "fraternal."

Enacted by Chapter 242, 1985 General Session

31A-9-414 Exclusive agency contracts.

Section 31A-5-417 applies to exclusive agency contracts in fraternals.

Enacted by Chapter 242, 1985 General Session

Part 5

Corporate Reorganization

31A-9-501 Merger and consolidation of fraternals.

(1) Subject to compliance with Chapter 16, Insurance Holding Companies, any two or more

domestic fraternals may merge or consolidate under the provisions of Subsections (3) and (4).

(2) Subject to compliance with Chapter 16, Insurance Holding Companies, any two or more

domestic and nondomestic fraternals may merge or consolidate under the provisions of

Subsection (5).

(3) In addition to complying with Chapter 16, Insurance Holding Companies, the supreme

governing body of each domestic fraternal proposing to merge or consolidate shall:

(a) at least 60 days prior to the proposed action, submit the text of the proposed contract to its

members as provided in Subsection 31A-9-213(4);

(b) approve the proposed consolidation or merger by a two-thirds vote; and

(i) a certified copy of the written contract containing in full the terms and conditions of the

consolidation or merger;

(ii) a sworn statement by the president and secretary or corresponding officers of each fraternal

showing the financial condition of each on a date fixed by the commissioner, but no earlier

than the December 31 of the year preceding the proposed contract; and

(iii) evidence of compliance with Subsections (3)(a) and (b).

(4) The commissioner shall issue a certificate approving the merger or consolidation, upon a

finding that all of the following conditions exist:

(a) The contract conforms to the provisions of this chapter.

(b) The parties to the proposed contract have complied with the provisions of Subsection (3).

(5) When a nondomestic fraternal is a party to the proposed contract, the parties shall follow the

procedure for domestic fraternals under Subsections (3) and (4). However, the commissioner

may not issue a certificate of compliance until the parties file a certificate that the proposed

contract has been approved in the manner provided by the laws of the jurisdiction under

which the fraternal is incorporated, or, if those laws contain no procedure for approval, that the

proposed contract has been approved by the commissioner of insurance for that jurisdiction.

(6) The merger or consolidation is effective when the commissioner issues a certificate of approval.

(7) When the merger or consolidation is effective, the surviving or new fraternal has all the assets

and is liable for all of the obligations of each of the participating fraternals.

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Enacted by Chapter 242, 1985 General Session

31A-9-502 Voluntary dissolution of solvent domestic fraternals.

(1) Subject to this section, a domestic fraternal may voluntarily dissolve under Sections 16-6a-1401

through 16-6a-1405.

(2) The proposal for voluntary dissolution shall be filed with the commissioner at least 60 days

prior to the submission of that proposal to the supreme governing body or the members. The

commissioner may require the submission of additional information necessary to establish

the financial condition of the fraternal or other facts relevant to the proposed dissolution. If

the supreme governing body or the members adopt the resolution to dissolve, by a majority

of those voting or a larger number as required by the laws of the fraternal, the commissioner

shall, within 30 days after the adoption of the resolution, begin to examine the fraternal.

The commissioner shall approve the dissolution unless the commissioner finds, after the

examination and a hearing, that it is insolvent or may become insolvent in the process of

dissolution. Upon approval, the fraternal may provide for a transfer to other fraternals approved

by the commissioner of all its obligations under insurance policies and then may dissolve under

Subsection (1). If the commissioner disapproves, the commissioner shall petition the court for

liquidation under Section 31A-27a-207.

(3) During the liquidation under Sections 16-6a-1401 through 16-6a-1408, the fraternal may apply

to the commissioner to have the liquidation continued under the commissioner's supervision.

Upon receiving this request, the commissioner shall apply to the court for liquidation under

Section 31A-27a-207.

(4) If the fraternal revokes the voluntary dissolution proceedings under Section 16-6a-1404, a copy

of the revocation of voluntary dissolution proceedings shall be filed with the commissioner.

(5) Subsections 31A-5-504(6) and (7) apply to the survival of remedies and continuance of

corporate existence of a voluntarily dissolved fraternal.

Amended by Chapter 309, 2007 General Session

31A-9-503 Conversion of a fraternal to a mutual.

A domestic fraternal may be converted into a mutual, as follows:

(1) In addition to complying with the requirements of Chapter 16, Insurance Holding Companies,

the board or the supreme governing body shall adopt a plan of conversion stating:

(a) the reasons for and purposes of the proposed action;

(b) the proposed terms, conditions, and procedures and the estimated expenses of implementing

the conversion;

(d) the proposed articles and bylaws.

(2) If the board and the supreme governing body disagree on the conversion plan, the decision of

the supreme governing body prevails.

(3) The plan shall be filed with the commissioner for approval, together with any information under

Subsection 31A-5-204(2) the commissioner reasonably requires. The commissioner shall

approve the plan unless the commissioner finds, after a hearing, that it would be contrary to the

law, that the new mutual would not satisfy the requirements for a certificate of authority under

Section 31A-5-212, that the plan would be contrary to the interests of members or the public, or

that the applicable requirements of Chapter 16, Insurance Holding Companies, have not been

satisfied.

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(4) After being approved by the commissioner, the plan shall be submitted for approval to

the persons who were voting members on the date of the commissioner's approval under

Subsection (3). For approval of the plan, at least a majority of the votes cast shall be in favor of

the plan, or a larger number if required by the laws of the fraternal.

(5) The officers and directors of the fraternal shall be the initial officers and directors of the mutual.

(6) A copy of the resolution adopted under Subsection (4) shall be filed with the commissioner,

stating the number of members entitled to vote, the number voting, the method of voting, and

the number of votes cast in favor of the plan, stating separately the votes cast by mail and the

votes cast in person.

(7) If the requirements of the law are met, the commissioner shall issue a certificate of authority to

the new mutual. The fraternal then ceases its legal existence and the corporate existence of

the new mutual begins. However, the new mutual is considered to have been incorporated as

of the date the converted fraternal was incorporated. The new mutual has all the assets and is

liable for all of the obligations of the converted fraternal. The commissioner may grant a period

not exceeding one year for adjustment to the requirements of Chapter 5, Domestic Stock and

Mutual Insurance Corporations, specifying the extent to which particular provisions of Chapter

5, Domestic Stock and Mutual Insurance Corporations, do not apply.

(8) The corporation may not pay compensation other than regular salaries to existing personnel

in connection with the proposed conversion. With the commissioner's approval, payment

may be made at reasonable rates for printing costs and for legal and other professional

fees for services actually rendered in connection with the conversion. All expenses of the

conversion, including the expenses incurred by the commissioner and the prorated salaries of

any insurance office staff members involved, shall be paid by the corporation being converted.

Amended by Chapter 297, 2011 General Session

31A-9-504 Rehabilitation or involuntary conversion.

(1)

(a) If the commissioner believes that a fraternal does not satisfy the requirements of this chapter,

the commissioner shall call a hearing. If the commissioner then finds that the fraternal does

not satisfy the requirements:

(i) if the fraternal is domestic, the commissioner shall petition for rehabilitation under Section

31A-27a-207 to rehabilitate the fraternal or, if that is not possible, convert the fraternal to a

mutual; or

(ii) if the fraternal is nondomestic, the commissioner shall order it to comply as soon as

practicable with the requirements of this chapter or lose its tax exemption.

(b) An order issued under Subsection (1)(a)(ii) shall specify the ways the nondomestic fraternal

does not comply with this chapter.

(2) If the fraternal does not promptly comply with the requirements of this chapter, after notice of

the adverse results of a hearing under Subsection (1), it is subject to taxation as a mutual life

insurance company. This tax is retroactive to the date on which the commissioner gave the

fraternal notice of the hearing under Subsection (1).

Amended by Chapter 309, 2007 General Session

Part 6

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Page 187

Miscellaneous Provisions

31A-9-601 Tax exemption.

Every domestic and nondomestic fraternal is exempt from all state, county, district, municipal,

and school taxes or fees, except the fees required under Section 31A-3-103, and all the taxes and

special assessments on its real estate and office equipment.

Enacted by Chapter 242, 1985 General Session

31A-9-602 Fraternal expenditures and activities.

(1) Every fraternal shall report to the commissioner the information required by the commissioner

concerning expenditures made by the fraternal and other activities and programs of the

fraternal or its members in fulfillment of the purposes of Subsection 31A-9-101(1)(a)(ii)(B) or in

maintaining its fraternal character.

(2) A fraternal may create, maintain, and operate social, intellectual, educational, charitable,

benevolent, moral, fraternal, patriotic, or religious institutions for the benefit of its members or

their families or dependents or for children insured by the fraternal. For that purpose, it may

own, hold, or lease real or personal property within or outside of this state. All that property is

reported in the annual statement or an appendix to it, but the property is given only a nominal

value in the statement. No profit may be made on those institutions, but the income and

expenditures are reported separately in, or as an appendix to, the annual statement. Any of

these institutions may be separately incorporated under Title 16, Chapter 10a, Utah Revised

Business Corporation Act, and ownership of its stock shall be reported at a nominal value.

(3) The fraternal may not own or operate a funeral or undertaking establishment.

Amended by Chapter 4, 1993 General Session

31A-9-603 Exemption of fraternal benefits.

No money or other benefit, charity, relief, or aid to be paid, provided, or rendered by any

domestic or nondomestic fraternal is liable to attachment, garnishment, or other process, or may

be seized, taken, appropriated, or applied by any legal or equitable process or operation of law

to pay a debt or liability of a member or beneficiary, or any other person who may have a right to

them, either before or after their payment by the fraternal.

Enacted by Chapter 242, 1985 General Session

31A-9-604 Duties of officers, directors, agents, and employees.

Section 31A-5-601 applies to the duties of officers, directors, agents, and employees of

fraternals.

Enacted by Chapter 242, 1985 General Session

Chapter 10

Annuities

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Page 188

Part 2

Nontraditional Insurers

31A-10-201 Definition.

As used in this part:

(1) "Nontraditional insurer" means an insurer incorporated under Chapter 5, Domestic Stock and

Mutual Insurance Corporations, or admitted under Chapter 14, Foreign Insurers, that:

(a) exists for the purpose of aiding and strengthening the following by providing them with

annuities:

(i) nonprofit entities;

(ii) employees of nonprofit entities;

(iii) governmental entities; and

(iv) employees of governmental entities;

(b) issues only annuities and no other insurance product; and

investment, mortality, and morbidity.

(2) "Nontraditional insurer" does not include an insurer that provides annuities to persons other

than:

(a) nonprofit entities;

(b) employees of nonprofit entities;

(d) employees of governmental entities.

Amended by Chapter 230, 2003 General Session

31A-10-202 Purposes of part.

The purposes of this part are:

(1) to provide for the continued operation in this state, subject to the provisions of this title, of

nontraditional insurers providing annuities to the nonprofit entities and governmental entities of

this state and their employees; and

(2) to specify provisions which equitably deal with the operational, structural, and functional

differences between nontraditional insurers and other insurers, without compromising the

interests of policyholders.

Amended by Chapter 230, 2003 General Session

31A-10-203 Applicability of other provisions.

(1) Except as provided in this section, domestic nontraditional insurers are subject to the same

provisions applicable to other domestic insurers, and nondomestic nontraditional insurers are

subject to the same provisions applicable to other nondomestic insurers.

(2) Nontraditional insurers are not subject to:

(a) Section 31A-5-211;

(b) Section 31A-5-217;

(d) Chapter 17, Determination of Financial Condition;

(e) Chapter 18, Investments;

(f) Section 31A-20-106;

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Page 189

(g) Chapter 21, Insurance Contracts in General, if:

(i) their contract forms have been approved by the appropriate regulatory authorities in their

state of domicile; and

(ii) these contract forms are standard forms generally issued by those nontraditional insurers in

the United States;

(h) Chapter 22, Contracts in Specific Lines; or

(i) Chapter 28, Guaranty Associations.

Amended by Chapter 230, 2003 General Session

Chapter 11

Motor Clubs

31A-11-101 Prohibition of unauthorized motor clubs.

(1) No person may act as a motor club, except:

(a) a corporation authorized under Chapter 5, Domestic Stock and Mutual Insurance

Corporations, or Chapter 14, Foreign Insurers, which actually engages in the insurance of

automobiles against liability, physical damage, or both; or

(b) a corporation or division of a corporation authorized under this chapter.

(2) No person is acting as a motor club merely by offering travel-related services that do not

constitute insurance, or by arranging, through producers qualified under Chapter 23a,

Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries, for

insurance coverages underwritten by insurers authorized to do business in this state.

Amended by Chapter 298, 2003 General Session

31A-11-102 Activities of motor clubs.

(1) Motor clubs authorized under this chapter may provide or arrange for the following services:

(a) service as producer in obtaining insurance coverage from authorized insurers, subject to

Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance

Intermediaries;

(b) provision of, or payment for, legal services and costs in the defense of traffic offenses or

other legal problems connected with the ownership or use of a motor vehicle, provided the

maximum amount payable for any one incident is not more than 100 times the annual charge

for the motor club contract;

31A-11-112;

(d) payment of specified expenses resulting from an automobile accident, other than expenses

for personal injury or for damage to an automobile, provided the maximum amount payable

for any one accident is not more than 100 times the annual charge for the motor club contract;

(e) towing and emergency road services and theft services; and

(f) any services relating to travel not involving the transfer and distribution of risk.

(2) Unless they are also insurers under Chapter 5, Domestic Stock and Mutual Insurance

Corporations, or Chapter 14, Foreign Insurers, motor clubs may not provide any liability or

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Page 190

physical damage insurance or insurance of life or accident and health, whether or not related to

motor vehicles.

(3) If a motor club is a separate division of a corporation, the activities of the other divisions of the

corporation are not limited by this section, if the motor club division complies with Subsection

31A-11-106(3).

Amended by Chapter 298, 2003 General Session

31A-11-103 Rates.

(1) Rates charged to holders of motor club service contracts may not be inadequate, excessive, or

unfairly discriminatory.

(2) If, after a hearing, the commissioner finds a motor club's rates in violation of this section, the

commissioner may issue an order to the club to make a filing under Section 31A-19a-203. After

issuance of such an order, the commissioner and the club shall proceed under Chapter 19a,

Utah Rate Regulation Act, until the commissioner determines that the club's rates conform to

the requirements of this section. Chapter 19a, Utah Rate Regulation Act, is then inapplicable to

the club until the issuance of another order under this section.

Amended by Chapter 130, 1999 General Session

31A-11-104 Applicability of other portions of this title.

(1) In addition to this chapter, motor clubs are subject to the applicable sections of:

(a) Chapter 1, General Provisions, Chapter 2, Administration of the Insurance Laws, Chapter

4, Insurers in General, Chapter 16, Insurance Holding Companies, Chapter 21, Insurance

Contracts in General, Chapter 22, Contracts in Specific Lines, Chapter 26, Insurance

Adjusters, Chapter 27, Delinquency Administrative Action Provisions, and Chapter 27a,

Insurer Receivership Act;

(b) Chapter 3, Part 1, Funding the Insurance Department;

Compensation of Producers and Consultants; and

(d) Section 31A-23a-207.

(2) Sections 31A-14-204 and 31A-14-216 apply to nondomestic motor clubs.

(3) Section 31A-5-401 applies to domestic motor clubs.

(4) Sections 31A-5-105, 31A-5-106, and 31A-5-216 apply to both domestic and nondomestic motor

clubs.

(5) Both domestic and nondomestic motor clubs are subject to the department fees under Section

31A-3-103. Other provisions of this title apply to motor clubs only as specifically provided in

this chapter.

Amended by Chapter 309, 2007 General Session

31A-11-105 Application of Title 16 -- Incorporation of domestic motor clubs.

Domestic corporations acting or applying to act as a motor club under this chapter are subject

to Title 16, Chapter 10a, Utah Revised Business Corporation Act, if for profit, or Title 16, Chapter

6a, Utah Revised Nonprofit Corporation Act, if not for profit. The Division of Corporations and

Commercial Code in the Department of Commerce issues certificates of incorporation for domestic

corporations acting as motor clubs under this chapter, unless they are Chapter 5, Domestic Stock

and Mutual Insurance Corporations, corporations. This section does not negate the requirement

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Page 191

of a motor club obtaining a certificate of authority from the commissioner. Section 16-6a-301

does not apply to bar a not-for-profit motor club from organizing under Title 16, Chapter 6a, Utah

Revised Nonprofit Corporation Act.

Amended by Chapter 300, 2000 General Session

31A-11-106 Application for certificate of authority -- Deposit or bond.

(1) Any corporation may apply, in the form specified by the commissioner, for a certificate of

authority to transact a motor club business. The applicant shall include with the application any

documents the commissioner may reasonably require, the deposit described in Subsection (2),

which may be waived if net worth exceeds the deposit requirements, and the fee provided for in

Section 31A-3-103. No person may engage in the motor club business without complying with

this section and receiving a certificate of authority under Section 31A-11-107.

(2) The deposit required under Subsection (1) shall comply with the requirements of Section

31A-2-206, and is $100,000. In lieu of the deposit, the applicant may supply a bond of a

corporate surety authorized to do a surety business in this state, in the same sum and in a

form prescribed by the commissioner, payable to the state. The deposit, or the bond, shall

be conditioned upon the corporation's faithful performance in the sale or rendering of motor

club service under the provisions of this chapter, and the payment of fines, fees, or penalties

imposed on the motor club under this title. Any person with a claim against the deposit or bond

arising from the motor club's breach of the conditions of the deposit or bond may bring suit in

his own name to make a claim against the deposit or bond, or the commissioner may bring

suit on behalf of claimants. In no event shall the liability of the surety exceed the amount of the

bond, regardless of the number of claimants or claims made on the bond. Regardless of the

number of years the bond continues in force or the number of premiums payable or paid, the

limit of the surety's liability, specified as the amount of liability of the bond, is not cumulative

from year to year or from period to period. The bond shall be forfeited up to the amount of

actual damages sustained by any claimant or claimants. No cause of action shall be filed

against the bond after two years from the date of termination of the bond.

(3) If a motor club is a separate division of a corporation, the commissioner may increase the

deposit or bond requirements to take into account the increased risk created by the other

business of the corporation. However, the deposit or bond requirement may not be more than

twice the amounts required under Subsection (2).

Amended by Chapter 10, 1988 Special Session 2

31A-11-107 Issuance of certificate of authority -- Reinsurance of excess services.

(1) The commissioner shall issue a certificate applied for under Section 31A-11-106 if the

commissioner finds that:

(a) the corporation is able to negotiate, execute, and carry out the motor club business in a

sound, reliable, and ongoing manner;

(b) the reinsurance requirements of Subsection (2) are satisfied; and

(2) If a motor club provides legal expense service other than that authorized in Subsection

31A-11-102(1)(b), or other trip reimbursement service than that authorized in Subsection

31A-11-102(1)(d), or bail service other than that authorized under Section 31A-11-112, it

shall fully reinsure the excess service with an insurer authorized under Chapter 5, Domestic

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Page 192

Stock and Mutual Insurance Corporations, or Chapter 14, Foreign Insurers. That insurer

shall assume direct liability to the insured, and shall fully comply with Chapter 23a, Insurance

Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries.

Amended by Chapter 297, 2011 General Session

31A-11-108 Denial of certificate of authority.

If the commissioner declines or fails to issue a certificate of authority under Section 31A-11-107

within a reasonable time, he shall issue an order giving a reasonably detailed explanation for the

refusal or the delay.

Enacted by Chapter 242, 1985 General Session

31A-11-109 Alteration or revocation of certificate of authority.

If the commissioner issues an order under Chapter 27, Part 5, Administrative Actions, against

a motor club, the commissioner may revoke its certificate of authority or issue a new one with the

limits the commissioner considers necessary.

Amended by Chapter 309, 2007 General Session

31A-11-110 Registration of agents.

No person may execute, issue, or deliver any motor club service contract to any person or

receive anything of value for the contract either before or after its execution, unless he is registered

with the commissioner. A person is registered upon filing a statement including his name, home

and business address, telephone number, and motor club represented with the commissioner,

on a form prescribed by the commissioner, and upon payment of all the fees due under Section

31A-3-103. Registered persons shall give the commissioner notice of any change in registration

information.

Enacted by Chapter 242, 1985 General Session

31A-11-111 Reservation and registration of corporate name.

Sections 16-10a-402, 16-10a-403, and 42-2-5 apply to the reservation and registration of the

corporate name of motor clubs.

Amended by Chapter 277, 1992 General Session

31A-11-112 Bail for traffic violations.

(1) Any insurance company that is qualified to transact a surety business in Utah may contract to

become surety for any guaranteed arrest bond certificates issued by it or by a motor club, by

filing with the commissioner an undertaking to become surety. The undertaking shall be in a

form prescribed by the commissioner and shall state the following:

(a) The name and address of the motor club or clubs issuing the guaranteed arrest bond

certificates on which the company will be surety, and whether the motor club will issue the

certificates itself.

(b) The unqualified obligation of the company to be surety to pay, up to a specified dollar amount,

the fine or forfeiture of any person who fails to make an appearance to answer the charges for

which the guaranteed arrest bond certificate is posted.

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Page 193

(2) Any guaranteed arrest bond certificate under Subsection (1), when posted by the signatory,

shall be accepted in lieu of cash bail or other bond in an amount not exceeding the dollar

amount specified under Subsection (1)(b), to guarantee the appearance of the person when

required by any court in Utah when the person is arrested for violation of any Utah motor

vehicle law, or any motor vehicle ordinance of any Utah municipality, except for driving under

the influence of drugs or intoxicating liquors or for any felony. A law enforcement officer who

issues a citation to an operator of a vehicle who has a valid guaranteed arrest bond certificate

in his possession shall obtain the necessary information for the arrest citation, and if the

guaranteed arrest bond certificate covers the fine for the violation, the officer shall release the

vehicle and operator after serving the citation and receiving the guaranteed arrest bond from

the operator. The officer shall deliver the guaranteed arrest bond to the appropriate court to be

held as a bail bond.

(3) A guaranteed arrest bond certificate posted as a bail bond in a district court is subject to the

forfeiture and enforcement provisions which govern bail bonds in criminal cases. A guaranteed

arrest bond certificate posted as a bail bond in a justice court is subject to the forfeiture and

enforcement provisions of the charter or ordinance of the particular municipality which pertains

to bail bonds.

(4) A motor club may not agree to exonerate or indemnify an authorized surety issuing guaranteed

arrest bonds under Subsection (1) for losses in connection with these bonds.

Amended by Chapter 10, 1997 General Session

Amended by Chapter 215, 1997 General Session

31A-11-114 Reports in lieu of examination of motor club.

In lieu of all or any part of an examination of a motor club under this title, the commissioner may

accept the report of an:

(1) audit conducted by a certified public accountant; or

(2) examination made by a government agency.

Enacted by Chapter 344, 1995 General Session

Chapter 12

State Risk Management Fund

31A-12-101 Definitions.

As used in this chapter:

(1) "Risk Management Fund" means the fund created under Section 63A-4-201.

(2) "Risk manager" means the person appointed under Section 63A-4-101.5.

Amended by Chapter 33, 2021 General Session

31A-12-103 Rates charged to school districts.

The rates charged to school districts for policies issued under Section 63A-4-204 are not

subject to Chapter 19a, Utah Rate Regulation Act, except for the filing requirement of Subsection

31A-19a-203(1) and the public availability requirement of Section 31A-19a-204. Rate filing fees

under Section 31A-3-103 shall be paid to the department by the Risk Management Fund.

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Page 194

Amended by Chapter 130, 1999 General Session

31A-12-104 Insurance policies issued to school districts.

Insurance policies issued by the Risk Management Fund to school districts under Section

63A-4-204 shall conform to Chapter 21, Insurance Contracts in General, and Chapter 22,

Contracts in Specific Lines. Policy forms issued to the school district shall be filed under Section

31A-21-201. The policy form filing fees of Section 31A-3-103 shall be paid to the Insurance

Department by the Risk Management Fund.

Amended by Chapter 212, 1993 General Session

31A-12-105 Claim settlements with school districts.

Chapter 26, Insurance Adjusters, applies to the Risk Management Fund with respect to the

settlement of insurance claims made by school districts against this fund.

Enacted by Chapter 242, 1985 General Session

31A-12-107 Governmental immunity.

Notwithstanding any other provision of this title, a governmental entity is not an insurer for

purposes of this title and is not engaged in the business of insurance to the extent that it is:

(1) covering its own liabilities under Title 63G, Chapter 7, Governmental Immunity Act of Utah; or

(2) engaging in other related risk management activities related to the normal course of its

activities.

Amended by Chapter 382, 2008 General Session

Chapter 14

Foreign Insurers

Part 1

General Provisions

31A-14-101 Purposes of chapter.

This chapter's purposes are to:

(1) protect insureds, creditors, and the public by providing adequate standards and an orderly

procedure for the authorization of foreign insurers;

(2) subject foreign insurers doing an insurance business in Utah to the jurisdiction of the Utah

commissioner and courts; and

(3) provide Utah policyholders dealing with foreign insurers with regulatory protection equivalent to

that provided to Utah policyholders dealing with domestic insurers.

Enacted by Chapter 242, 1985 General Session

31A-14-102 Documents as evidence.

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Section 31A-5-105 applies to foreign insurers in Utah proceedings with respect to the use of

documents as evidence.

Amended by Chapter 204, 1986 General Session

31A-14-104 Reservation and registration of corporate name.

Section 31A-5-201 applies to foreign corporations with respect to the reservation and

registration of corporate names.

Amended by Chapter 204, 1986 General Session

31A-14-105 Authorized nondomestic insurers.

Except as otherwise provided, beginning July 1, 1986, this chapter applies to nondomestic

insurers authorized under former Title 31.

Enacted by Chapter 242, 1985 General Session

31A-14-106 Applicability of corporation provisions.

Except to the extent made applicable by reference under this title, Title 16, Chapter 6a, Utah

Revised Nonprofit Corporation Act, and Title 16, Chapter 10a, Utah Revised Business Corporation

Act, do not apply to insurers licensed under this chapter.

Amended by Chapter 340, 2011 General Session

Part 2

Authorization of Foreign Insurers

31A-14-201 Application.

(1)

(a) An incorporated person, other than a foreign health maintenance organization, authorized

as an insurer in another jurisdiction in the United States may apply under this section for a

certificate of authority as an insurer in this state.

(b) An alien insurer that is incorporated may apply under this section for a certificate of authority

as an insurer in this state.

(2) An applicant for a certificate of authority under this section shall:

(a) use the forms prescribed by the commissioner; and

(b) provide the information and documents the commissioner requests, including the following:

(i) a copy of the applicant's articles and bylaws;

(ii) financial statements for the most recent complete fiscal year, with an explanation of

the bases of all valuations and computations, in the detail reasonably required by the

commissioner;

(iii) a summary, as detailed as the commissioner reasonably requires, of the applicant's

financial history for:

(A) the preceding 10 years; or

(B) the entire period of the applicant's existence if less than 10 years;

(iv) for each of the applicant's current or proposed directors and principal officers:

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(A) the name of the director or principal officer;

(B) the address of the director or principal officer; and

(v) for an alien insurer:

(A) the name of its United States manager, the manager's addresses and occupations for the

preceding 10 years; and

(B) if the manager is a corporation, the names, addresses, and occupations of its directors

and principal officers, and its most recent detailed financial statements;

(vi) a schedule listing:

(A) all jurisdictions in which applicant has done or has been authorized to conduct an

insurance business during the preceding 10 years;

(B) all jurisdictions in which the applicant has applied for authorization to conduct an

insurance business during the preceding 10 years, and the dates and results of those

applications;

business during the preceding 10 years, and the reasons for its withdrawals; and

(D) the name of and the circumstances surrounding any officer, director, or controlling

shareholder of the corporation ever being subject to a:

(I) felony indictment or conviction; or

(II) civil, criminal, or administrative action alleging fraud;

(vii) a summary description of the applicant's present business operations, including the

coverages written and the states and countries in which it does business;

(viii) a list of any statements, reports, or other documents that have, within the last five years,

been generally transmitted or distributed to or among the insurer's creditors, shareholders,

members, subscribers, or policyholders;

(ix) if the applicant has been in the insurance business for less than 10 years, a summary of the

past and a projection of the anticipated operating results at the end of each year of the first

10 years of operation, based, where known, on actual data and otherwise on reasonable

assumptions of loss experience, premium and other income, operating expenses, and

acquisition costs;

(x) a statement that organizational and promotional expenses have been paid, and that

organizational procedures required by the insurer's domiciliary authority are complete;

(xi) a statement from the domiciliary regulatory authority and the state of entry into the United

States, if any, that so far as known, the applicant is sound and there are no legitimate

objections to its proposed operations in this state;

(xii) the plan for conducting an insurance business in this state, including:

(A) the geographical area where business is to be conducted;

(B) the types of insurance to be written;

(D) the proposed method for establishing premium rates; and

(E) copies of the policy and application forms to be used in this state;

(xiii) any other information the commissioner reasonably requires;

(xiv) authorization to the commissioner to make inquiry of any person about the applicant, its

manager under a management contract, its attorney in fact, its general agents, and any of

the officers, directors, or shareholders of any of them designated by the commissioner; and

(xv) written agreement by the applicant and any other designated persons that in the absence

of actual malice, no communication made in response to any inquiry under Subsection (2)

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(b)(xiv) will subject the person making it to an action for damages for defamation brought by

the applicant, the designated person, or a legal representative of either.

(3) No action for damages for defamation lies even in the absence of this agreement.

(4) Notwithstanding Subsection (2), the commissioner may exempt an applicant for a certificate of

authority from providing the information described in Subsection (2) if the commissioner finds

that the information will not be helpful in making the decision of whether to issue a certificate of

authority.

Amended by Chapter 116, 2001 General Session

31A-14-202 Certificate of authority.

(1) The commissioner shall either issue a certificate of authority to an applicant under Section

31A-14-201 or issue an order refusing the certificate which explains why he finds that:

(a) not all specific requirements of the law have been met, including the requirements of Section

31A-14-209 for an alien insurer;

(b) the applicant is not sound, reliable, entitled to public confidence, or cannot reasonably be

expected to perform its obligations continuously in the future;

manager, are not sufficiently trustworthy and competent to engage in the proposed business

in this state and to comply with the laws of this state; or

(d) the applicant has not been in existence long enough to demonstrate its competence to

engage in the proposed business in this state.

(2) If the commissioner finds that the applicant does not comply with all requirements of the law,

the commissioner may, after a hearing under Section 31A-2-301, issue a certificate of authority

if the purposes of each unsatisfied requirement and the protection of insureds, creditors, and

the public in this state are otherwise achieved by:

(a) a deposit in trust to be established and maintained under Section 31A-2-206;

(b) a bond acceptable to the commissioner conditioned on the satisfaction of the purposes of the

requirement;

(d) other protective devices satisfactory to the commissioner.

(3) The certificate of authority shall specify the terms of any deposit or bond required as a condition

for authorization, any limits placed on the insurer's business or methods of operation in this

state, and any other conditions imposed under Subsection (2).

(4) An insurer may apply to the commissioner for a new certificate of authority, removing, altering,

or adding limits on its business or methods of operation. The application shall be accompanied

by the information specified in Section 31A-14-201 that the commissioner reasonably requires.

The commissioner shall issue the new certificate as requested if he would do so if an initial

application were being made.

Amended by Chapter 204, 1986 General Session

31A-14-203 Admission of foreign fraternals.

(1) A foreign fraternal may apply for authorization to transact business in Utah, by filing with the

commissioner:

(a) a certified copy of its articles and bylaws;

(b) a power of attorney to the commissioner to receive service of process and other papers;

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to transact business in that jurisdiction;

(d) a copy of each of its contract forms;

(e) a statement of its business in the form required by the commissioner, showing that the

business of the fraternal substantially complies with all the provisions of law relating to similar

domestic fraternals; and

(f) other information the commissioner may reasonably request.

(2) The commissioner shall examine the applicant fraternal.

(3) The commissioner shall grant a certificate of authority to do business in Utah if the fraternal's

condition and practices protect the interests of potential insureds, creditors, and the public.

Enacted by Chapter 242, 1985 General Session

31A-14-204 Registered agent and registered office.

(1) Title 16, Chapter 17, Model Registered Agents Act, applies to the registered agent and service

of process on all foreign insurers authorized to do business in this state. Whenever the words

"Division of Corporations and Commercial Code" or "division" are used, they mean "insurance

commissioner."

(2) The principal office shall have sufficient personnel to provide information and assistance

to Utah insureds, unless the insurer informs policyholders on the policy or on other written

communications of a toll-free telephone connection accessible at normal business hours in this

state.

Amended by Chapter 364, 2008 General Session

31A-14-205 Requirements from other applicable chapters.

(1) A foreign insurer may not be authorized to do business in this state, unless it strictly complies

with the following requirements:

(a) Foreign insurers shall comply with the solvency standard set forth in Chapter 17, Part 6, Risk-

Based Capital, including maintenance of minimum capital or permanent surplus under Section

31A-5-211.

(b) A foreign insurer proposing to market securities in this state shall comply with Sections

31A-5-301, 31A-5-302, and 31A-5-305, unless this marketing is subject to United States

Securities and Exchange Commission regulation.

insurers. Section 16-6a-1507 applies to the change of name of foreign mutual insurers.

(d) Subsection 31A-5-203(2)(c) applies to other business of foreign mutual insurers.

(e) Subsection 31A-5-404(2), as modified by Subsection 31A-5-404(4), applies to

communications to shareholders, policyholders, or voting members of mutuals by foreign

insurers.

(f) Section 31A-5-413 applies to interlocking directorates of foreign insurers.

(g) Subsection 31A-5-203(2)(d) applies to assessment liability in foreign insurers issuing

assessable policies in any state.

(2) The commissioner may issue orders imposing and eliminating restrictions to foreign insurers

under Section 31A-5-103.

(3) After a hearing, the commissioner may by order apply any of the provisions of Sections

31A-5-307, 31A-5-414, 31A-5-418 to a foreign corporation after finding that it is necessary

for the protection of the interests of its insureds, creditors, or the public in this state. This

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Subsection (3) may be applied to a foreign insurer without a hearing if done under a reciprocal

agreement with the domiciliary regulatory authority.

(4) If any provision made applicable to a foreign insurer under this section conflicts with the law of

the insurer's domicile so that it is impossible for the corporation to comply with both laws, the

law of the domicile governs.

(5) This section does not excuse or exempt any foreign insurer from complying with the provisions

of this title which are otherwise applicable to a foreign insurer.

(6) This section does not apply to foreign fraternal insurers.

(7) If a licensed foreign insurer is in rehabilitation or liquidation proceedings or is found to be

insolvent in its state of domicile, the commissioner may, without hearing, suspend the insurer's

certificate of authority to do business in this state.

Amended by Chapter 300, 2000 General Session

31A-14-205.5 Place of business address information -- Record retention.

(1)

(a) A licensee under this chapter shall register and maintain with the commissioner:

(i) the address and the one or more telephone numbers of the licensee's principal place of

business; and

(ii) a valid business email address at which the commissioner may contact the licensee.

(b) A licensee shall notify the commissioner within 30 days of a change of any of the following

required to be registered with the commissioner under this section:

(i) an address;

(ii) a telephone number; or

(iii) a business email address.

(2)

(a) Except as provided under Subsection (3), a licensee under this chapter shall keep at the

address of the principal place of business registered under Subsection (1), separate and

distinct books and records of the transactions consummated under the Utah license.

(b) The books and records described in Subsection (2)(a) shall:

(i) be in an organized form; and

(ii) be available to the commissioner for inspection upon reasonable notice.

(i) if the licensee is a foreign insurer, alien insurer, commercially domiciled insurer, foreign title

insurer, or foreign fraternal:

(A) a record of each insurance contract procured by or issued through the licensee, with the

names of the one or more insureds, the amount of premium and commissions or other

compensation, and the subject of the insurance;

(B) the name of any other producer, surplus lines producer, limited line producer, consultant,

managing general agent, or reinsurance intermediary from whom business is accepted,

and of a person to whom commissions or allowances of any kind are promised or paid;

and

(ii) any additional information that:

(A) is customary for a similar business; or

(B) may reasonably be required by the commissioner by rule made in accordance with Title

63G, Chapter 3, Utah Administrative Rulemaking Act.

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(3) Subsection (2) is satisfied if the books and records specified in Subsection (2) can be obtained

immediately from a central storage place or elsewhere by online computer terminals located at

the registered address.

(4) A licensee who represents only a single insurer satisfies Subsection (2) if the insurer maintains

the books and records pursuant to Subsection (2) at a place satisfying Subsections (1) and (5).

(5)

(a) The books and records maintained under Subsection (2) shall be available for the inspection

of the commissioner during the business hours for a period of time after the date of the

transaction as specified by the commissioner by rule, made in accordance with Title 63G,

Chapter 3, Utah Administrative Rulemaking Act, but in no case for less than three calendar

years in addition to the current calendar year.

(b) Discarding a book or record after the applicable record retention period has expired does not

place the licensee in violation of a later-adopted longer record retention period.

Enacted by Chapter 168, 2017 General Session

31A-14-206 Commercially domiciled insurers.

(1) As used in this section, and except as to title insurers, the commissioner may consider a foreign

insurer to be "commercially domiciled" in this state if:

(a) during the three immediately preceding calendar years, the foreign insurer wrote more

insurance premiums in this state than it wrote in its state of domicile during the same period;

(b) during the same three-year period, the foreign insurer's gross premiums written in this state

constituted 15% or more of the insurer's total gross premiums written in the United States.

(2) Subject to Subsection (3), an insurer determined by the commissioner to be commercially

domiciled in this state may be subjected to Chapter 16, Insurance Holding Companies, Chapter

17, Determination of Financial Condition, Chapter 18, Investments, Chapter 27, Delinquency

Administrative Action Provisions, and Chapter 27a, Insurer Receivership Act, and Chapter 27a,

Part 4, Liquidation, Part 5, Asset Recovery, and Part 6, Claims, in the same manner and to the

same extent as domestic insurers. The commissioner shall, by order, notify any commercially

domiciled insurer not exempt under Subsection (3) of the extent to which the insurer is subject

to the provisions listed under this Subsection (2).

(3) The commissioner may exempt from the provisions of this section any commercially domiciled

insurer if the commissioner determines that the insurer has assets physically located in this

state or an asset to liability ratio sufficient to justify the conclusion that there is no reasonable

danger that the operations or conduct of the business of the insurer could present a danger of

loss to Utah policyholders.

(4) Subsection 31A-14-205(4) applies to the conflict of the laws of this state with the laws of the

insurer's domicile for foreign insurers, including commercially domiciled insurers, under this

section.

(5) This section does not excuse or exempt any foreign insurer from complying with the provisions

under this title which are otherwise applicable to a foreign insurer.

Amended by Chapter 309, 2007 General Session

31A-14-207 Exclusive agency and management contracts.

(1) No foreign insurer licensed under this chapter may enter into or be subject to a contract that

grants or surrenders the control or management of the insurer, unless the commissioner

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gives express approval of the contract. If amended, a contract previously approved under this

subsection must again receive the commissioner's express approval.

(2) No nondomestic insurer may enter into any contract giving a person the exclusive or dominant

right to produce the entire insurance business for the insurer in this state unless the contract

is filed with and approved by the commissioner. The contract is considered approved unless

disapproved by the commissioner within 30 days after the date of filing. The commissioner's

disapproval shall be delivered to the insurer in writing, stating the grounds for the disapproval.

(3) The commissioner may not approve an exclusive management or exclusive agency contract

under Subsection (1) or (2) which:

(a) subjects the insurer to excessive charges for expenses;

(b) vests in a person any control over the general affairs of the insurer to the exclusion of its

board of directors or officers;

(d) contains other inequitable provisions which may jeopardize the security of Utah policyholders.

Amended by Chapter 91, 1987 General Session

31A-14-208 Requirements for foreign reciprocals.

(1) No foreign reciprocal may be authorized to do business in this state unless:

(a) under the laws of its domicile, the provisions of its power of attorney, or otherwise, it can sue

and be sued in its own name;

(b) the assets resulting from the exchange of insurance contracts can be reached by its creditors;

and

(i) if it issues only nonassessable policies, it meets all the financial requirements for a mutual

corporation in similar circumstances, including unallocated surplus that is at least as great

as the level required under Chapter 17, Part 6, Risk-Based Capital; or

(ii) if it issues any assessable policies, it meets all the requirements for a mutual corporation

issuing assessable policies in similar circumstances and its subscribers are liable to the

exchange to the limit of their assessability without regard to the validity or collectibility of any

assessment levied against other subscribers.

(2) Any reciprocal admitted to Utah shall have a name that includes the word "reciprocal,"

"interinsurer," "interinsurance exchange," "underwriters," or "association." The name may not

suggest a corporate entity.

(3) The reciprocal may not be authorized to do business in Utah unless the contract with

its attorney in fact satisfies the requirements for a management contract under Section

31A-14-207.

(4) To the extent they are consistent with the nature of a reciprocal, the provisions of Chapter

5, Domestic Stock and Mutual Insurance Corporations, that are made applicable to foreign

mutual corporations by Section 31A-14-205 apply to foreign reciprocals, and the provisions

and requirements applicable to principal officers of corporations apply to the attorneys in fact of

reciprocal insurers.

(5) Except for life insurance and annuities, an authorized reciprocal may transact any kind of

insurance, including reinsurance subject to Section 31A-20-107.

Amended by Chapter 9, 1996 Special Session 2

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31A-14-209 Requirements for incorporated alien insurers.

(1) No incorporated alien insurer may be authorized to do business in Utah unless, in addition to

the requirements of Section 31A-14-201, it satisfies all of the following:

(a) It has operated for three years in its domicile or the commissioner finds other grounds for

being confident that it will be solid during its formative period.

(b) It supplies and commits itself to maintain in the United States a deposit or bond in an amount

the commissioner considers sufficient to protect the interests of insureds, creditors, and the

public in Utah.

its records, reports, and submission to examinations. This agreement shall include a

commitment to keep its records, reports, and other documents relevant to its United States

business constantly available in full in the English language, and to keep these records and

make its reports on its United States business in a form which satisfies the commissioner.

(2) A deposit under Subsection (1)(b) may be made as specified in Section 31A-2-206 or it may

be made in another state with a custodian approved by the commissioner. The deposit shall

be in trust for those persons the commissioner considers appropriate to protect the interests

of insureds, creditors, and the public in Utah. The custodian shall supply a certificate of the

deposit in the form and at the intervals reasonably required by the commissioner.

(3) A bond satisfies Subsection (1)(b) if it is issued by an insurer authorized to do a surety

business in Utah and is conditioned on nonperformance of any obligation to those persons

the commissioner considers appropriate in protecting the interests of insureds, creditors, and

the public in Utah. Each bond shall cover any claims that arise out of occurrences prior to the

termination of the bond, and may not be terminable on any ground without at least 30 days

notice to the commissioner. Each bond shall be in the form and be renewed at the intervals

reasonably required by the commissioner.

Enacted by Chapter 242, 1985 General Session

31A-14-210 Requirements for foreign fraternals.

(1) A foreign fraternal may not be authorized to do business in this state under Section

31A-14-203, unless it strictly complies with:

(a) the financial requirements of Section 31A-9-209 and Chapter 17, Part 6, Risk-Based Capital;

(b) the requirements of Section 16-6a-1506 and Subsection 31A-5-410(1)(a), the reporting

requirements of Subsection 31A-5-410(2), Section 31A-5-413 whenever removal is

made involuntarily under the laws of the domicile, Section 31A-9-202, and Subsections

31A-9-204(1)(c), 31A-9-402(2), and 31A-9-602(1); and

the requirements of Subsection 31A-9-213(2).

(2)

(a) No foreign fraternal may be authorized to do business in this state unless it substantially

complies with Sections 31A-5-217 and 31A-5-218, except that the approval requirement of

Subsection 31A-5-217(2) does not apply.

(b) When any corporate reorganization, transformation, or liquidation of a foreign fraternal, or any

levy to cover a deficiency under a law comparable to Subsection 31A-9-209(2), is formally

initiated by the fraternal, by the official act of the domiciliary commissioner, or by any other

official, the fraternal shall promptly give written notice to the commissioner.

(3) The commissioner may issue orders imposing and eliminating restrictions under Section

31A-9-103 that are applicable to foreign fraternals.

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(4)

(a) After a hearing, the commissioner may, by order, apply any of the provisions of Sections

31A-9-213, 31A-9-404, 31A-9-411, 31A-9-413, or Subsection 31A-5-415(2) to a foreign

fraternal after finding that it is necessary for the protection of the interests of its members,

creditors, or the public in this state.

(b) If any provision made applicable to the foreign fraternal under Subsection (4)(a) conflicts with

a provision of the law of the domicile, so that it is impossible for the fraternal to comply with

both, the law of the domicile governs.

Amended by Chapter 300, 2000 General Session

31A-14-211 Restrictions on foreign title insurers.

(1) An authorized foreign title insurer may only insure property in this state:

(a) through an agency title insurance producer who is a resident in Utah; or

(b) if the authorized foreign title insurer has a bona fide office in Utah:

(i) that is under the direction and control of the authorized foreign title insurer;

(ii) for which the authorized foreign title insurer pays the expenses, including compensation of

the employees of the bona fide office;

(iii) at which a person may request information about title services related to a real estate

transaction for which the person is a party;

(iv) at which a person may deliver written communications to the authorized foreign title insurer

as required by the real estate transaction for which the person is a party; and

(v) at which a person may deliver escrow money related to a real estate transaction for which

the person is a party.

(2) This section does not apply to reinsurance.

Amended by Chapter 319, 2013 General Session

31A-14-212 Changes in business plan.

(1) Within two years after the initial issuance of a certificate of authority to a foreign insurer by

its domiciliary jurisdiction, the insurer may not substantially deviate from its business plan

under Subsection 31A-14-201(2)(b)(xii) unless notice of the proposed action is filed with the

commissioner 30 days in advance of the proposed effective date.

(2) If the commissioner believes that the change proposed under Subsection (1) would be

contrary to Utah law or to the interests of insureds, creditors, or the public, he may prohibit

the application of the change to Utah. In his prohibitory order he shall explain why he has

prohibited the change.

(3) If the commissioner finds after a hearing that the application of the proposed change

outside Utah would endanger the interests of insureds, creditors, or the public in Utah, the

commissioner may revoke the insurer's certificate of authority unless the insurer agrees not to

make the change.

Amended by Chapter 116, 2001 General Session

31A-14-213 Transfer of business.

(1) A foreign insurer that intends to transfer to another person all or a substantial part of its

insurance business in Utah by means of an assumption reinsurance transaction, a sale,

or otherwise, shall report the proposed transaction to the commissioner not less than 30

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days before the proposed effective date. The commissioner may approve the transaction to

take effect immediately. Alternatively, the commissioner may defer the effective date of the

transaction for an additional period not exceeding 30 days, by written notice to the insurer

before the expiration of the initial 30-day period.

(2) The commissioner may, within the 30-day period or its extension, prohibit the proposed action if

it would be contrary to the law or to the interests of insureds, creditors, or the public in Utah.

Enacted by Chapter 242, 1985 General Session

31A-14-214 Amendment to articles and notice of corporate reorganization.

Sections 16-10a-1001 through 16-10a-1004 apply when a foreign insurer amends its articles

of incorporation. If a foreign insurer plans to undergo any corporate reorganization of the kinds

dealt with in Chapter 5, Part 5, Corporate Reorganization, the insurer shall notify the commissioner

in writing, at the same time that the first formal step of the statutory procedure for achieving the

reorganization is taken in the domiciliary jurisdiction or elsewhere. The insurer shall provide the

details required by the commissioner, whether by rule or order.

Amended by Chapter 90, 2004 General Session

31A-14-215 Assessment by foreign company.

Every foreign mutual insurer authorized in this state shall notify the commissioner immediately

after making an assessment upon any of its members in this state. The insurer shall attach to

the notice a statement of the condition of the insurer, giving the facts showing the necessity

for the assessment. Unless the commissioner orders otherwise under a Chapter 27, Part 5,

Administrative Actions, proceeding, a foreign mutual insurer authorized in this state may not make

or increase any assessment because of its inability to collect assessments from its members in

other states.

Amended by Chapter 309, 2007 General Session

31A-14-216 Release from regulation.

(1) A foreign insurer authorized under this chapter is subject to regulation under the applicable

provisions of the Insurance Code, unless it is released from regulation under this section.

(2) A foreign insurer may apply for release from regulation by filing with the commissioner:

(a) its certificate of authority;

(b) a schedule of its outstanding liabilities from policies issued in this state to residents of Utah or

on risks located in Utah, and from other business transactions in Utah;

(d) any other information as reasonably required by the commissioner.

(3) The commissioner shall promptly release the insurer from regulation if he finds all the following:

(a) The insurer has stopped doing any new business in Utah.

(b) The discharge of existing liabilities to creditors in Utah is sufficiently secured.

or, if the insurer is an alien insurer and Utah is the state of entry into the United States, of all

insureds and creditors in the United States.

(4) Before deciding on the release, the commissioner may require the insurer to notify, at its

own expense, all agents or other classes of potentially interested persons in a manner the

commissioner prescribes, including publication of its withdrawal from Utah. The notice shall

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advise affected persons to communicate to the commissioner any objections they may have to

the insurer's release from regulation.

(5) As a prerequisite for releasing the insurer, the commissioner may require a deposit under

Section 31A-2-206, a bond issued by a surety authorized in Utah, or other appropriate security

or reinsurance in a sufficient amount to secure the proper discharge of the insurer's remaining

liabilities in Utah. The commissioner may also require the insurer to sign an agreement to

remain subject to the jurisdiction of the commissioner and the courts of Utah with respect to any

matter arising out of business done in Utah prior to the release.

Enacted by Chapter 242, 1985 General Session

31A-14-217 Revocation of certificate of authority.

Whenever there would be grounds for delinquency proceedings under Chapter 27a, Insurer

Receivership Act, against a foreign insurer, if the foreign insurer were a domestic insurer, the

commissioner may, after any proceeding authorized by Title 63G, Chapter 4, Administrative

Procedures Act, revoke, suspend, or limit the foreign insurer's certificate of authority. This

action does not affect insurance which has already been issued. The insurer remains subject to

regulation until released under Section 31A-14-216.

Amended by Chapter 382, 2008 General Session

Chapter 15

Unauthorized Insurers, Surplus Lines, and Risk Retention Groups

Part 1

Unauthorized Insurers and Surplus Lines

31A-15-101 Purposes.

It is the purpose of this chapter to:

(1) prevent evasion by unauthorized insurers of the regulatory and tax laws of Utah and protect

Utah and its residents against loss from that type of evasion;

(2) subject unauthorized insurers and other persons doing an insurance business in Utah to the

jurisdiction of the Utah commissioner and courts;

(3) protect authorized insurers from unfair competition by unauthorized insurers; and

(4) provide an orderly method, under reasonable and practical safeguards, for procuring insurance

from unauthorized insurers.

Enacted by Chapter 242, 1985 General Session

31A-15-102 Assisting unauthorized insurers.

(1) No person may do any act enumerated under Subsection (2) who knows or should know that

the act may assist in the illegal placement of insurance with an unauthorized insurer or the

subsequent servicing of an insurance policy illegally placed with an unauthorized insurer.

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(2) An act performed by mail is performed both at the place of mailing and at the place of delivery.

Any of the following acts, whether performed by mail or otherwise, fall within the prohibition of

Subsection (1):

(a) soliciting, making, or proposing to make an insurance contract;

(b) taking, receiving, or forwarding an application for insurance;

(d) issuing or delivering an insurance policy or other evidence of an insurance contract except as

a messenger not employed by the insurer, or an insurance producer;

(e) doing any of the following in connection with the solicitation, negotiation, procuring, or

effectuation of insurance coverage for another: inspecting risks, setting rates, advertising,

disseminating information, or advising on risk management;

(f) publishing or disseminating any advertisement encouraging the placement or servicing

of insurance that would violate Subsection (1); however this provision does not apply to

publication or dissemination to an audience primarily outside Utah that also reaches persons

in Utah unless the extension to persons inside Utah can be conveniently avoided without

substantial expense other than loss of revenue; nor does it apply to regional or national

network programs on radio or television unless they originate in Utah;

(g) investigating, settling, adjusting, or litigating claims; or

(h) representing or assisting any person to do an unauthorized insurance business or to procure

insurance from an unauthorized insurer.

(3) Subsection (1) does not prohibit:

(a) an attorney acting for a client;

(b) a full-time salaried employee of an insured acting in the capacity of an insurance buyer or

manager; or

(4) Any act performed in Utah which is prohibited under this section constitutes appointment of

the commissioner or the lieutenant governor as agent for service of process under Sections

31A-2-309 and 31A-2-310.

(5) Any person or entity who knows or should know that the person's or entity's actions assist in the

illegal placement of insurance in violation of this section is guilty of a third degree felony.

Amended by Chapter 58, 2005 General Session

31A-15-103 Surplus lines insurance -- Unauthorized insurers.

(1) Notwithstanding Section 31A-15-102, when this state is the home state as defined in Section

31A-3-305, a nonadmitted insurer may make an insurance contract for coverage of a person in

this state and on a risk located in this state, subject to the limitations and requirements of this

section.

(2)

(a) For a contract made under this section, the insurer may, in this state:

(i) inspect the risks to be insured;

(ii) collect premiums;

(iii) adjust losses; and

(iv) do another act reasonably incidental to the contract.

(b) An act described in Subsection (2)(a) may be done through:

(i) an employee; or

(ii) an independent contractor.

(3)

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(a) Subsections (1) and (2) do not permit a person to solicit business in this state on behalf of an

insurer that has no certificate of authority.

(b) Insurance placed with a nonadmitted insurer shall be placed by a surplus lines producer

licensed under Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and

Reinsurance Intermediaries.

(i) pay or permit the payment, commission, or other remuneration on insurance placed by the

surplus lines producer under authority of the surplus lines producer's license to one holding

a license to act as an insurance producer; and

(ii) advertise the availability of the surplus lines producer's services in procuring, on behalf of a

person seeking insurance, a contract with a nonadmitted insurer.

(4) For a contract made under this section, a nonadmitted insurer is subject to Sections

31A-23a-402, 31A-23a-402.5, and 31A-23a-403 and the rules adopted under those sections.

(5) A nonadmitted insurer may not issue workers' compensation insurance coverage to an

employer located in this state, except:

(a) for stop loss coverage issued to an employer securing workers' compensation under

Subsection 34A-2-201(2);

(b) a cannabis production establishment as defined in Section 4-41a-102; or

(6)

(a) The commissioner may by rule prohibit making a contract under Subsection (1) for a specified

class of insurance if authorized insurers provide an established market for the class in this

state that is adequate and reasonably competitive.

(b) The commissioner may by rule place a restriction or a limitation on and create special

procedures for making a contract under Subsection (1) for a specified class of insurance if:

(i) there have been abuses of placements in the class; or

(ii) the policyholders in the class, because of limited financial resources, business experience,

or knowledge, cannot protect their own interests adequately.

(1) and all insurance producers from dealing with the insurer if:

(i) the insurer willfully violates:

(A) this section;

(B) Section 31A-4-102, 31A-23a-402, 31A-23a-402.5, or 31A-26-303; or

(ii) the insurer fails to pay the fees and taxes specified under Section 31A-3-301; or

(iii) the commissioner has reason to believe that the insurer is:

(A) in an unsound condition;

(B) operated in a fraudulent, dishonest, or incompetent manner; or

(d)

(i) The commissioner may issue one or more lists of nonadmitted foreign insurers whose:

(A) solidity the commissioner doubts; or

(B) practices the commissioner considers objectionable.

(ii) The commissioner shall issue one or more lists of nonadmitted foreign insurers the

commissioner considers to be reliable and solid.

(iii) In addition to the lists described in Subsections (6)(d)(i) and (ii), the commissioner may

issue other relevant evaluations of nonadmitted insurers.

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(iv) An action may not lie against the commissioner or an employee of the department for

a written or oral communication made in, or in connection with the issuance of, a list or

evaluation described in this Subsection (6)(d).

(e) A foreign nonadmitted insurer shall be listed on the commissioner's "reliable" list only if the

nonadmitted insurer:

(i) delivers a request to the commissioner to be on the list;

(ii) establishes satisfactory evidence of good reputation and financial integrity;

(iii)

(A) delivers to the commissioner a copy of the nonadmitted insurer's current annual statement

certified by the insurer and, each subsequent year, delivers to the commissioner a copy

of the nonadmitted insurer's annual statement within 60 days after the day on which the

nonadmitted insurer files the annual statement with the insurance regulatory authority

where the nonadmitted insurer is domiciled; or

(B) files the nonadmitted insurer's annual statements with the National Association of

Insurance Commissioners and the nonadmitted insurer's annual statements are available

electronically from the National Association of Insurance Commissioners;

(iv)

(A) is in substantial compliance with the solvency standards in Chapter 17, Part 6, Risk-Based

Capital, or maintains capital and surplus of at least $15,000,000, whichever is greater; or

(B) in the case of any "Lloyd's" or other similar incorporated or unincorporated group of alien

individual insurers, maintains a trust fund that:

(I) shall be in an amount not less than $50,000,000 as security to its full amount for all

policyholders and creditors in the United States of each member of the group;

(II) may consist of cash, securities, or investments of substantially the same character and

quality as those which are "qualified assets" under Section 31A-17-201; and

(III) may include as part of this trust arrangement a letter of credit that qualifies as

acceptable security under Section 31A-17-404.1; and

(v) for an alien insurer not domiciled in the United States or a territory of the United States, is

listed on the Quarterly Listing of Alien Insurers maintained by the National Association of

Insurance Commissioners International Insurers Department.

(7)

(a) Subject to Subsection (7)(b), a surplus lines producer may not, either knowingly or without

reasonable investigation of the financial condition and general reputation of the insurer, place

insurance under this section with:

(i) a financially unsound insurer;

(ii) an insurer engaging in unfair practices; or

(iii) an otherwise substandard insurer.

(b) A surplus line producer may place insurance under this section with an insurer described in

Subsection (7)(a) if the surplus line producer:

(i) gives the applicant notice in writing of the known deficiencies of the insurer or the limitations

on the surplus line producer's investigation; and

(ii) explains the need to place the business with that insurer.

line producer for at least five years.

(d) To be financially sound, an insurer shall satisfy standards that are comparable to those

applied under the laws of this state to an authorized insurer.

(e) An insurer on the "doubtful or objectionable" list under Subsection (6)(d) or an insurer not on

the commissioner's "reliable" list under Subsection (6)(e) is presumed substandard.

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(8)

(a) A policy issued under this section shall:

(i) include a description of the subject of the insurance; and

(ii) indicate:

(A) the coverage, conditions, and term of the insurance;

(B) the premium charged the policyholder;

(D) the name and address of the policyholder and insurer.

(b) If the direct risk is assumed by more than one insurer, the policy shall state:

(i) the names and addresses of all insurers; and

(ii) the portion of the entire direct risk each assumes.

statement: "The insurer issuing this policy does not hold a certificate of authority to do

business in this state and thus is not fully subject to regulation by the Utah insurance

commissioner. This policy receives no protection from any of the guaranty associations

created under Title 31A, Chapter 28, Guaranty Associations."

(9) Upon placing a new or renewal coverage under this section, a surplus lines producer shall

promptly deliver to the policyholder or the policyholder's agent evidence of the insurance

consisting either of:

(a) the policy as issued by the insurer; or

(b) if the policy is not available upon placing the coverage, a certificate, cover note, or other

confirmation of insurance complying with Subsection (8).

(10) If the commissioner finds it necessary to protect the interests of insureds and the public in

this state, the commissioner may by rule subject a policy issued under this section to as much

of the regulation provided by this title as is required for a comparable policy written by an

authorized foreign insurer.

(11)

(a) A surplus lines transaction in this state shall be examined to determine whether it complies

with:

(i) the surplus lines tax levied under Chapter 3, Department Funding, Fees, and Taxes;

(ii) the solicitation limitations of Subsection (3);

(iii) the requirement of Subsection (3) that placement be through a surplus lines producer;

(iv) placement limitations imposed under Subsections (6)(a), (b), and (c); and

(v) the policy form requirements of Subsections (8) and (10).

(b) The examination described in Subsection (11)(a) shall take place as soon as practicable

after the transaction. The surplus lines producer shall submit to the examiner information

necessary to conduct the examination within a period specified by rule.

(c)

(i) The examination described in Subsection (11)(a) may be conducted by the commissioner

or by an advisory organization created under Section 31A-15-111 and authorized by

the commissioner to conduct these examinations. The commissioner is not required

to authorize an additional advisory organization to conduct an examination under this

Subsection (11)(c).

(ii) The commissioner's authorization of one or more advisory organizations to act as examiners

under this Subsection (11)(c) shall be:

(A) by rule; and

(B) evidenced by a contract, on a form provided by the commissioner, between the authorized

advisory organization and the department.

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(d)

(i)

(A) A person conducting the examination described in Subsection (11)(a) shall collect a

stamping fee of an amount not to exceed 1% of the policy premium payable in connection

with the transaction.

(B) A stamping fee collected by the commissioner shall be deposited in the General Fund.

(ii) A stamping fee collected by an advisory organization is the property of the advisory

organization to be used in paying the expenses of the advisory organization.

(iii) Liability for paying a stamping fee is as required under Subsection 31A-3-303(1) for taxes

imposed under Section 31A-3-301.

(iv) The commissioner shall adopt a rule dealing with the payment of stamping fees. If a

stamping fee is not paid when due, the commissioner or advisory organization may impose

a penalty of 25% of the stamping fee due, plus 1-1/2% per month from the time of default

until full payment of the stamping fee.

(e) The commissioner, representatives of the department, advisory organizations,

representatives and members of advisory organizations, authorized insurers, and

surplus lines insurers are not liable for damages on account of statements, comments, or

recommendations made in good faith in connection with their duties under this Subsection

(11)(e) or under Section 31A-15-111.

(f) An examination conducted under this Subsection (11) and a document or materials related to

the examination are confidential.

(12)

(a) For a surplus lines insurance transaction in the state entered into on or after May 13, 2014, if

an audit is required by the surplus lines insurance policy, a surplus lines insurer:

(i) shall exercise due diligence to initiate an audit of an insured, to determine whether additional

premium is owed by the insured, by no later than six months after the expiration of the term

for which premium is paid; and

(ii) may not audit an insured more than three years after the surplus lines insurance policy

expires.

(b) A surplus lines insurer that does not comply with this Subsection (12) may not charge or

collect additional premium in excess of the premium agreed to under the surplus lines

insurance policy.

Amended by Chapter 327, 2023 General Session

31A-15-104 Direct placement of insurance.

(1) Subject to this section, any person seeking insurance may obtain it from an unauthorized

insurer if no producer resident doing business in Utah is involved and if negotiations occur

primarily outside Utah. Negotiations by mail occur within Utah if a letter or other document

containing insurance-related solicitations or negotiations is sent from or to a Utah address.

Negotiations by telephone take place within Utah if one of the parties to the conversation is in

Utah.

(2) Each policyholder who procures or renews insurance otherwise subject to this code from any

insurer not authorized to do business in Utah, other than insurance procured under Section

31A-15-103 and the renewal of guaranteed renewable insurance lawfully issued outside Utah,

shall within 60 days after the insurance is procured or renewed, report to the commissioner in

the form required by the commissioner and pay the taxes specified by Section 31A-3-301.

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(3)

(a) Any insurance on personal property sold on the installment plan, under a conditional sales

contract, or an equivalent security agreement under the Uniform Commercial Code which

charges the buyer, as a part of the consideration in the agreement of sale for insurance on

the property, shall be placed with an insurer authorized to do business in Utah.

(b) Whenever the law of Utah requires a person to purchase insurance on risks in Utah, it shall

be obtained from an insurer authorized to do business in Utah, or under Section 31A-15-103.

Amended by Chapter 298, 2003 General Session

31A-15-105 Effect of contracts illegal because insurer was unauthorized.

(1) An insurance contract entered into in violation of this chapter is unenforceable by, but

enforceable against, the insurer. In an action against the insurer on the contract, the insured is

bound by the terms of the contract as affected by this title and rules adopted under this title.

(2) An insurance policy entered into in violation of this chapter is voidable by the policyholder who

entered into the transaction without knowing it was illegal. The policyholder may avoid the

contract by notice to the insurer, if no insured has enforced the contract by an action under

Subsection (1), and may recover any consideration paid under the contract.

(3) Any person who assisted in the procurement of an illegal contract under this chapter, and

who knew or should have known the transaction was illegal, is liable to the insured for the full

amount of a claim or loss payable under the contract, if the insurer does not pay it. The receiver

appointed under Chapter 27a, Insurer Receivership Act, may assert the claims of insureds if the

insurer is the subject of a proceeding under Chapter 27a, Insurer Receivership Act.

Amended by Chapter 309, 2007 General Session

31A-15-106 Servicing of contracts made out of state.

(1) A foreign insurer that does not have a certificate of authority to do business in this state under

Section 31A-14-202 may, in this state, collect premiums and adjust losses and do all other acts

reasonably incidental to contracts made outside this state without violating this chapter. Any

premiums collected under this section are subject to Section 31A-3-301.

(2) Subsection (1) does not permit a renewal, extension, increase, or other substantial change in

the terms of any contract under Subsection (1) unless:

(a) it is permitted under Section 31A-15-103;

(b) the contract is for life or accident and health insurance or annuities; or

and the public appear to be sufficiently protected.

Amended by Chapter 116, 2001 General Session

31A-15-107 Defense of action by unauthorized person.

(1) Except under Subsection (3), no pleading, notice, order, or process in any action in court or

in any administrative proceeding before the commissioner instituted against an unauthorized

person under Sections 31A-2-309 and 31A-2-310 may be filed by or on behalf of the

unauthorized person unless one of the following conditions exists:

(a) The unauthorized person deposits with the clerk of the court in which the action or proceeding

is pending, or with the commissioner in administrative proceedings, cash, securities, or a

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bond with sureties in an amount fixed by the court or the commissioner, sufficient to secure

the payment or performance of any probable final judgment or order.

(b) That person procures proper authorization to do an insurance business in Utah.

funds or securities, in a state of the United States, in trust or otherwise, which are readily

available and adequate to satisfy any probable final judgment or to perform in accordance

with any order.

(2) The court in any action or proceeding under this section, or the commissioner in any

administrative proceeding under this section, may order any postponement he considers

necessary to give the unauthorized person a reasonable opportunity to comply with Subsection

(1).

(3) Subsection (1) does not prevent an unauthorized person from filing a motion to quash a writ or

to set aside service on the ground that the person has not done any of the acts specified under

Subsection 31A-15-102(2).

Enacted by Chapter 242, 1985 General Session

31A-15-108 Attorney fees.

In an action against an unauthorized person upon a contract of insurance issued in violation

of this chapter, if the unauthorized person fails to make payment in accordance with the contract

for 30 days after the payment is due and demand is made, and it appears to the court that the

failure was without just cause, the court may allow the plaintiff a reasonable attorney's fee and may

include the fee in any judgment that may be rendered in the action. The unauthorized person's

failure to defend this action is prima facie evidence that the failure to pay was without just cause.

Enacted by Chapter 242, 1985 General Session

31A-15-109 Investigation and disclosure of insurance contracts.

Whenever the commissioner has reason to believe that insurance has been effectuated by

or for any person in Utah with an unauthorized insurer, the commissioner may, in writing, order

the person to produce for examination all insurance contracts and other documents evidencing

insurance with both authorized and unauthorized insurers and to disclose to the commissioner the

amount of insurance, the name and address of each insurer, the gross amount of premium, and

the name and address of any person who has assisted in effecting the insurance.

Enacted by Chapter 242, 1985 General Session

31A-15-110 Reporting of illegal insurance.

(1) Every person investigating or adjusting any loss or claim on a subject of insurance in this state

shall immediately report to the commissioner every insurance policy or contract connected with

the investigation or settlement, which the person has reason to believe has been entered into

illegally by any insurer not authorized to transact business in this state.

(2) Every person acting as an insurance consultant shall immediately report to the commissioner

every insurance policy or contract covering a subject of insurance in this state, which the

consultant has reason to believe has been entered into illegally by an insurer not authorized to

transact that type of insurance in this state.

Amended by Chapter 204, 1986 General Session

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31A-15-111 Surplus lines advisory organizations.

(1) Advisory organizations of surplus lines producers may be formed to:

(a) facilitate and encourage compliance by its members with the laws of this state and the rules

of the commissioner relative to surplus lines insurance;

(b) if authorized by the commissioner, perform and report to the commissioner on the

confidential examinations and assess and receive the stamping fees described in Subsection

31A-15-103(11);

under Subsection 31A-15-103(6)(a) is appropriate;

(d) investigate "abuses of placements," as described in Subsection 31A-15-103(6)(b), and

provide recommendations to the commissioner concerning rules under Subsection

31A-15-103(6)(b);

(e) bring to the commissioner's attention the existence of grounds for issuing an order under

Subsection 31A-15-103(6)(c) concerning a particular unauthorized insurer;

(f) provide recommendations to the commissioner concerning unauthorized insurers which

should be listed on a "doubtful or objectionable" list under Subsection 31A-15-103(6)(d);

(g) provide comments to the commissioner concerning whether an unauthorized insurer has a

good reputation and financial integrity under Subsection 31A-15-103(6)(d)(ii);

(h) provide recommendations to the commissioner concerning rules under Subsection

31A-15-103(10) necessary to protect the interests of insureds and the public; and

(i) receive and disseminate to its members information relative to surplus lines coverages.

(2) Every advisory organization formed under this section shall file with the commissioner:

(a) a copy of its constitution, articles of agreement or association or articles of incorporation, and

any amendments to these documents;

(b) a copy of its bylaws and any other writing governing the organization's activities and any

amendments to these documents;

the commissioner or processes issued at his direction may be served, with changes in this list

to be filed within 10 days of a change; and

(d) an agreement, on a form provided by the commissioner and executed by the advisory

organization, that the commissioner may examine the advisory organization in accordance

with the provisions of Sections 31A-2-203, 31A-2-204, and 31A-2-205.

(3) The commissioner may by rule or order require each person licensed as a surplus lines

producer under Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and

Reinsurance Intermediaries, to be a member of one or more specified advisory organizations

operating under this section. The commissioner may make compliance with the rule or order a

condition to continued licensure as a surplus lines producer.

(4) The comments and recommendations given the commissioner under Subsection (1) are merely

advisory. The formation of an advisory organization under this section does not alter the

commissioner's authority under this chapter.

Amended by Chapter 298, 2003 General Session

Part 2

Risk Retention Groups Act

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Page 214

31A-15-201 Short title.

This part shall be known as the "Risk Retention Groups Act."

Enacted by Chapter 258, 1992 General Session

31A-15-202 Definitions.

As used in this part:

(1) Notwithstanding Section 31A-1-301, "commissioner" means the insurance commissioner of

Utah or the commissioner, director, or superintendent of insurance in another state.

(2)

(a) Subject to Subsection (2)(b), "completed operations liability" means liability arising out of the

installation, maintenance, or repair of any product at a site that is not owned or controlled by:

(i) any person who performs that work; or

(ii) any person who hires an independent contractor to perform that work.

(b) "Completed operations liability" includes liability for an activity that is completed or abandoned

before the date of the occurrence giving rise to the liability.

(3) "Domicile," for purposes of determining the state in which a purchasing group is domiciled,

means:

(a) for a corporation, the state in which the purchasing group is incorporated; and

(b) for an unincorporated entity, the state of its principal place of business.

(4) "Hazardous financial condition" means that a risk retention group, based on its present or

reasonably anticipated financial condition, although not yet financially impaired or insolvent, is

unlikely to be able:

(a) to meet obligations to policyholders with respect to known claims and reasonably anticipated

claims; or

(b) to pay other obligations in the normal course of business.

(5) "Insurance" means primary insurance, excess insurance, reinsurance, surplus lines insurance,

and any other arrangement for shifting and distributing risk which is determined to be insurance

under the laws of this state.

(6)

(a) "Liability" means legal liability for damages, including costs of defense, legal costs and fees,

and other claims expenses because of injuries to other persons, damage to their property, or

other damage or loss to other persons resulting from or arising out of:

(i) any business, whether profit or nonprofit, trade, product, services, including professional

services, premises, or operations; or

(ii) any activity of any state or local government or any agency or political subdivision of any

state or local government.

(b) "Liability" does not include personal risk liability and an employer's liability with respect to its

employees other than legal liability under the Federal Employers' Liability Act, 45 U.S.C. Sec.

51 et seq.

(7) "Personal risk liability" means liability for damages because of injury to any person, damage

to property, or other loss or damage resulting from any personal, familial, or household

responsibilities or activities, rather than from responsibilities or activities referred to in

Subsection (6).

(8) "Plan of operation" or "feasibility study" means an analysis that presents the expected activities

and results of a risk retention group, including at a minimum:

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(a) information sufficient to verify that its members are engaged in businesses or activities similar

or related with respect to the liability to which the members are exposed by virtue of any

related, similar or common business, trade, product, services, premises or operations;

(b) for each state in which it intends to operate, the coverages, deductibles, coverage limits,

rates, and rating classification systems for each line of insurance the group intends to offer;

similar exposures to the extent that this experience is reasonably available;

(d) pro forma financial statements and projections;

(e) appropriate opinions by a qualified, independent casualty actuary, including a determination

of minimum premium or participation levels required to commence operations and to prevent

a hazardous financial condition;

(f) identification of management, underwriting and claims procedures, marketing methods,

managerial oversight methods, investment policies, and reinsurance agreements;

(g) identification of each state in which the risk retention group has obtained, or sought to obtain,

a charter and license, and a description of its status in each such state; and

(h) any other matters required by the commissioner of the state in which the risk retention group

is chartered for liability insurance companies authorized by the insurance laws of that state.

(9)

(a) "Product liability" means liability for damages because of any personal injury, death,

emotional harm, consequential economic damage, or property damage, including damages

resulting from the loss of use of property arising out of the manufacture, design, importation,

distribution, packaging, labeling, lease, or sale of a product.

(b) "Product liability" does not include the liability of any person for those damages described

in Subsection (9)(a) if the product involved was in the possession of the person when the

incident giving rise to the claim occurred.

(10) "Purchasing group" means any group that:

(a) has as one of its purposes the purchase of liability insurance on a group basis;

(b) purchases liability insurance only for its group members and only to cover their similar or

related liability exposure, as described in Subsection (10)(c);

to the liability to which members are exposed by virtue of any related, similar, or common

business, trade, products, services, premises, or operations; and

(d) is domiciled in any state.

(11) "Risk retention group" means any corporation or other limited liability association:

(a) whose primary activity consists of assuming and spreading all, or any portion of, the liability

exposure of its group members;

(b) which is organized for the primary purpose of conducting the activity described under

Subsection (11)(a);

(i) is chartered and licensed as a liability insurance company and authorized to engage in the

business of insurance under the laws of any state; or

(ii)

(A) before January 1, 1985, was chartered or licensed and authorized to engage in the

business of insurance under the laws of Bermuda or the Cayman Islands and, before

January 1, 1985, had certified to the insurance commissioner of at least one state that it

satisfied the capitalization requirements of that state;

(B) except that any group as described in Subsection (11)(c)(ii)(A) shall be considered to be a

risk retention group only if it has been engaged in business continuously since January 1,

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1985, and only for the purpose of continuing to provide insurance to cover product liability

or completed operations liability, as these terms were defined in the Product Liability Risk

Retention Act of 1981 before the date of the enactment of the Liability Risk Retention Act

of 1986;

(d) that does not exclude any person from membership in the group solely to provide for

members of the group a competitive advantage over the excluded person;

(e) that:

(i) has as its owners only persons who comprise the membership of the risk retention group and

who are provided insurance by the group; or

(ii) has as its sole owner an organization that has as:

(A) its members only persons who comprise the membership of the risk retention group; and

(B) its owners only persons who comprise the membership of the risk retention group and

who are provided insurance by the group;

(f) whose members are engaged in businesses or activities similar or related with respect to

the liability to which the members are exposed by virtue of any related, similar, or common

business trade, products, services, premises or operations;

(g) whose activities do not include providing insurance other than:

(i) liability insurance for assuming and spreading all or any portion of the liability of its group

members; and

(ii) reinsurance with respect to the liability of any other risk retention group, or any members of

the other group, which is engaged in businesses or activities so that the group or member

meets the requirement described in Subsection (11)(f) for membership in the risk retention

group which provides the reinsurance; and

(h) the name of which includes the phrase "risk retention group."

(12) "State" means:

(a) a state of the United States; or

(b) the District of Columbia.

Amended by Chapter 138, 2016 General Session

31A-15-203 Risk retention groups chartered in this state.

(1) As used in this section:

(a) "Board of directors" or "board" means the governing body of the risk retention group elected

by the shareholders or members to establish policy, elect or appoint officers and committees,

and make other governing decisions.

(b) "Director" means a natural person designated in the articles of the risk retention group, or

designated, elected, or appointed by any other manner, name, or title to act as a director.

(2)

(a) A risk retention group under this part shall be chartered and licensed to write only liability

insurance pursuant to this part and, except as provided elsewhere in this part, shall comply

with all of the laws, rules, and requirements that apply to liability insurers chartered and

licensed in this state, and with Section 31A-15-204 to the extent the requirements are not a

limitation on other laws, rules, or requirements of this state.

(b) Notwithstanding any other provision to the contrary, all risk retention groups chartered

in this state shall file with the commissioner and the National Association of Insurance

Commissioners an annual statement in a form prescribed by the commissioner and

completed in accordance with the statement instructions and the National Association of

Insurance Commissioners Accounting Practices and Procedures Manual.

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(3) Before it may offer insurance in any state, each risk retention group shall also submit for

approval to the commissioner of this state a plan of operation or feasibility study. The risk

retention group shall submit an appropriate revision of the plan or study in the event of any

subsequent material change in any item of the plan of operation or feasibility study within

10 days of any change. The group may not offer any additional kinds of liability insurance,

in this state or in any other state, until any revision of the plan or study is approved by the

commissioner.

(4)

(a) At the time of filing its application for charter, the risk retention group shall provide to the

commissioner in summary form the following information:

(i) the identity of the initial members of the group;

(ii) the identity of those individuals who organized the group or who will provide administrative

services or otherwise influence or control the activities of the group;

(iii) the amount and nature of initial capitalization;

(iv) the coverages to be afforded; and

(v) the states in which the group intends to operate.

(b) Upon receipt of this information, the commissioner shall forward the information to the

National Association of Insurance Commissioners. Providing notification to the National

Association of Insurance Commissioners is in addition to, and may not be sufficient to satisfy,

the requirements of Section 31A-15-204 or any other sections of this part.

(5) The governance standards for risk retention groups are as follows:

(a) A risk retention group that exists as of May 10, 2016, shall be in compliance with the

governance standards described in this Subsection (5) by no later than May 10, 2017. A risk

retention group licensed on or after May 10, 2016, shall be in compliance with the governance

standards described in this Subsection (5) at the time of licensure.

(b) The board of directors of a risk retention group shall have a majority of independent directors.

If the risk retention group is a reciprocal:

(i) the attorney-in-fact is required to adhere to the same standards regarding independence of

operation and governance as imposed on the risk retention group's board of directors and

subscribers advisory committee under these standards; and

(ii) to the extent permissible under state law, service providers of a reciprocal risk retention

group shall contract with the risk retention group and not the attorney-in-fact.

determines that the director has no material relationship with the risk retention group. Each

risk retention group shall disclose these determinations to its domestic regulator, at least

annually. For this purpose, any person who is a direct or indirect owner of, or subscriber in,

the risk retention group or is an officer, director, or employee of the owner and insured, is

considered to be independent, unless some other position of the officer, director, or employee

constitutes a material relationship, as contemplated by Section 3901(a)(4)(E)(ii) of the Liability

Risk Retention Act.

(d) Material relationship of a person with the risk retention group includes the following:

(i) A material relationship exists if the person receives in any one 12-month period

compensation or payment of any other item of value by the person, a member of the

person's immediate family, or a business with which the person is affiliated, from the risk

retention group or a consultant or service provider to the risk retention group is greater than

the greater of the following as measured at the end of any fiscal quarter falling in the 12-

month period:

(A) 5% of the risk retention group's gross written premium for the 12-month period; or

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(B) 2% of the risk retention group's surplus.

(ii) The person or immediate family member of the person is not independent until one year

after the person's compensation from the risk retention group falls below the threshold

outlined in Subsection (5)(d)(i).

(iii) A material relationship exists if a director or an immediate family member of a director is

affiliated with or employed in a professional capacity by a present or former internal or

external auditor of the risk retention group.

(iv) The director or immediate family member of a director described in Subsection (5)(d)(iii)

is not independent until one year after the end of the affiliation, employment, or auditing

relationship.

(v) A material relationship exists if the director or immediate family member of a director who

is employed as an executive officer of another company where any of the risk retention

group's present executives serve on that other company's board of directors is not

independent until one year after the end of the service or the employment relationship.

(e)

(i) The term of any material service provider contract with the risk retention group may not

exceed five years. A material service provider contract, or its renewal, shall require the

approval of the majority of the risk retention group's independent directors. The service

provider contract is considered material if the amount to be paid for the contract is greater

than or equal to the greater of:

(A) 5% of the risk retention group's annual gross written premium; or

(B) 2% of the risk retention group's surplus.

(ii) For purposes of Subsection (5)(e)(i), "service provider" includes a captive manager, auditor,

accountant, actuary, investment advisor, lawyer, managing general underwriter, or other

party responsible for underwriting, determining rates, collecting premiums, adjusting and

settling claims, or preparing financial statements. A reference to "lawyer" in this Subsection

(5)(e)(ii) does not include defense counsel retained by the risk retention group to defend

claims, unless the amount of fees paid to the lawyer is "material" as referenced in Section

(5)(e)(i).

(iii) A service provider contract meeting the definition of material relationship contained in

Section (5)(d) may not be entered into unless the risk retention group has, at least 30 days

before entering into the service provider contract, notified the commissioner in writing of its

intention to enter into the transaction and the commissioner has not disapproved it within the

30-day period.

(iv) The risk retention group's board of directors shall have the right to terminate any service

provider, audit contract, or actuarial contract at any time for cause after providing adequate

notice as defined in the contract.

(f) The risk retention group's board of directors shall adopt a written policy in the plan of operation

as approved by the board that requires the board to:

(i) assure that an owner of the risk retention group receive evidence of ownership interest;

(ii) develop a set of governance standards applicable to the risk retention group;

(iii) oversee the evaluation of the risk retention group's management including the performance

of the captive manager, managing general underwriter, or one or more other parties

responsible for underwriting, determining rates, collecting premiums, adjusting or settling

claims, or preparing financial statements;

(iv) review and approve the amount to be paid for all material service providers; and

(v) review and approve at least annually:

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(A) the risk retention group's goals and objectives relevant to the compensation of officers and

service providers;

(B) the officers' and service providers' performance in light of those goals and objectives; and

(g)

(i) A risk retention group shall have an audit committee composed of at least three independent

board members as defined in Subsection (5)(c). A non-independent board member may

participate in the activities of the audit committee, if invited by the members of the audit

committee, but cannot be a member of the audit committee.

(ii) The audit committee shall have a written charter that defines the audit committee's purpose,

which, at a minimum, shall be to:

(A) assist the board's oversight of the integrity of the financial statements, the compliance with

legal and regulatory requirements, and the qualifications, independence, and performance

of the independent auditor and actuary;

(B) discuss the annual audited financial statements and quarterly financial statements with

management;

advisable, discuss its quarterly financial statements with its independent auditor;

(D) discuss policies with respect to risk assessment and risk management;

(E) meet separately and periodically, either directly or through a designated representative of

the committee, with management and the independent auditor;

(F) review with the independent auditor any audit problems or difficulties and management's

response;

(G) set clear hiring policies of the risk retention group as to the hiring of employees or former

employees of the independent auditor;

(H) require the external auditor to rotate the lead or coordinating audit partner having primary

responsibility for the risk retention group's audit as well as the audit partner responsible

for reviewing that audit so that neither individual performs audit services for more than five

consecutive fiscal years; and

(I) report regularly to the board of directors.

(iii) The domestic regulator may waive the requirement to establish an audit committee

composed of independent board members if the risk retention group is able to demonstrate

to the domestic regulator that it is impracticable to do so and the risk retention group's board

of directors itself is otherwise able to accomplish the purposes of an audit committee, as

described in this Section (5)(g).

(h) The board of directors shall adopt and disclose governance standards, where "disclose"

means making such information available through election, including posting the information

on the risk retention group's website or other means, and providing such information to

owners upon request, which shall include:

(i) a process by which the directors are elected by the owners;

(ii) director qualification standards;

(iii) director responsibilities;

(iv) director access to management and, as necessary and appropriate, independent advisors;

(v) director compensation;

(vi) director orientation and continuing education;

(vii) the policies and procedures that are followed for management succession; and

(viii) the policies and procedures that are followed for annual performance evaluation of the

board.

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(i) The board of directors shall adopt and disclose a code of business conduct and ethics for

directors, officers, and employees and promptly disclose to the board of directors any waivers

of the code for directors or executive officers, which shall include the following topics:

(i) conflicts of interest;

(ii) matters covered under the corporate opportunities doctrine under the state of domicile;

(iii) confidentiality;

(iv) fair dealing;

(v) protection and proper use of risk retention group assets;

(vi) compliance with all applicable laws, rules, and regulations; and

(vii) requiring the reporting of any illegal or unethical behavior that affects the operation of the

risk retention group.

(j) A captive manager, president, or chief executive officer of a risk retention group shall promptly

notify the domestic regulator in writing if the captive manager, president, or chief executive

officer becomes aware of any material non-compliance with any of the governance standards

in this Subsection (5).

Amended by Chapter 138, 2016 General Session

31A-15-204 Risk retention groups not chartered in this state -- Designation of commissioner

as agent -- Compliance with unfair claims settlement practices act -- Deceptive, false, or

fraudulent practices -- Examination regarding financial condition -- Prohibitions -- Penalties

-- Operation prior to enactment of this part.

(1) Risk retention groups chartered and licensed in other states and seeking to do business as a

risk retention group in this state shall comply with the following:

(a) Before offering insurance in this state a risk retention group shall submit to the commissioner:

(i) a statement identifying the states in which the group is chartered and licensed as a

liability insurance company, its charter date, its principal place of business, and any other

information, including information on its membership, the commissioner may require to

verify that the group is a qualified risk retention group as defined in Section 31A-15-202; and

(ii) a copy of its plan of operations or feasibility study and revisions of the plan or study

submitted to the state in which the risk retention group is chartered and licensed, except a

plan or study is not required for any line or classification of liability insurance that:

(A) was defined in the Product Liability Risk Retention Act of 1981 before October 27, 1986;

and

(B) was offered before that date by any risk retention group that had been chartered and

operating for not less than three years before that date.

(b) The risk retention group shall submit to the commissioner a copy of any revision to its plan

or study required by Subsection 31A-15-203(3) at the same time it submits the revision of its

chartering state.

of registration and a notice designating the commissioner as agent for the purpose of

receiving service of legal documents or process.

(d) The risk retention group shall pay annual license fees required by Section 31A-3-103.

(2) Any risk retention group doing business in this state shall submit to the commissioner:

(a) a copy of the group's financial statement submitted to the state in which the risk retention

group is chartered and licensed, which shall be certified by an independent public accountant

and shall contain a statement of opinion on loss and loss adjustment expense reserves made

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by a member of the American Academy of Actuaries or a loss reserve specialist qualified

under criteria approved by the commissioner;

(b) a copy of each examination of the risk retention group as certified by the commissioner or

public official conducting the examination;

audit performed with respect to the risk retention group; and

(d) any other information required to verify the group's continuing qualification as a risk retention

group within the definition in Section 31A-15-202.

(3)

(a) Each risk retention group shall pay premium taxes and taxes on premiums of direct

business for risks resident or located within this state, and shall report to the Utah State Tax

Commission the net premiums written for risks resident or located within this state. Each risk

retention group shall be subject to taxation, and any applicable fines and penalties related to

taxation, on the same basis as a foreign admitted insurer.

(b) To the extent licensed producers are utilized pursuant to Section 31A-15-212, they shall

report to the commissioner the premiums for direct business for all risks resident or located

within this state that the producers have placed with, or on behalf of, a risk retention group not

chartered in this state.

keep a complete and separate record of all policies procured from each risk retention group.

The record shall be open to examination by the commissioner, as provided under Section

31A-23a-412. These records shall include the following for each policy and each kind of

insurance provided under each policy:

(i) the limit of liability;

(ii) the time period covered;

(iii) the effective date;

(iv) the name of the risk retention group that issued the policy;

(v) the gross premium charged;

(vi) the amount of any returned premiums; and

(vii) additional information required by the insurance commissioner.

(4) Each risk retention group and its agents and representatives shall comply with:

(a) the Unfair Claims Settlement Practices Act, including Section 31A-15-207;

(b) Chapter 26, Part 3, Claim Practices; and

(5) Each risk retention group shall comply with the laws of this state regarding deceptive, false, and

fraudulent acts, practices regulated under Chapter 23a, Part 4, Marketing Practices, and any

other provision of law relating to deceptive, false, or fraudulent practices. The commissioner

may only obtain an injunction regarding the conduct described in this subsection from a court of

competent jurisdiction.

(6) If the commissioner of the jurisdiction in which the group is chartered and licensed has not

initiated an examination or does not initiate an examination within 60 days after a request by

the commissioner of this state, the risk retention group shall submit to an examination by the

commissioner of this state to determine its financial condition. Any examination conducted

under this subsection shall be coordinated to avoid unjustified repetition and shall be conducted

in an expeditious manner and in accordance with the National Association of Insurance

Commissioner's Examiner Handbook.

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(7) Each application form for insurance from a risk retention group and each policy and certificate

issued by a risk retention group shall contain the following notice in ten-point type on its front

and declaration pages:

"NOTICE

This policy is issued by your risk retention group. Your risk retention group may not be

subject to all of the insurance laws and regulations of your state. State insurance insolvency

guaranty funds are not available for your risk retention group."

(8) The following acts by a risk retention group are prohibited:

(a) the solicitation or sale of insurance by a risk retention group to any person who is not eligible

for membership in the group; and

(b) the solicitation or sale of insurance by, or operation of, a risk retention group that is in

hazardous financial condition or financially impaired.

(9) A risk retention group may not do business in this state if an insurance company is directly or

indirectly a member or owner of the risk retention group, unless all members of the group are

insurance companies.

(10) The terms of any insurance policy issued by a risk retention group may not provide, or be

construed to provide, coverage prohibited generally by statute of this state or declared unlawful

by the Utah Supreme Court.

(11) A risk retention group not chartered in this state and doing business in this state shall comply

with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding

commenced by any state's insurance commissioner if there has been a finding of financial

impairment after an examination under Subsection (6).

(12) A risk retention group that violates any provision of this part is subject to fines and penalties

applicable to licensed insurers generally, including revocation of its right to do business in this

state.

(13) In addition to complying with the requirements of this section, each risk retention group

operating in this state before the effective date of this part shall comply with Subsection (1)(a)

within 30 days after the effective date of this part.

Amended by Chapter 138, 2016 General Session

31A-15-205 Guaranty associations.

(1) A risk retention group may not be required to join or contribute financially to the Insurance

Guaranty Fund created under Title 31A, Chapter 28, Part 2, Property and Casualty Guaranty

Association, nor may any risk retention group, or its insureds or claimants against its insureds,

receive any benefit from any such fund for claims arising under the insurance policies issued by

the risk retention group.

(2) When a purchasing group obtains insurance covering its members' risks from an insurer not

authorized in this state or from a risk retention group, the risks, wherever resident or located,

may not be covered by any insurance guaranty fund or similar mechanism in this state.

(3) When a purchasing group obtains insurance covering its members' risks from an authorized

insurer, only risks resident or located in this state shall be covered by the Utah Property and

Casualty Insurance Guaranty Association created under Title 31A, Chapter 28, Guaranty

Associations.

Enacted by Chapter 258, 1992 General Session

31A-15-206.5 Countersignatures not required.

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A policy of insurance issued to a risk retention group or any member of the risk retention group

may not be required to be countersigned.

Enacted by Chapter 138, 2016 General Session

31A-15-207 Purchasing groups -- Exemption from certain laws.

A purchasing group and its insurers are subject to all applicable laws of this state, except that

a purchasing group and its insurers are exempt, in regard to liability insurance for the purchasing

group, from any law that would:

(1) prohibit the establishment of a purchasing group;

(2) make it unlawful for an insurer to provide, or offer to provide, to a purchasing group or its

members insurance on a basis providing advantages based on their loss and expense

experience not afforded to other persons with respect to rates, policy forms, coverages, or other

matters;

(3) prohibit a purchasing group or its members from purchasing insurance on a group basis

described in Subsection (2);

(4) prohibit a purchasing group from obtaining insurance on a group basis because the group has

not been in existence for a minimum period of time or because any member has not belonged

to the group for a minimum period of time;

(5) require that a purchasing group have a minimum number of members, common ownership or

affiliation, or certain legal form;

(6) require that a certain percentage of a purchasing group obtain insurance on a group basis;

(7) otherwise discriminate against a purchasing group or any of its members; or

(8) require that any insurance policy issued to a purchasing group or any of its members be

countersigned by an insurance producer residing in this state.

Amended by Chapter 297, 2011 General Session

31A-15-208 Purchasing groups -- Notice and registration requirements.

(1) A purchasing group that intends to do business in this state shall, before doing business,

furnish reasonable notice to the insurance commissioner in this state. The notice shall be on

forms prescribed by the National Association of Insurance Commissioners and shall:

(a) identify the state in which the group is domiciled;

(b) identify the other states in which the group intends to do business;

(d) identify the one or more insurance companies from which the group intends to purchase its

insurance and the domicile of the insurers;

(e) specify the method by which, and the one or more persons, if any, through whom, insurance

will be offered to its members whose risks are resident or located in this state;

(f) identify the principal place of business of the group; and

(g) provide any other information as may be required by the commissioner to verify that the group

is a qualified "purchasing group," as defined in Section 31A-15-202.

(2) A purchasing group shall notify the commissioner of a change in an item listed in Subsection (1)

within 10 days of the change.

(3)

(a) A purchasing group shall annually register with the commissioner and pay a filing fee.

(b) A purchasing group shall designate the commissioner as its agent solely for the purpose of

receiving service of legal documents or process.

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group that only purchases insurance that was authorized under the Product Liability Risk

Retention Act of 1981, and that:

(i) in any state of the United States:

(A) was domiciled before April 1, 1986; and

(B) is domiciled after October 27, 1986;

(ii)

(A) before October 27, 1986, purchased insurance from an insurer licensed in any state; and

(B) since October 27, 1986, purchased its insurance from an insurer licensed in any state; or

(iii) was a purchasing group under the requirements of the Product Liability Risk Retention Act

of 1981 before October 27, 1986.

(4) Each purchasing group that is required to give notice under Subsection (1) shall also furnish the

information required by the commissioner to:

(a) verify that the entity qualifies as a purchasing group;

(b) determine where the purchasing group is located; and

Amended by Chapter 138, 2016 General Session

31A-15-209 Restrictions on purchasing groups.

(1) A purchasing group may not purchase insurance from a risk retention group that is not

chartered in a state or from an insurer not admitted in the state in which the purchasing group

is located, unless the purchase is effected through a licensed producer acting pursuant to the

surplus lines laws and regulations of the state in which the purchasing group is located.

(2) A purchasing group that obtains liability insurance from an insurer not admitted in this state or a

risk retention group shall inform each of the members of the purchasing group or risk retention

group that have a risk resident or located in this state that:

(a) the risk is not protected by an insurance insolvency guaranty fund in this state; and

(b) the risk retention group or insurer may not be subject to all insurance laws and regulations of

this state.

(3)

(a) A purchasing group may not purchase insurance providing for a deductible or self-insured

retention applicable to the group as a whole.

(b) Notwithstanding Subsection (3)(a), coverage may provide for a deductible or self-insured

retention applicable to individual members.

(4) Purchases of insurance by purchasing groups are subject to the same standards regarding

aggregate limits which are applicable to all purchases of group insurance.

Amended by Chapter 138, 2016 General Session

31A-15-210 Purchasing group taxation.

Premium taxes and taxes on premiums paid for coverage of risks resident or located in this

state by a purchasing group or any members of the purchasing groups are imposed and shall be

paid as follows:

(1) If the insurer is an admitted insurer, taxes are imposed on the insurer at the same rate and in

the same manner and subject to the same procedures, interest, and penalties that apply to

premium taxes and other taxes imposed on other admitted liability insurers relative to coverage

of risks resident or located in this state.

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(2) If the insurer is an approved, nonadmitted surplus lines insurer, taxes are imposed on the

licensed producer who effected coverage on risks resident or located in this state at the same

rate and in the same manner and subject to the same procedures, interest, and penalties

that apply to taxes imposed on other licensed producers effecting coverage with approved,

nonadmitted surplus lines insurers on risks resident or located in this state.

Amended by Chapter 297, 2011 General Session

31A-15-211 Enforcement authority.

(1)

(a) The commissioner is authorized to use the powers established for the department under

this title to enforce the laws of this state not specifically preempted by the Liability Risk

Retention Act of 1986, including the commissioner's administrative authority to investigate,

issue subpoena, conduct depositions and hearings, issue orders, impose monetary penalties

and seek injunctive relief.

(b) With regard to any investigation, administrative proceedings, or litigation, the commissioner

shall rely on the procedural laws of this state.

(2)

(a) Whenever the commissioner determines that any person, risk retention group, purchasing

group, or insurer of a purchasing group has violated, is violating, or is about to violate any

provision of this part or any other insurance law of this state applicable to the person or entity,

or that the person or entity has failed to comply with a lawful order of the commissioner, the

commissioner may, in addition to any other lawful remedies or penalties, bring an action in

a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to enjoin and

restrain any person, risk retention group, purchasing group, or insurer from engaging in the

violation, or to compel compliance with the order of the commissioner.

(b) In an action by the commissioner under Subsection (2)(a), service of process shall be made

upon the director of the Division of Corporations and Commercial Code who shall forward the

order, pleadings, or other process to the person, risk retention group, purchasing group, or

insurer in accordance with the procedures specified in Section 31A-14-204.

to seek injunctive relief in any district court of the United States as provided in Section

31A-15-213.

(3) In an action under this section, a court has the power to enter a judgment and order for

injunctive or other relief.

Amended by Chapter 401, 2023 General Session

31A-15-212 Duty of producers to obtain license -- Risk retention groups -- Purchasing

groups.

(1) A person may do the following only if the person is licensed as an insurance producer or

is exempt from licensure under Chapter 23a, Insurance Marketing - Licensing Producers,

Consultants, and Reinsurance Intermediaries:

(a) solicit, negotiate, or procure liability insurance in this state from a risk retention group;

(b) solicit, negotiate, or procure liability insurance in this state for a purchasing group from an

authorized insurer or a risk retention group; and

purchasing group under a purchasing group's policy.

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(2)

(a) A person may not act or aid in any manner in soliciting, negotiating, or procuring liability

insurance in this state for a purchasing group from an authorized insurer or a risk retention

group chartered in a state unless that person is licensed as an insurance producer, or is

exempt from licensure under Chapter 23a, Insurance Marketing - Licensing Producers,

Consultants, and Reinsurance Intermediaries.

(b) A person may not act or aid in any manner in soliciting, negotiating, or procuring liability

insurance coverage in this state for any member of a purchasing group under a purchasing

group's policy unless that person is licensed as an insurance producer, or is exempt from

licensure under Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and

Reinsurance Intermediaries.

insurance from an insurer not authorized to do business in this state on behalf of a purchasing

group located in this state unless that person is licensed as a surplus lines producer or

excess lines producer or is exempt from licensure under Chapter 23a, Insurance Marketing -

Licensing Producers, Consultants, and Reinsurance Intermediaries.

(3) For purposes of acting as a producer for a risk retention group or purchasing group pursuant to

Subsections (1) and (2), the requirement of residence in this state does not apply.

(4) A person licensed pursuant to Chapter 23a, Insurance Marketing - Licensing Producers,

Consultants, and Reinsurance Intermediaries, on business placed with a risk retention group or

written through a purchasing group, shall inform each prospective insured of the provisions of

the notice required by Subsection 31A-15-204(7) in the case of a purchasing group.

Amended by Chapter 138, 2016 General Session

31A-15-213 Effect of orders issued in U.S. District Court.

An order issued by any district court of the United States shall be enforceable in the courts of

this state to enjoin a risk retention group from soliciting or selling insurance, or operating in any

state, in all states, or in any territory or possession of the United States, upon a finding that the

group is in hazardous financial condition or financially impaired condition.

Enacted by Chapter 258, 1992 General Session

31A-15-213.5 Rulemaking.

In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commissioner

may make and from time to time amend rules relating to risk retention groups as may be necessary

or desirable to carry out this part.

Enacted by Chapter 138, 2016 General Session

31A-15-214 Severability.

If any provision of this part, or the application of any provision to any person or circumstances,

is held invalid, the remainder of this part shall be given effect without the invalid provision or

application.

Enacted by Chapter 258, 1992 General Session

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Chapter 16

Insurance Holding Companies

31A-16-101 Scope and purpose of chapter.

(1) This chapter applies to all persons doing an insurance business in Utah.

(2) The purposes of this chapter include:

(a) exercising surveillance over the acquisition of a domestic insurer, to ensure that in the

process of making it part of an insurance holding company system, the interests of

policyholders, shareholders, and the public are not harmed;

(b) providing the regulatory monitoring of those intercorporate relationships and transactions

among affiliates within an insurance holding company system that may affect the solidity of

insurers;

(d) providing, in appropriate cases, recoupment of dividends paid.

Enacted by Chapter 242, 1985 General Session

31A-16-102.5 Subsidiaries of insurers.

(1)

(a) A domestic insurer may organize or acquire one or more subsidiaries either:

(i) by itself; or

(ii) in cooperation with one or more persons.

(b) A subsidiary of a domestic insurer may conduct any kind of business or businesses and its

authority to do so may not be limited by reason of the fact that it is a subsidiary of a domestic

insurer.

(2)

(a) In addition to investments in common stock, preferred stock, debt obligations, and other

securities permitted under all other sections of this chapter, a domestic insurer may also

invest in the following securities of one or more subsidiaries:

(i) common stock;

(ii) preferred stock;

(iii) debt obligations; or

(iv) other securities.

(b) Amounts under Subsection (2)(a) that do not exceed the lesser of 10% of the insurer's

assets or 50% of the insurer's surplus as regards policyholders are permitted, if after the

investments, the insurer's surplus as regards policyholders will be reasonable in relation to

the insurer's outstanding liabilities and adequate to meet its financial needs.

domestic or foreign insurance subsidiaries and health organizations shall be excluded, and

there shall be included:

(i) total net money or other consideration expended and obligations assumed in the acquisition

or formation of a subsidiary, including all organizational expenses and contributions to

capital and surplus of the subsidiary whether or not represented by the purchase of capital

stock or issuance of other securities; and

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(ii) the amounts expended in acquiring additional common stock, preferred stock, debt

obligations, and other securities, and all contributions to the capital or surplus of a

subsidiary subsequent to its acquisition or formation.

(d)

(i) A domestic insurer may invest any amount in securities described in Subsection (2)(a) of

one or more subsidiaries engaged or organized to engage exclusively in the ownership and

management of assets authorized as investments for the insurer if each subsidiary agrees

to limit its investments in any asset so that the investments will not cause the amount of

the total investment of the insurer to exceed any of the investment limitations specified in

Subsection (2)(b) applicable to the insurer.

(ii) For purposes of this Subsection (2)(d), "the total investment of the insurer" shall include:

(A) a direct investment by the insurer in an asset; and

(B) the insurer's proportionate share of an investment in an asset by a subsidiary of the

insurer, which shall be calculated by multiplying the amount of the subsidiary's investment

by the percentage of the ownership of the subsidiary.

(e) With the approval of the commissioner, a domestic insurer may invest any greater amount

in securities described in Subsection (2)(a) provided that after the investment the insurer's

surplus as regards policyholders will be reasonable in relation to the insurer's outstanding

liabilities and adequate to its financial needs.

(3) Investments in securities described in Subsection (2)(a) may not be subject to any of the

otherwise applicable restrictions or prohibitions contained in this chapter applicable to the

investments of insurers.

(4) Whether any investment made pursuant to Subsection (2) meets the applicable requirements of

Subsection (2) shall be determined before the investment is made, by calculating the applicable

investment limitations as though the investment had already been made, taking into account:

(a) the then outstanding principal balance on all previous investments in debt obligations; and

(b) the value of all previous investments in equity securities as of the day they were made net of

any return of capital invested not including dividends.

(5)

(a) Subject to Subsection (5)(b), if an insurer ceases to control a subsidiary, it shall dispose of

any investment in the subsidiary made pursuant to this section:

(i) within three years from the time of the cessation of control; or

(ii) within such further time as the commissioner may prescribe.

(b) Subsection (5)(a) does not apply if at any time after the investment is made, the investment

meets the requirements for investment under any other section of this chapter, and the

insurer has so notified the commissioner.

Enacted by Chapter 244, 2015 General Session

31A-16-102.6 Mutual insurance holding companies.

(1) As used in this section:

(a) "Intermediate holding company" means a holding company that:

(i) is a subsidiary of a mutual insurance holding company;

(ii) directly or through a subsidiary of the holding company, holds one or more subsidiary

insurers, including a reorganized mutual insurer; and

(iii) if the subsidiary insurers were not held by the holding company, a majority of the voting

shares of the subsidy insurers' capital stock would be required under this section to be

owned by the mutual insurance holding company.

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(b) "Majority of the voting shares" means the shares of a reorganized mutual insurer's capital

stock that carry the right to cast a majority of the votes entitled to be cast by all of the

outstanding shares of the reorganized mutual insurer's capital stock for the election

of directors and other matters submitted to a vote of the reorganized mutual insurer's

shareholders.

(2)

(a) With the commissioner's approval, a domestic mutual insurer may reorganize by forming a

mutual insurance holding company in which:

(i) in accordance with the mutual insurance holding company's articles of incorporation and

bylaws, the membership interests of the domestic mutual insurer's policyholders become

membership interests in the mutual insurance holding company; and

(ii) the domestic mutual insurer is reorganized as a domestic stock insurance company.

(b) The commissioner may approve a domestic mutual insurer's reorganization under this

Subsection (2) if:

(i) the domestic mutual insurer's reorganization plan:

(A) properly protects the interests of the domestic mutual insurer's policyholders;

(B) is fair and equitable to the domestic mutual insurer's policyholders;

regular or special meeting of the policyholders at which a quorum is present; and

(D) satisfies the requirements of Subsections 31A-16-103(8) through (10);

(ii) the initial shares of the reorganized domestic mutual insurer's capital stock are issued to the

mutual insurance holding company or intermediate holding company; and

(iii) at all times, the mutual insurance holding company or intermediate holding company owns a

majority of the voting shares of the reorganized domestic mutual insurer's capital stock.

mutual insurance holding company's articles and bylaws that a policyholder of a stock insurer

that is or becomes a subsidiary of the mutual insurance holding company to be a member of

the mutual insurance holding company.

(d) The domestic mutual insurer:

(i) shall provide the domestic mutual insurer's policyholders notice of the reorganization plan

and the related member meeting by first-class mail;

(ii) shall include in a notice described in Subsection (2)(d)(i), a copy of the full reorganization

plan and all related plan materials;

(iii) may satisfy the requirement in Subsection (2)(d)(ii) by including with the notice of

reorganization a URL link at which the policyholders can access the full reorganization plan

and any related materials electronically; and

(iv) shall provide a physical copy of the reorganization plan and all related plan materials to a

policyholder upon request.

(3)

(a) With the commissioner's approval, a domestic mutual insurer may reorganize by merging

the domestic mutual insurer's policyholders' membership interests into an existing domestic

mutual insurance holding company formed under Subsection (2), if:

(i) in accordance with the mutual insurance holding company's articles of incorporation and

bylaws, the membership interests of the domestic mutual insurer's policyholders become

membership interests in the mutual insurance holding company; and

(ii) the domestic mutual insurer is reorganized as a domestic stock insurance company

subsidiary of the existing domestic mutual insurance holding company or intermediate

holding company.

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(b) The commissioner may approve a domestic mutual insurance company's reorganization

under this Subsection (3) if:

(i) the domestic mutual insurer's reorganization plan:

(A) properly protects the interests of the domestic mutual insurer's policyholders;

(B) is fair and equitable to the domestic mutual insurer's policyholders; and

(ii) all of the initial shares of the capital stock of the reorganized insurance company are issued

to the mutual insurance holding company or intermediate holding company; and

(iii) at all times, the mutual insurance holding company or intermediate holding company owns a

majority of the voting shares of the reorganized domestic mutual insurer's capital stock.

merger the commissioner finds necessary for the protection of the policyholders' interests.

(4)

(a) With the commissioner's approval, a foreign mutual insurer organized under the laws

of any other state that would qualify to become a domestic insurer organized under the

laws of this state may reorganize by merging the foreign mutual insurer's policyholders'

membership interests into an existing domestic mutual insurance holding company formed

under Subsection (2) in which:

(i) in accordance with the mutual insurance holding company's articles of incorporation and

bylaws, the membership interests of the foreign mutual insurer's policyholders become

membership interests in the mutual insurance holding company; and

(ii) the foreign mutual insurer is reorganized as a foreign stock insurance company subsidiary of

the existing domestic mutual insurance holding company or intermediate holding company.

(b) The commissioner may approve a foreign mutual insurer's reorganization under this

Subsection (4) if:

(i) the foreign mutual insurer's reorganization plan:

(A) complies with any other law or rule applicable to the foreign mutual insurer;

(B) properly protects the interests of the foreign mutual insurer's policyholders;

(D) satisfies the requirements of Subsections 31A-16-103(8) through (10);

(ii) all of the initial shares of the reorganized foreign mutual insurer's capital stock are issued to

the mutual insurance holding company or intermediate holding company; and

(iii) at all times, the mutual insurance holding company or intermediate holding company owns a

majority of the voting shares of the reorganized foreign mutual insurer's capital stock.

insurer may:

(i) remain a foreign corporation; and

(ii) with the commissioner's approval, be admitted to conduct business in this state.

(d) A foreign mutual insurer that is a party to a reorganization plan may redomesticate in this

state by complying with the applicable requirements of this state and the foreign mutual

insurer's state of domicile.

(5)

(a) As a condition of approval, the commissioner may require a mutual insurer to modify

the mutual insurer's reorganization plan to protect the interests of the mutual insurer's

policyholders.

(b) If the commissioner determines reasonably necessary, at the reorganizing mutual insurer's

expense, the commissioner may retain a third-party consultant to assist the commissioner in

reviewing the mutual insurer's reorganization plan.

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holding company organized in accordance with this section.

(d) Subject to the commissioner's approval, a reorganized mutual insurer or a stock insurance

subsidiary within a mutual insurance company may issue a dividend or distribution to the

mutual insurance holding company or intermediate holding company.

(6)

(a) Subject to the provisions of this section, a mutual insurance holding company resulting from

the reorganization of a domestic mutual insurer shall be incorporated in accordance with and

is subject to the provisions of Chapter 5, Domestic Stock and Mutual Insurance Corporations

as if it were a mutual insurer.

(b) A mutual insurance holding company's articles of incorporation and bylaws are subject

to commissioner's approval in the same manner as an insurance company's articles of

incorporation and bylaws.

(7)

(a) A mutual insurance holding company is:

(i) subject to Chapter 27a, Insurer Receivership Act; and

(ii) a party to any proceeding under Chapter 27a, Insurer Receivership Act, involving an insurer

that is a subsidiary of the mutual insurance holding company as a result of a reorganization

in accordance with this section.

(b) In a proceeding under Chapter 27a, Insurer Receivership Act, involving a reorganized mutual

insurer, the assets of the mutual insurance holding company are assets of the estate of the

reorganized mutual insurer for the purpose of satisfying the claims of the reorganized mutual

insurer's policyholders.

(i) prior approval of the commissioner; or

(ii) court order in accordance with Chapter 27a, Insurer Receivership Act.

(8)

(a) Section 31A-5-506 does not apply to a mutual insurer's reorganization or merger under this

section.

(b) Section 31A-5-506 applies to demutualization of a mutual insurance holding company.

(i) Sections 31A-5-204 through 31A-5-217.5;

(ii) Sections 31A-5-301 through 31A-5-307;

(iii) Section 31A-5-505; and

(iv) Section 31A-5-509.

(d) Notwithstanding Section 31A-5-203, a mutual insurance holding company is not required to

include "insurance" in the mutual insurance holding company's name.

(9) A membership interest in a domestic mutual insurance holding company is not a security under

Utah law.

(10)

(a) The ownership of a majority of the voting shares of a reorganized mutual insurer's capital

stock includes indirect ownership through one or more intermediate holding companies in a

corporate structure approved by the commissioner.

(b) The indirect ownership described in Subsection (10)(a) may not result in the mutual insurance

holding company owning less than the equivalent of the majority of the voting shares of the

reorganized mutual insurer's capital stock.

(11)

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(a) A mutual insurance holding company or intermediate holding company may not sell, transfer,

assign, pledge, encumber, hypothecate, alienate, or subject to a security interest or lien the

majority of the voting shares of the reorganized mutual insurer's capital stock.

(b) An act that violates Subsection (11)(a) is void in reverse chronological order of the date the

act occurred.

subject to execution and levy under Utah law.

(d) The shares of the capital stock of the surviving or new company resulting from a merger or

consolidation of two or more reorganized mutual insurers, or two or more intermediate holding

companies that were subsidiaries of the same mutual insurance holding company, are subject

to the same requirements, restrictions, and limitations described in this section that applied

to the shares of the merging or consolidating reorganized mutual insurers or intermediate

holding companies before the merger or consolidation.

(12) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

commissioner may make rules to implement the provisions of this section.

Amended by Chapter 120, 2024 General Session

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.

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.

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(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;

(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

(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;

executive officers of the person, or individuals who perform, or who will perform functions

appropriate to such positions; and

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(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

(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:

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(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:

(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.

(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

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(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

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;

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(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 an interested party.

(10)

(a) 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 a hearing described in Subsection (9)

to the person filing the statement described in Subsection (1).

(ii) 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' notice of the 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

(vi)

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(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.

(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

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.

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(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.

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 (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.

(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.

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Amended by Chapter 194, 2023 General Session

31A-16-104.5 Acquisitions involving insurers not otherwise covered.

(1) The following definitions apply for the purposes of this section only:

(a) "Acquisition" means an agreement, arrangement, or activity the consummation of which

results in a person acquiring directly or indirectly the control of another person and includes

the acquisition of voting securities, the acquisition of assets, bulk reinsurance, and mergers.

(b) "Insurer" includes any company or group of companies under common management,

ownership, or control.

acquirer or acquired, or is the result of a merger.

(d)

(i) "Market" means the relevant product and geographical markets. In determining the relevant

product and geographical markets, the commissioner shall give due consideration to,

among other things, the definitions or guidelines, if any, promulgated by the National

Association of Insurance Commissioners and to information, if any, submitted by parties to

the acquisition. In the absence of sufficient information to the contrary, the relevant product

market is assumed to be the direct written insurance premium for a line of business, such

line being that used in the annual statement required to be filed by insurers doing business

in this state, and the relevant geographical market is assumed to be this state.

(ii) Notwithstanding Subsection (1)(d)(i), for purposes of Subsection (2)(b), "market" means

direct written insurance premium in this state for a line of business as contained in the

annual statement required to be filed by insurers licensed to do business in this state.

(2)

(a) This section applies to any acquisition in which there is a change in control of an insurer

authorized to do business in Utah.

(b) This section does not apply to the following:

(i) securities purchased solely for investment purposes so long as the securities are not used by

voting or otherwise to cause or attempt to cause the substantial lessening of competition in

any insurance market in this state;

(ii) if a purchase of securities results in a presumption of control under Subsection

31A-1-301(29)(d), it is not solely for investment purposes unless the commissioner of the

insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control

does not exist and the disclaimer action or affirmative finding is communicated by the

domiciliary commissioner to the commissioner of this state;

(iii) the acquisition of a person by another person when both persons are neither directly

nor through affiliates primarily engaged in the business of insurance, if pre-acquisition

notification is filed with the commissioner in accordance with Subsection (3)(a) 30 days

before the proposed effective date of the acquisition;

(iv) the acquisition of an already affiliated person;

(v) an acquisition if, as an immediate result of the acquisition:

(A) in no market would the combined market share of the involved insurers exceed 5% of the

total market;

(B) there would be no increase in any market share; or

the total market, and the market share increase by more than 2% of the total market;

(vi) an acquisition for which a pre-acquisition notification would be required pursuant to this

section due solely to the resulting effect on the ocean marine insurance line of business; or

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(vii) an acquisition of an insurer whose domiciliary commissioner affirmatively finds that the

insurer is in failing condition, and:

(A) there is a lack of feasible alternative to improving such condition;

(B) the public benefits of improving the insurer's condition through the acquisition exceed the

public benefits that would arise from not lessening competition; and

this state.

(3) An acquisition covered by Subsection (2) may be subject to an order pursuant to Subsection

(5) unless the acquiring person files a pre-acquisition notification and the waiting period has

expired. The acquired person may file a pre-acquisition notification. The commissioner shall

give confidential treatment to information submitted under this Subsection (3) in the same

manner as provided in Section 31A-16-109.

(a) The pre-acquisition notification shall be in the form and contain such information as

prescribed by the National Association of Insurance Commissioners relating to those markets

that, under Subsection (2)(b)(v), cause the acquisition not to be exempted from this section.

The commissioner may require additional material and information as considered necessary

to determine whether the proposed acquisition, if consummated, would violate the competitive

standard of Subsection (4). The required information may include an opinion of an economist

as to the competitive impact of the acquisition in this state accompanied by a summary of

the education and experience of the economist indicating the economist's ability to render an

informed opinion.

(b) The waiting period required shall begin on the date of receipt of the commissioner of a pre-

acquisition notification and shall end on the earlier of the 30th day after the date of receipt, or

termination of the waiting period by the commissioner. Before the end of the waiting period,

the commissioner on a one-time basis may require the submission of additional needed

information relevant to the proposed acquisition, in which event the waiting period shall end

on the earlier of the 30th day after receipt of the additional information by the commissioner or

termination of the waiting period by the commissioner.

(4)

(a) The commissioner may enter an order under Subsection (5)(a) with respect to an acquisition

if there is substantial evidence that the effect of the acquisition may be substantially to lessen

competition in any line of insurance in this state, tend to create a monopoly, or if the insurer

fails to file adequate information in compliance with this section.

(b) In determining whether a proposed acquisition would violate the competitive standard of

Subsection (4)(a), the commissioner shall consider the following:

(i) Any acquisition covered under this Subsection (4) involving two or more insurers competing

in the same market is prima facie evidence of violation of the competitive standards if:

(A) the market is highly concentrated and the involved insurers possess the following shares

of the market:

Insurer A Insurer B

4% 4% or more

10% 2% or more

15% 1% or more; or

(B) the market is not highly concentrated and the involved insurers possess the following

shares of the market:

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Insurer A Insurer B

5% 5% or more

10% 4% or more

15% 3% or more

19% 1% or more.

(ii) For purposes of this section, a highly concentrated market is one in which the share of the

four largest insurers is 75% or more of the market. Percentages not shown in the tables are

interpolated proportionately to the percentages that are shown. If more than two insurers

are involved, exceeding the total of the two columns in the table is prima facie evidence of

violation of the competitive standard in Subsection (4)(a).

(iii) For purposes of this section, the insurer with the largest share of the market shall be

considered to be Insurer A.

of any grouping of the largest insurers in the market, from the two largest to the eight largest,

has increased by 7% or more of the market over a period of time extending from any base

year 5 to 10 years before the acquisition up to the time of the acquisition. Any acquisition or

merger covered under Subsection (1) involving two or more insurers competing in the same

market is prima facie evidence of violation of the competitive standard in Subsection (4)(a) if:

(i) there is a significant trend toward increased concentration in the market;

(ii) one of the insurers involved is one of the insurers in a grouping of large insurers showing the

requisite increase in the market share; and

(iii) another involved insurer's market is 2% or more.

(d) The burden of showing prima facie evidence of violation of the competitive standard rests

upon the commissioner.

(e) Even though an acquisition is not prima facie violative of the competitive standard under

Subsections (4)(b) and (4)(c), the commissioner may establish the requisite anticompetitive

effect based upon other substantial evidence.

(f) Even though an acquisition is prima facie violative of the competitive standard under

Subsections (4)(b) and (4)(c), a party may establish the absence of the requisite

anticompetitive effect based upon other substantial evidence. Relevant factors in making a

determination under this Subsection (4)(f) include the following:

(i) market shares;

(ii) volatility of ranking of market leaders;

(iii) number of competitors;

(iv) concentration or trend of concentration in the industry; and

(v) ease of entry and exit into the market.

(g) An order may not be entered under Subsection (5) if:

(i) the acquisition will yield substantial economies of scale or economies in resource use that

cannot be feasibly achieved in any other way, and the public benefits that would arise from

the economies exceed the public benefits that would arise from not lessening competition;

(ii) the acquisition will substantially increase the availability of insurance, and the public benefits

of the increase exceed the public benefits that would arise from not lessening competition.

(5)

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(a) Subject to Title 63G, Chapter 4, Administrative Procedures Act, if an acquisition violates the

standards of this section, the commissioner may enter an order:

(i) requiring an involved insurer to cease and desist from doing business in this state with

respect to the line or lines of insurance involved in the violation; or

(ii) denying the application of an acquired or acquiring insurer for a license to do business in

this state.

(b) The commissioner shall accompany an order issued under this Subsection (5) with a written

decision of the commissioner setting forth findings of fact and conclusions of law.

(d) A person who violates a cease and desist order of the commissioner under Subsection

(5)(a)(i) and while the order is in effect may after notice and hearing and upon order of

the commissioner be subject at the discretion of the commissioner to one or more of the

following:

(i) notwithstanding Section 31A-2-308, a monetary penalty of not more than $10,000 for every

day of violation; or

(ii) suspension or revocation of the person's license.

(e) An insurer or other person who fails to make any filing required by this section, and who fails

to demonstrate a good faith effort to comply with a filing requirement, is subject to a fine of not

more than $50,000 notwithstanding Section 31A-2-308.

Enacted by Chapter 244, 2015 General Session

31A-16-105 Registration of insurers.

(1)

(a) An insurer that is authorized to do business in this state and that is a member of an insurance

holding company system shall register with the commissioner, except a foreign insurer

subject to registration requirements and standards adopted by statute or regulation in the

jurisdiction of its domicile, if the requirements and standards are substantially similar to

those contained in this section, Subsections 31A-16-106(1)(a) and (2) and either Subsection

31A-16-106(1)(b) or a statutory provision similar to the following: "Each registered insurer

shall keep current the information required to be disclosed in its registration statement by

reporting all material changes or additions within 15 days after the end of the month in which

it learns of each change or addition."

(b) An insurer that is subject to registration under this section shall register within 15 days

after it becomes subject to registration, and annually thereafter by June 30 of each year for

the previous calendar year, unless the commissioner for good cause extends the time for

registration and then at the end of the extended time period. The commissioner may require

any insurer authorized to do business in the state, which is a member of a holding company

system, and which is not subject to registration under this section, to furnish a copy of the

registration statement, the summary specified in Subsection (3), or any other information filed

by the insurer with the insurance regulatory authority of domiciliary jurisdiction.

(2) An insurer subject to registration shall file the registration statement with the commissioner

on a form and in a format prescribed by the NAIC, which shall contain the following current

information:

(a) the capital structure, general financial condition, and ownership and management of the

insurer and any person controlling the insurer;

(b) the identity and relationship of every member of the insurance holding company system;

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occurred during the last calendar year between the insurer and its affiliates:

(i) loans, other investments, or purchases, sales or exchanges of securities of the affiliates by

the insurer or of securities of the insurer by its affiliates;

(ii) purchases, sales, or exchanges of assets;

(iii) transactions not in the ordinary course of business;

(iv) guarantees or undertakings for the benefit of an affiliate which result in an actual contingent

exposure of the insurer's assets to liability, other than insurance contracts entered into in the

ordinary course of the insurer's business;

(v) all management agreements, service contracts, and all cost-sharing arrangements;

(vi) reinsurance agreements;

(vii) dividends and other distributions to shareholders; and

(viii) consolidated tax allocation agreements;

(d) any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate, for a

loan made to any member of the insurance holding company system;

(e) if requested by the commissioner, financial statements of or within an insurance holding

company system, including all affiliates:

(i) which may include annual audited financial statements filed with the United States Securities

and Exchange Commission pursuant to the Securities Act of 1933, as amended, or the

Securities Exchange Act of 1934, as amended; and

(ii) which request is satisfied by providing the commissioner with the most recently filed parent

corporation financial statements that have been filed with the United States Securities and

Exchange Commission;

(f) any other matters concerning transactions between registered insurers and any affiliates

as may be included in any subsequent registration forms adopted or approved by the

commissioner;

(g) statements that the insurer's board of directors oversees corporate governance and internal

controls and that the insurer's officers or senior management have approved, implemented,

and continue to maintain and monitor corporate governance and internal control procedures;

and

(h) any other information required by rule made by the commissioner in accordance with Title

63G, Chapter 3, Utah Administrative Rulemaking Act.

(3) All registration statements shall contain a summary outlining all items in the current registration

statement representing changes from the prior registration statement.

(4)

(a) No information need be disclosed on the registration statement filed pursuant to Subsection

(2) if the information is not material for the purposes of this section.

(b) Unless the commissioner by rule or order provides otherwise, sales, purchases, exchanges,

loans or extensions of credit, investments, or guarantees involving one-half of 1%, or less, of

an insurer's admitted assets as of the next preceding December 31 may not be considered

material for purposes of Subsection (2).

(5) Subject to Section 31A-16-106, each registered insurer shall report to the commissioner a

dividend or other distribution to shareholders within 15 business days following the declaration

of the dividend or distribution.

(6) Any person within an insurance holding company system subject to registration shall provide

complete and accurate information to an insurer if the information is reasonably necessary to

enable the insurer to comply with the provisions of this chapter.

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(7) The commissioner shall terminate the registration of any insurer which demonstrates that it no

longer is a member of an insurance holding company system.

(8) The commissioner may require or allow two or more affiliated insurers subject to registration

under this section to file a consolidated registration statement.

(9) The commissioner may allow an insurer which is authorized to do business in this state, and

which is part of an insurance holding company system, to register on behalf of any affiliated

insurer which is required to register under Subsection (1) and to file all information and material

required to be filed under this section.

(10) This section does not apply to any insurer, information, or transaction if, and to the extent that,

the commissioner by rule or order exempts the insurer from this section.

(11) Any person may file with the commissioner a disclaimer of affiliation with any authorized

insurer, or a disclaimer of affiliation may be filed by any insurer or any member of an insurance

holding company system. The disclaimer shall fully disclose all material relationships and

bases for affiliation between the person and the insurer as well as the basis for disclaiming

the affiliation. A disclaimer of affiliation is considered to have been granted unless the

commissioner, within 30 days following receipt of a complete disclaimer, notifies the filing party

the disclaimer is disallowed. If disallowed, the disclaiming party may request an administrative

hearing, which shall be granted. The disclaiming party shall be relieved of its duty to register

under this section if approval of the disclaimer is granted by the commissioner, or if the

disclaimer is considered to have been approved.

(12) The ultimate controlling person of an insurer subject to registration shall also file an annual

enterprise risk report. The annual enterprise risk report shall, to the best of the ultimate

controlling person's knowledge and belief, identify the material risks within the insurance

holding company that could pose enterprise risk to the insurer. The annual enterprise risk

report shall be filed with the lead state commissioner of the insurance holding company system

as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC.

(13)

(a) The ultimate controlling person of an insurer subject to registration shall concurrently file

with the registration an annual group capital calculation report as directed by the lead state

commissioner.

(b) The annual group capital calculation report described in Subsection (13)(a) shall be filed with

the lead state commissioner of the insurance holding company system as determined by the

commissioner in accordance with the procedures within the Financial Analysis Handbook

adopted by the NAIC.

exempt from filing the annual group capital calculation report described in Subsection (13)(a):

(i) an insurance holding company system that:

(A) has only one insurer within the insurance holding company's structure;

(B) writes business and is licensed only in the insurance holding company system's domestic

state; and

(ii) an insurance holding company system that is required to perform a group capital calculation

specified by the United States Federal Reserve Board unless:

(A) the lead state commissioner requests the calculation from the Federal Reserve Board

under the terms of information sharing agreements in effect; and

(B) the Federal Reserve Board cannot share the calculation with the lead state commissioner;

(iii) an insurance holding company system whose non-United States group-wide supervisor

is located within a reciprocal jurisdiction as described in Subsection 31A-17-404(8) that

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recognizes the United States' state regulatory approach to group supervision and group

capital; and

(iv) an insurance holding company system:

(A) that provides information to the lead state that meets the requirements for accreditation

under the NAIC financial standards and accreditation program, either directly or indirectly

through the group-wide supervisor, who has determined the information is satisfactory to

allow the lead state to comply with the NAIC group supervision approach, as detailed in

the NAIC Financial Analysis Handbook; and

(B) whose non-United States group-wide supervisor that is not located in a reciprocal

jurisdiction recognizes and accepts, as specified by the lead state commissioner in

regulation, the group capital calculation as the world-wide group capital assessment for

United States insurance groups that operate in that jurisdiction.

(d) If, after consultation with other supervisors or officials, the lead state commissioner

determines appropriate for prudential oversight and solvency monitoring purposes or for

ensuring the competitiveness of the insurance marketplace, the lead state commissioner shall

require the group capital calculation for United States operations of any non-United States

based insurance holding company system.

(e) The lead state commissioner may:

(i) exempt the ultimate controlling person from filing the annual group capital calculation; or

(ii) accept a limited group capital filing or report in accordance with criteria as specified by the

lead state commissioner in regulation.

(f) If the lead state commissioner determines that an insurance holding company system no

longer meets one or more of the requirements for an exemption from filing the group capital

calculation under this section, the insurance holding company system shall file the group

capital calculation at the next annual filing date unless the lead state commissioner gives an

extension based on reasonable grounds.

(14)

(a) The ultimate controlling person of every insurer subject to registration and also scoped into

the NAIC liquidity stress test framework shall file the results of a specific year's liquidity stress

test.

(b) The filing described in Subsection (14)(a) shall be made to the lead state insurance

commissioner of the insurance holding company system as determined by the procedures

within the Financial Analysis Handbook adopted by the NAIC.

criteria are to be measured shall be effective on January 1 of the year following the calendar

year in which the change is adopted.

(d) Insurers meeting at least one threshold of the NAIC liquidity stress test framework's scope

criteria are scoped into the NAIC liquidity stress test framework for the specified data year

unless the lead state insurance commissioner, in consultation with the NAIC Financial

Stability Task Force or the NAIC Financial Stability Task Force's successor, determines the

insurer should not be scoped into the NAIC liquidity stress test framework for that data year.

(e) Insurers that do not meet at least one threshold of the NAIC liquidity stress test framework's

scope criteria are scoped out of the NAIC liquidity stress test framework for the specified data

year, unless the lead state insurance commissioner, in consultation with the NAIC Financial

Stability Task Force or the NAIC Financial Stability Task Force's successor, determines the

insurer should be scoped into the NAIC liquidity stress test framework for that data year.

(f) To avoid having insurers scoped in and out of the NAIC liquidity stress test framework on

a frequent basis, the lead state insurance commissioner, in consultation with the Financial

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Stability Task Force or the NAIC Financial Stability Task Force's successor, shall assess

this concern as part of the lead state insurance commissioner's determination of whether an

insurer is scoped into the NAIC liquidity stress test framework for a specified data year.

(g) The performance of, and filing of the results from, a specific year's liquidity stress test shall

comply with:

(i) the NAIC liquidity stress test framework instructions and reporting templates for that year;

and

(ii) lead state insurance commissioner determinations made in conjunction with the NAIC

Financial Stability Task Force or the NAIC Financial Stability Task Force's successor,

provided within the NAIC liquidity stress test framework.

(15) The failure to file a registration statement or any summary of the registration statement or

enterprise risk filing required by this section within the time specified for the filing is a violation

of this section.

Amended by Chapter 198, 2022 General Session

31A-16-106 Standards and management of an insurer within a holding company system.

(1)

(a) Transactions within an insurance holding company system to which an insurer subject to

registration is a party are subject to the following standards:

(i) the terms shall be fair and reasonable;

(ii) agreements for cost sharing services and management shall include the provisions

required by rule made by the commissioner in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act;

(iii) charges or fees for services performed shall be reasonable;

(iv) expenses incurred and payment received shall be allocated to the insurer in conformity with

customary insurance accounting practices consistently applied;

(v) the books, accounts, and records of each party to all transactions shall be so maintained as

to clearly and accurately disclose the nature and details of the transactions, including the

accounting information necessary to support the reasonableness of the charges or fees to

the respective parties;

(vi) the insurer's surplus held for policyholders, following any dividends or distributions to

shareholder affiliates, shall be reasonable in relation to the insurer's outstanding liabilities

and shall be adequate to its financial needs;

(vii) the commissioner may require the insurer to secure and maintain a deposit held by the

commissioner or a bond, as determined by the insurer at the insurer's discretion, in an

amount determined by the commissioner not to exceed the value of the agreement in any

one year, if the commissioner:

(A) determines that the insurer is in a hazardous financial condition under Title 31A, Chapter

27a, Insurer Receivership Act, or a condition that would warrant a delinquency proceeding

under Title 31A, Chapter 27a, Insurer Receivership Act; and

(B) believes that the insurers' affiliate may be unable to fulfill an agreement with the insurer if

the insurer were put into liquidation;

(viii) all insurer records and data held by an affiliate:

(A) are the insurer's property;

(B) are subject to the insurer's control;

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(D) are segregated or readily capable of segregation, at no additional cost to the insurer, from

all other records and data;

(E) shall be provided to a receiver, at the insurer's request, including any information,

software, licensing agreement, release, waiver, or any other thing required to access the

records and data; and

(F) may be restricted in use by the affiliate if the affiliate is not operating the insurer's

business; and

(ix)

(A) all funds belonging to the insurer that an affiliate collects or holds are the exclusive

property of the insurer and subject to the control of the insurer; and

(B) if the insurer is placed into receivership, any right of offset against the funds is subject to

Title 31A, Chapter 27a, Insurance Receivership Act.

(b) The following transactions involving a domestic insurer and any person in its insurance

holding company system, including amendments or modifications of affiliate agreements

previously filed pursuant to this section, which are subject to any materiality standards

contained in Subsections (1)(a)(i) through (vi), may not be entered into unless the insurer has

notified the commissioner in writing of its intention to enter into the transaction at least 30

days before entering into the transaction, or within any shorter period the commissioner may

permit, if the commissioner has not disapproved the transaction within the period. The notice

for an amendment or modification shall include the reasons for the change and financial

impact on the domestic insurer. Informal notice shall be reported, within 30 days after a

termination of a previously filed agreement, to the commissioner for determination of the type

of filing required, if any:

(i) sales, purchases, exchanges, loans or extensions of credit, guarantees, or investments if the

transactions are equal to, or exceed as of the next preceding December 31:

(A) for nonlife insurers, the lesser of 3% of the insurer's admitted assets or 25% of surplus

held for policyholders;

(B) for life insurers, 3% of the insurer's admitted assets;

(ii) loans or extensions of credit made to any person who is not an affiliate, if the insurer makes

the loans or extensions of credit with the agreement or understanding that the proceeds of

the transactions, in whole or in substantial part, are to be used to make loans or extensions

of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer

making the loans or extensions of credit if the transactions are equal to, or exceed as of the

next preceding December 31:

(A) for nonlife insurers, the lesser of 3% of the insurer's admitted assets or 25% of surplus

held for policyholders;

(B) for life insurers, 3% of the insurer's admitted assets;

(iii) reinsurance agreements or modifications to reinsurance agreements, including an

agreement in which the reinsurance premium, a change in the insurer's liabilities, or

the projected reinsurance premium or a change in the insurer's liabilities in any of the

current and succeeding three years, equals or exceeds 5% of the insurer's surplus held

for policyholders, as of the next preceding December 31, including those agreements that

may require as consideration the transfer of assets from an insurer to a non-affiliate, if an

agreement or understanding exists between the insurer and the non-affiliate that any portion

of the assets will be transferred to one or more affiliates of the reinsurer;

(iv) all management agreements, service contracts, tax allocation agreements, and all cost-

sharing arrangements;

(v) guarantees when made by a domestic insurer, except that:

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(A) a guarantee that is quantifiable as to amount is not subject to the notice requirements of

this Subsection (1) unless it exceeds the lesser of .5% of the insurer's admitted assets or

10% of surplus held for policyholders, as of the next preceding December 31; and

(B) a guarantee that is not quantifiable as to amount is subject to the notice requirements of

this Subsection (1);

(vi) direct or indirect acquisitions or investments in a person that controls the insurer or

in an affiliate of the insurer in an amount that, together with its present holdings in the

investments, exceeds 2.5% of the insurer's surplus to policyholders, except that a direct or

indirect acquisition or investment in a subsidiary acquired pursuant to Section 31A-16-102.5,

or in a non-subsidiary insurance affiliate that is subject to this chapter, is exempt from this

Subsection (1)(b)(vi);

(vii) any material transactions, specified by rule, which the commissioner determines may

adversely affect the interests of the insurer's policyholders; and

(viii) this Subsection (1) may not be interpreted to authorize or permit any transactions which

would be otherwise contrary to law in the case of an insurer not a member of the same

holding company system.

transactions with persons within the holding company system if the purpose of the separate

transactions is to avoid the statutory threshold amount and thus to avoid the review by

the commissioner that would occur otherwise. If the commissioner determines that the

separate transactions were entered into over any 12 month period for such a purpose, the

commissioner may exercise the commissioner's authority under Section 31A-16-110.

(d) The commissioner, in reviewing transactions pursuant to Subsection (1)(b), shall consider

whether the transactions comply with the standards set forth in Subsection (1)(a) and whether

they may adversely affect the interests of policyholders.

(e) The commissioner shall be notified within 30 days of any investment of the domestic insurer

in any one corporation, if the total investment in the corporation by the insurance holding

company system exceeds 10% of the corporation's voting securities.

(2)

(a) A domestic insurer may not pay any extraordinary dividend or make any other extraordinary

distribution to its shareholders until:

(i) 30 days after the commissioner has received notice of the declaration of the dividend and

has not within the 30-day period disapproved the payment; or

(ii) the commissioner has approved the payment within the 30-day period.

(b) For purposes of this Subsection (2), an extraordinary dividend or distribution includes any

dividend or distribution of cash or other property, fair market value of which, together with that

of other dividends or distributions made within the preceding 12 months, exceeds the lesser

of:

(i) 10% of the insurer's surplus held for policyholders as of the next preceding December 31;

(ii) the net gain from operations of the insurer, if the insurer is a life insurer, or the net income, if

the insurer is not a life insurer, not including realized capital gains, for the 12-month period

ending the next preceding December 31; or

(iii) an extraordinary dividend does not include pro rata distributions of any class of the insurer's

own securities.

life insurer may carry forward net income from the previous two calendar years that has not

already been paid out as dividends. This carry-forward shall be computed by taking the net

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income from the second and third preceding calendar years, not including realized capital

gains, less dividends paid in the second and immediate preceding calendar years.

(d) Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend

or distribution, which is conditioned upon the commissioner's approval of the dividend or

distribution, and the declaration shall confer no rights upon shareholders until:

(i) the commissioner has approved the payment of the dividend or distribution; or

(ii) the commissioner has not disapproved the payment within the 30-day period referred to in

Subsection (2)(a).

(3)

(a) Notwithstanding the control of a domestic insurer by any person, the officers and directors

of the insurer may not be relieved of any obligation or liability to which they would otherwise

be subject by law, and the insurer shall be managed so as to assure its separate operating

identity consistent with this chapter.

(b) Nothing in this section precludes a domestic insurer from having or sharing a common

management or cooperative or joint use of personnel, property, or services with one or more

other persons under arrangements meeting the standards of Subsection (1)(a).

(c)

(i) Not less than one-third of the directors of a domestic insurer, and not less than one-third

of the members of each committee of the board of directors of a domestic insurer, shall

be persons who are not officers or employees of the insurer or of any entity controlling,

controlled by, or under common control with the insurer and who are not beneficial owners

of a controlling interest in the voting stock of the insurer or entity.

(ii) At least one person described in Subsection (3)(c)(i) shall be included in a quorum for the

transaction of business at a meeting of the board of directors or a committee of the board of

directors.

(d) Subsection (3)(c) does not apply to a domestic insurer if the person controlling the insurer,

such as an insurer, a mutual insurance holding company, or a publicly held corporation, has

a board of directors and committees of the board of directors that meet the requirements of

Subsection (3)(c) with respect to the controlling entity.

(e) An insurer may make application to the commissioner for a waiver from the requirements

of this Subsection (3) if the insurer's annual direct written and assumed premium, excluding

premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood

Program, is less than $300,000,000. An insurer may also make application to the

commissioner for a waiver from the requirements of this Subsection (3) based upon unique

circumstances. The commissioner may consider various factors, including:

(i) the type of business entity;

(ii) the volume of business written;

(iii) the availability of qualified board members; or

(iv) the ownership or organizational structure of the entity.

(4)

(a) For purposes of this chapter, in determining whether an insurer's surplus as regards

policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to

meet its financial needs, the following factors, among others, shall be considered:

(i) the size of the insurer as measured by its assets, capital and surplus, reserves, premium

writings, insurance in force, and other appropriate criteria;

(ii) the extent to which the insurer's business is diversified among several lines of insurance;

(iii) the number and size of risks insured in each line of business;

(iv) the extent of the geographical dispersion of the insurer's insured risks;

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(v) the nature and extent of the insurer's reinsurance program;

(vi) the quality, diversification, and liquidity of the insurer's investment portfolio;

(vii) the recent past and projected future trend in the size of the insurer's investment portfolio;

(viii) the surplus as regards policyholders maintained by other comparable insurers;

(ix) the adequacy of the insurer's reserves; and

(x) the quality and liquidity of investments in affiliates.

(b) The commissioner may treat an investment described in Subsection (4)(a)(x) as a disallowed

asset for purposes of determining the adequacy of surplus as regards policyholders whenever

in the judgment of the commissioner the investment so warrants.

Amended by Chapter 198, 2022 General Session

31A-16-107.5 Examination of registered insurers.

(1) Subject to the limitation contained in this section and the powers which the commissioner has

under Chapter 2, Administration of the Insurance Laws, relating to the examination of insurers,

the commissioner has the power to examine an insurer registered under Section 31A-16-105

and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to

the insurer by the ultimate controlling party, or by the insurance holding company system on a

consolidated basis.

(2)

(a) The commissioner may order an insurer registered under Section 31A-16-105 to produce the

records, books, or other information papers in the possession of the insurer or its affiliates as

are reasonably necessary to determine compliance with this chapter.

(b) To determine compliance with this chapter, the commissioner may order an insurer registered

under Section 31A-16-105 to produce information not in the possession of the insurer if the

insurer can obtain access to the information pursuant to contractual relationships, statutory

obligations, or other methods.

provide the commissioner a detailed explanation of the reason that the insurer cannot obtain

the information and the identity of the holder of the information.

(d) Whenever it appears to the commissioner that the detailed explanation is without merit, the

commissioner may require, after notice and hearing, the insurer to pay a penalty of $5,000 for

each day's delay, or may suspend or revoke the insurer's license.

(3) The commissioner may retain, at the registered insurer's expense, attorneys, actuaries,

accountants, and other experts not otherwise a part of the commissioner's staff, if they are

necessary to assist in the conduct of the examination under Subsection (1). Any persons

so retained are under the direction and control of the commissioner and shall act in a purely

advisory capacity.

(4) A registered insurer who produces records, books, and papers under Subsection (2) for

examination is liable for and shall pay the expense of the examination under Section

31A-2-205.

(5) If an insurer fails to comply with an order issued under this section, the commissioner may:

(a) examine the affiliates to obtain the information; or

(b) issue subpoenas, administer oaths, and examine under oath any person for purposes of

determining compliance with this section.

(6)

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(a) Upon the failure or refusal of any person to obey a subpoena under Subsection (5), the

commissioner may petition a court to enter an order compelling the witness to appear and

testify or produce documentary evidence.

(b) A person shall be obliged to attend as a witness at the place specified in the subpoena, when

subpoenaed, anywhere within the state.

78B-1-119.

(d) Fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance of

witnesses, and the witness's testimony, shall be itemized and charged against, and be paid

by, the company being examined.

Amended by Chapter 401, 2023 General Session

31A-16-108.5 Supervisory colleges.

(1) For an insurer registered under Section 31A-16-105 and in accordance with Subsection (3),

the commissioner may participate in a supervisory college for a domestic insurer that is part of

an insurance holding company system with international operations to determine compliance

by the insurer with this chapter. The powers of the commissioner with respect to supervisory

colleges include the following:

(a) initiating the establishment of a supervisory college;

(b) clarifying the membership and participation of other supervisors in the supervisory college;

the establishment of a group-wide supervisor;

(d) coordinating the ongoing activities of the supervisory college, including:

(i) planning meetings;

(ii) supervisory activities; and

(iii) processes for information sharing; and

(e) establishing a crisis management plan.

(2)

(a) A registered insurer subject to this section is liable for and shall pay the reasonable expenses

of the commissioner's participation in a supervisory college in accordance with Subsection

(3), including reasonable travel expenses.

(b) For purposes of this section, a supervisory college may be convened as either a temporary

or permanent forum for communication and cooperation between the regulators charged

with supervision of the insurer or its affiliates and the commissioner may establish a regular

assessment to the insurer for the payment of these expenses.

(3)

(a) The commissioner may participate in a supervisory college with other regulators charged with

supervision of the insurer or its affiliates, including:

(i) other state regulatory agencies;

(ii) federal regulatory agencies; or

(iii) international regulatory agencies.

(b) The commissioner may enter into agreements in accordance with Section 31A-16-109

providing the basis for cooperation between the commissioner and other regulatory agencies,

and the activities of the supervisory college, in order to assess:

(i) the business strategy;

(ii) financial position;

(iii) legal and regulatory position;

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(iv) risk exposure; and

(v) management and governance processes.

commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.

Enacted by Chapter 244, 2015 General Session

31A-16-108.6 Supervision of internationally active insurance groups.

(1)

(a) Except as otherwise provided in this section, the commissioner shall act as the group-wide

supervisor for each internationally active insurance group.

(b) In lieu of acting as the group-wide supervisor for an internationally active insurance company,

the commissioner may acknowledge a regulatory official from another jurisdiction as the

internationally active insurance group's group-wide supervisor, if the internationally active

insurance group:

(i) does not have substantial insurance operations in the United States;

(ii) has substantial insurance operations in the United States, but does not have substantial

insurance operations in the state; or

(iii) has substantial insurance operations in the United States and in the state, but in

accordance with the provisions of this section, the commissioner determines that a

regulatory official from another jurisdiction is an appropriate group-wide supervisor.

(2) In deciding whether to acknowledge another regulatory official as an internationally active

insurance group's group-wide supervisor in lieu of acting as the group-wide supervisor, the

commissioner shall:

(a) consult and cooperate with other state, federal, and international regulatory agencies; and

(b) consider:

(i) the domicile of the insurer or insurers within the internationally active insurance group that

hold the largest share of the group's written premiums, assets, or liabilities;

(ii) the domicile of the top-tiered insurer or insurers in the insurance holding company system of

the internationally active insurance group;

(iii) the location of the executive office or largest operational office of the internationally active

insurance group;

(iv) whether another regulatory official acts or seeks to act as the group-wide supervisor under

a regulatory system that the commissioner determines to be:

(A) substantially similar to the system of regulation provided under the laws of this state; or

(B) sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and

cooperation with other regulatory officials; and

(v) whether another regulatory official acting or seeking to act as the group-wide supervisor

provides the commissioner with reasonably reciprocal recognition and cooperation.

(3)

(a) Before acting as the group-wide supervisor for an internationally active insurance group, the

commissioner shall notify:

(i) the insurer registered under Section 31A-16-105; and

(ii) the ultimate controlling person within the internationally active insurance group.

(b) Within 30 days after the day on which an internationally active insurance group receives a

notification described in Subsection (3)(a), the internationally active insurance group may

provide the commissioner additional information relevant to whether the commissioner should

act as the internationally active insurance group's group-wide supervisor.

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(4) If the commissioner acts as the group-wide supervisor for an internationally active insurance

group, the commissioner may later acknowledge a regulatory official from another jurisdiction

as the group-wide supervisor for the internationally active insurance group if the commissioner:

(a) considers the factors described in Subsection (2)(b);

(b) cooperates with other regulatory officials involved with the supervision of the members of the

internationally active insurance group; and

(5) Notwithstanding any other provision of law, when a regulatory official from another jurisdiction

is acting as the group-wide supervisor for an internationally active insurance group, the

commissioner shall:

(a) acknowledge the regulatory official as the group-wide supervisor; and

(b) in accordance with Subsection (2), reevaluate whether it is appropriate to acknowledge

a regulatory official from another jurisdiction as the group-wide supervisor if a change in

circumstances results in:

(i) the insurer or insurers within the internationally active insurance group that hold the largest

share of the group's written premiums, assets, or liabilities being domiciled in the state; or

(ii) the top-tiered insurer or insurers in the insurance holding company system of the

internationally active insurance group being domiciled in the state.

(6) In accordance with Section 31A-16-107.5, upon request from the commissioner, an insurer

subject to this chapter shall provide the commissioner any information necessary to determine

the appropriate group-wide supervisor for an internationally active insurance group.

(7) The commissioner shall publish on the department's website the identity of each internationally

active insurance group for which the commissioner acts as the group-wide supervisor.

(8) If the commissioner is the group-wide supervisor of an internationally active insurance group,

the commissioner may:

(a) assess the enterprise risks within the internationally active insurance group to ensure that:

(i) management of the internationally active insurance group identifies the material financial

condition and liquidity risks to the members of the internationally active insurance group that

are engaged in the business of insurance; and

(ii) reasonable and effective mitigation measures are in place;

(b) request, from any member of the internationally active insurance group, subject to the

commissioner's supervision, information necessary and appropriate to assess enterprise

risk, including information about the members of the internationally active insurance group

regarding:

(i) governance, risk assessment, and management;

(ii) capital adequacy; or

(iii) material intercompany transactions;

members of the internationally active insurance group are domiciled, compel development

and implementation of reasonable measures designed to ensure that the internationally active

insurance group is able to timely recognize and mitigate enterprise risks to members of the

internationally active insurance group that are engaged in the business of insurance;

(d) communicate with other state, federal, and international regulatory agencies for members

within the internationally active insurance group;

(e) subject to the confidentiality provisions of Section 31A-16-109, share relevant information:

(i) through a supervisory college in accordance with Section 31A-16-108.5; or

(ii) by entering into an agreement or obtaining documentation:

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(A) with or from an insurer registered under Section 31A-16-105, a member of the

internationally active insurance group, or a state, federal, or international regulatory

agency for members of the internationally active insurance group; and

(B) that provides the basis for or otherwise clarifies the commissioner's role as group-wide

supervisor, including a provision for resolving disputes with another regulatory official; and

(f) engage in any other group-wide supervision activity, consistent with an authority and purpose

enumerated in this section, as the commissioner determines necessary.

(9) An agreement or documentation described in Subsection (8)(e) may not serve as evidence

in any proceeding that an insurer or person within an insurance holding company system not

domiciled or incorporated in the state:

(a) is doing business in the state; or

(b) is subject to jurisdiction in the state.

(10)

(a) If the commissioner acknowledges as a group-wide supervisor another regulatory official from

a jurisdiction that the NAIC does not accredit as a group-wide supervisor, the commissioner

may reasonably cooperate, through supervisory colleges or otherwise, with the group-wide

supervision undertaken by the group-wide supervisor, provided that:

(i) the commissioner's cooperation is in compliance with the laws of this state; and

(ii) the group-wide supervisor also recognizes and cooperates with the commissioner's activities

as the group-wide supervisor for other internationally active insurance groups where

applicable.

(b) Where the recognition and cooperation described in Subsection (10)(a)(ii) is not reasonably

reciprocal, the commissioner may refuse recognition and cooperation.

(11) The commissioner may in accordance with Title 63G, Chapter 3, Utah Administrative

Rulemaking Act, make rules necessary for the administration of this section.

(12) An insurer subject to this section is liable for and shall pay the reasonable expenses of the

commissioner's participation in the administration of this section, including:

(a) the engagement of an attorney, actuary, or other professional; and

(b) all reasonable travel expenses.

Enacted by Chapter 193, 2019 General Session

31A-16-109 Confidentiality of information obtained by commissioner.

(1)

(a) Documents, materials, or information obtained by or disclosed to the commissioner or

any other person in the course of an examination or investigation made under Section

31A-16-107.5, and all information reported or provided to the department under Section

31A-16-105 or 31A-16-108.6, is proprietary, contains trade secrets, and is confidential.

(b) Any confidential document, material, or information described in Subsection (1)(a) is

not subject to subpoena and may not be made public by the commissioner or any other

person without the permission of the insurer, except the confidential document, material, or

information may be provided to the insurance departments of other states, without the prior

written consent of the insurer to which the confidential document, material, or information

pertains.

with Section 31A-16-105 from an insurance holding company supervised by the Federal

Reserve Board or any United States group-wide supervisor:

(i) a group capital calculation;

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(ii) a group capital ratio produced within the group capital calculation; or

(iii) group capital information.

(d) The commissioner shall maintain the confidentiality of the liquidity stress test results,

supporting disclosures, and any liquidity stress test information received in accordance with

Section 31A-16-105 from an insurance holding company supervised by the Federal Reserve

Board and non-United States group-wide supervisors.

(2) The commissioner and any person who receives documents, materials, or other information

while acting under the authority of the commissioner or with whom the documents, materials,

or other information are shared pursuant to this chapter shall keep confidential any confidential

documents, materials, or information subject to Subsection (1).

(3) To assist in the performance of the commissioner's duties, the commissioner:

(a) may share documents, materials, proprietary and trade secret documents, or other

information, including the confidential documents, materials, or information subject

to Subsection (1), with the following if the recipient agrees in writing to maintain the

confidentiality status of the document, material, or other information, and has verified in

writing the legal authority to maintain confidentiality:

(i) a state, federal, or international regulatory agency;

(ii) the NAIC;

(iii) a third-party consultant designated by the commissioner; or

(iv) a state, federal, or international law enforcement authority, including a member of a

supervisory college described in Section 31A-16-108.5;

(b) notwithstanding Subsection (1), may only share confidential documents, material, or

information reported pursuant to Section 31A-16-105 or 31A-16-108.6 with a commissioner

of a state having statutes or regulations substantially similar to Subsection (1) and who has

agreed in writing not to disclose the documents, material, or information;

information, including otherwise confidential documents, materials, or information from:

(i) the NAIC or an NAIC affiliate or subsidiary; or

(ii) a regulatory or law enforcement official of a foreign or domestic jurisdiction;

(d) shall maintain as confidential any document, material, or information received under this

section with notice or the understanding that it is confidential under the laws of the jurisdiction

that is the source of the document, material, or information; and

(e) shall enter into written agreements with the NAIC or a third-party consultant designated by

the commissioner governing sharing and use of information provided pursuant to this chapter

consistent with this Subsection (3) that shall:

(i) specify procedures and protocols regarding the confidentiality and security of information

shared with the NAIC and NAIC affiliates and subsidiaries pursuant to this chapter, including

procedures and protocols for sharing by the NAIC with other state, federal, or international

regulators;

(ii) specify that ownership of information shared with the NAIC and NAIC affiliates and

subsidiaries pursuant to this chapter remains with the commissioner and the NAIC's use of

the information is subject to the direction of the commissioner;

(iii) require prompt notice to be given to an insurer whose confidential information in the

possession of the NAIC pursuant to this chapter is subject to a request or subpoena to the

NAIC for disclosure or production; and

(iv) require the NAIC and NAIC affiliates and subsidiaries to consent to intervention by an

insurer in any judicial or administrative action in which the NAIC and NAIC affiliates and

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subsidiaries may be required to disclose confidential information about the insurer shared

with the NAIC and NAIC affiliates and subsidiaries pursuant to this chapter.

(4) The sharing of information by the commissioner pursuant to this chapter does not constitute a

delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for

the administration, execution, and enforcement of this chapter.

(5) A waiver of any applicable claim of confidentiality in the documents, materials, or information

does not occur as a result of disclosure to the commissioner under this section or as a result of

sharing as authorized in Subsection (3).

(6) Documents, materials, or other information in the possession or control of the NAIC pursuant to

this chapter are:

(a) confidential, not public records, and not open to public inspection; and

(b) not subject to Title 63G, Chapter 2, Government Records Access and Management Act.

(7)

(a) The group capital calculation, including the resulting group capital ratio, and the liquidity

stress test, including the liquidity stress test results and supporting disclosures, are:

(i) regulatory tools for assessing risk and capital adequacy; and

(ii) not a method to rank insurers or insurance holding company systems generally.

(b) Except as provided in Subsection (7)(c), an insurer, broker, or other person engaged in the

business of insurance may not make, disseminate, or circulate to the public a materially false

or misleading statement relating to an insurer's or insurer group's, or a component of an

insurer's or insurer group's:

(i) group capital calculation;

(ii) group capital ratio;

(iii) liquidity stress test results; or

(iv) liquidity stress test supporting disclosures.

Subsection (7)(b) is materially false or misleading, the insurer may publish an announcement

in a written publication for the sole purpose of rebutting the materially false or misleading

statement.

Amended by Chapter 198, 2022 General Session

31A-16-110 Enjoining violations -- Voting securities acquired in violation of law or rule.

(1)

(a) Whenever it appears to the commissioner that any insurer or any director, officer, employee,

or agent of an insurer has committed or is about to commit a violation of this chapter or any

rule or order issued by the commissioner under this chapter, the commissioner may petition a

court for an order enjoining the insurer or a director, officer, employee, or agent of the insurer

from the violation.

(b) The commissioner may also request other equitable relief which the nature of the case and

the interest of the insurer's policyholders, creditors, and shareholders or the public require.

(2)

(a) No security which is the subject of any agreement or arrangement regarding acquisition,

or which is acquired or to be acquired, in contravention of the provisions of this chapter

or any rule or order issued by the commissioner under this chapter, may be voted at any

shareholders' meeting, or may be counted for quorum purposes.

(b) Any action of shareholders requiring the affirmative vote of a percentage of shares may be

taken as though those securities were not issued and outstanding.

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securities, unless the action would materially affect control of the insurer or unless the court

has ordered that voting invalidates the action.

(d) If an insurer or the commissioner has reason to believe that any security of the insurer has

been or is about to be acquired in contravention of the provisions of this chapter or any rule

or order issued by the commissioner under this chapter, the insurer or the commissioner may

petition a court to enjoin any offer, request, invitation, or agreement of acquisition which is

made in contravention of Section 31A-16-103 or any rule or order issued by the commissioner

under this chapter to enjoin the voting of that acquired security.

(e) On a petition under Subsection (2)(d), a court may:

(i) void any vote of that security if the vote has already been cast at any meeting of

shareholders; and

(ii) grant other equitable relief which the nature of the case and the interests of the insurer's

policyholders, creditors, and shareholders or the public require.

(3)

(a) If a person has acquired or is proposing to acquire any voting securities in violation of this

chapter or in violation of a rule or order issued by the commissioner under this chapter, the

insurer or the commissioner may petition a court with jurisdiction under Title 78A, Judiciary

and Judicial Administration.

(b) If a petition is filed under Subsection (3)(a), a court may:

(i) seize or sequester any voting securities of the insurer owned directly or indirectly by that

person; and

(ii) issue orders with respect to that person and those securities which the court considers

appropriate to effectuate the provisions of this chapter.

(4) For the purposes of this chapter, the situs of the ownership of the securities of domestic

insurers is considered to be in this state.

Amended by Chapter 401, 2023 General Session

31A-16-111 Required sale of improperly acquired stock -- Penalties.

(1) If the commissioner finds that the acquiring person has not substantially complied with the

requirements of this chapter in acquiring control of a domestic insurer, the commissioner may

require the acquiring person to sell the acquiring person's stock of the domestic insurer in the

manner specified in Subsection (2).

(2)

(a) The commissioner shall effect the sale required by Subsection (1) in the manner which, under

the particular circumstances, appears most likely to result in the payment of the full market

value for the stock by persons who have the collective competence, experience, financial

resources, and integrity to obtain approval under Subsection 31A-16-103(8).

(b) Sales made under this section are subject to approval by a court with jurisdiction under Title

78A, Judiciary and Judicial Administration, which court has the authority to effect the terms of

the sale.

(3) The proceeds from sales made under this section shall be distributed first to the person

required by this section to sell the stock, but only up to the amount originally paid by the person

for the securities. Additional sale proceeds shall be paid to the General Fund.

(4) The person required to sell and persons related to or affiliated with the seller may not purchase

the stock at the sale conducted under this section.

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(5)

(a) A director or officer of an insurance holding company system violates this chapter if the

director or officer knowingly:

(i) participates in or assents to a transaction or investment that:

(A) has not been properly reported or submitted pursuant to:

(I) Subsections 31A-16-105(1) and (2); or

(II) Subsection 31A-16-106(1)(b); or

(B) otherwise violates this chapter; or

(ii) permits any of the officers or agents of the insurer to engage in a transaction or investment

described in Subsection (5)(a)(i).

(b) A director or officer in violation of Subsection (5)(a) shall pay, in the director's or officer's

individual capacity, a civil penalty of not more than $20,000 per violation:

(i) upon a finding by the commissioner of a violation; and

(ii) after notice and hearing before the commissioner.

take into account:

(i) the appropriateness of the penalty with respect to the gravity of the violation;

(ii) the history of previous violations; and

(iii) any other matters that justice requires.

(6)

(a) When it appears to the commissioner that any insurer or any director, officer, employee, or

agent of the insurer, has committed a willful violation of this chapter, the commissioner may

refer the violation to the appropriate prosecutor.

(b)

(i) An insurer that willfully violates this chapter may be fined not more than $20,000.

(ii) Any individual who willfully violates this chapter is guilty of a third degree felony, and upon

conviction may be:

(A) fined in that person's individual capacity not more than $5,000;

(B) imprisoned; or

(7) This section does not limit the other sanctions applicable to violations of this title under Section

31A-2-308.

Amended by Chapter 401, 2023 General Session, (Coordination Clause)

Amended by Chapter 401, 2023 General Session

31A-16-112 Sanctions.

(1)

(a) Notwithstanding Section 31A-2-308, the following sanctions apply:

(i) An insurer failing, without just cause, to file a registration statement required by this chapter

is required, after notice and hearing, to pay a penalty of $10,000 for each day's delay, to be

recovered by the commissioner and the penalty so recovered shall be paid into the General

Fund.

(ii) The maximum penalty under this section is $250,000.

(b) The commissioner may reduce the penalty if the insurer demonstrates to the commissioner

that the imposition of the penalty would constitute a financial hardship to the insurer.

(2)

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(a) A director or officer of an insurance holding company system who knowingly violates,

participates in, or assents to, or who knowingly shall permit any of the officers or agents of the

insurer to engage in transactions or make investments that have not been properly reported

or submitted pursuant to Subsection 31A-16-105(1), 31A-16-106(1)(b), or 31A-16-106(2),

or that violates this chapter, shall pay, in the director's or officer's individual capacity, a civil

forfeiture of not more than $10,000 per violation, notwithstanding Section 31A-2-308, after

notice and hearing before the commissioner.

(b) In determining the amount of the civil forfeiture, the commissioner shall take into account

the appropriateness of the forfeiture with respect to the gravity of the violation, the history of

previous violations, and such other matters as justice may require.

(3)

(a) Whenever it appears to the commissioner that any insurer subject to this chapter or a director,

officer, employee, or agent of the insurer has engaged in any transaction or entered into a

contract that is subject to Section 31A-16-106 and that would not have been approved had

the approval been requested, the commissioner may order the insurer to cease and desist

immediately any further activity under that transaction or contract.

(b) After notice and hearing, the commissioner may also order the insurer to void any contract

and restore the status quo if the action is in the best interest of the policyholders, creditors, or

the public.

(4)

(a) Whenever it appears to the commissioner that an insurer or any director, officer, employee,

or agent of the insurer has committed a willful violation of this chapter, the commissioner may

refer the violation to the appropriate prosecutor.

(b) An insurer that willfully violates this chapter may be fined not more than $250,000

notwithstanding Section 31A-2-308.

capacity not more than $100,000 notwithstanding Section 31A-2-308 and is guilty of a third-

degree felony.

(5)

(a) An officer, director, or employee of an insurance holding company system who willfully

and knowingly subscribes to or makes or causes to be made any false statements, false

reports, or false filings with the intent to deceive the commissioner in the performances of the

commissioner's duties under this chapter, is guilty of a third-degree felony.

(b) Any fines imposed shall be paid by the officer, director, or employee in the officer's, director's,

or employee's individual capacity.

(6) Whenever it appears to the commissioner that a person has committed a violation of Section

31A-16-103 and that prevents the full understanding of the enterprise risk to the insurer

by affiliates or by the insurance holding company system, the violation may serve as an

independent basis for disapproving dividends or distributions and for placing the insurer under

an order of supervision in accordance with Section 31A-27-503.

Amended by Chapter 401, 2023 General Session

31A-16-113 Receivership.

Whenever it appears to the commissioner that a person has committed a violation of this

chapter that so impairs the financial condition of a domestic insurer as to threaten insolvency

or make the further transaction of business by it hazardous to its policyholders, creditors,

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shareholders, or the public, then the commissioner may proceed as provided in Section

31A-16-114 to take possession of the property of the domestic insurer and to conduct its business.

Enacted by Chapter 244, 2015 General Session

31A-16-114 Recovery.

(1) If an order for liquidation or rehabilitation of a domestic insurer is entered, the receiver

appointed under the order shall have a right to recover on behalf of the insurer:

(a) from any parent corporation, holding company, or person or affiliate who otherwise controlled

the insurer, the amount of distributions other than distributions of shares of the same class of

stock paid by the insurer on its capital stock; or

(b) any payment in the form of a bonus, termination settlement, or extraordinary lump sum salary

adjustment made by the insurer or its subsidiary to a director, officer, or employee, when the

distribution or payment pursuant to Subsection (1)(a) or this Subsection (1)(b) is made at any

time during the one year preceding the petition for liquidation, conservation, or rehabilitation,

as the case may be, subject to the limitations of Subsections (2), (3), and (4).

(2) A distribution may not be recovered if the parent or affiliate shows that when paid the

distribution was lawful and reasonable and that the insurer did not know and could not

reasonably have known that the distribution might adversely affect the ability of the insurer to

fulfill its contractual obligations.

(3) A person who was a parent corporation or holding company or a person who otherwise

controlled the insurer or affiliate at the time the distributions were paid shall be liable up to the

amount of distributions or payments under Subsection (1) that the person received. A person

who otherwise controlled the insurer at the time the distributions were declared is liable up to

the amount of distributions that would have been received if they had been paid immediately. If

two or more persons are liable with respect to the same distributions, they shall be jointly and

severally liable.

(4) The maximum amount recoverable under this section shall be the amount needed in excess of

all other available assets of the impaired or insolvent insurer to pay the contractual obligations

of the impaired or insolvent insurer and to reimburse any guaranty funds.

(5) To the extent that any person liable under Subsection (3) is insolvent or otherwise fails to pay

claims due from the person, its parent corporation, holding company, or person who otherwise

controlled it at the time the distribution was paid, are jointly and severally liable for any resulting

deficiency in the amount recovered from the parent corporation or holding company or person

who otherwise controlled it.

Enacted by Chapter 244, 2015 General Session

31A-16-115 Revocation, suspension, or nonrenewal of insurer's license.

Whenever it appears to the commissioner that a person has committed a violation of this

chapter that makes the continued operation of an insurer contrary to the interests of policyholders

or the public, the commissioner may, after giving notice and an opportunity to be heard, suspend,

revoke, or refuse to renew the insurer's license or authority to do business in this state for such

period as the commissioner finds is required for the protection of policyholders or the public. Any

such determination shall be accompanied by specific findings of fact and conclusions of law.

Enacted by Chapter 244, 2015 General Session

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31A-16-116 Rules and orders.

The commissioner in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking

Act, may make rules necessary to carry out this chapter. The commissioner may issue orders as

is necessary to carry out this chapter.

Enacted by Chapter 244, 2015 General Session

31A-16-117 Judicial review -- Mandamus.

(1) A person aggrieved by an act, determination, rule, or order or any other action of the

commissioner pursuant to this chapter may seek judicial review in accordance with Title 63G,

Chapter 4, Administrative Procedures Act.

(2) The filing of an appeal pursuant to this section shall stay the application of any rule, order,

or other action of the commissioner to the appealing party unless the court, after giving party

notice and an opportunity to be heard, determines that a stay would be detrimental to the

interest of policyholders, shareholders, creditors, or the public.

(3) A person aggrieved by a failure of the commissioner to act or make a determination required

by this chapter may petition the district court in Salt Lake County for writ in the nature of

a mandamus or a peremptory mandamus directing the commissioner to act or make a

determination.

Amended by Chapter 401, 2023 General Session

31A-16-118 Conflict with other laws.

If any law or part of a law of this state is inconsistent with this chapter, this chapter governs.

Enacted by Chapter 244, 2015 General Session

31A-16-119 Severability.

If any chapter, section, or subsection of this chapter or the application of any chapter, section,

or subsection to any person or circumstance is held invalid, the remainder of the provisions of this

chapter shall be given effect without the invalid provision or application. The provisions of this

chapter are severable.

Enacted by Chapter 244, 2015 General Session

Chapter 16a

Risk Management and Own Risk and Solvency Assessment Act

31A-16a-101 Title -- Scope.

(1) This chapter is known as the "Risk Management and Own Risk and Solvency Assessment Act."

(2) This chapter applies to an insurer domiciled in this state unless exempt pursuant to Section

31A-16a-106.

Enacted by Chapter 168, 2017 General Session

31A-16a-103 Risk management framework.

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An insurer shall maintain a risk management framework to assist the insurer with identifying,

assessing, monitoring, managing, and reporting on its material and relevant risks. This requirement

may be satisfied if the insurance group of which the insurer is a member maintains a risk

management framework applicable to the operations of the insurer.

Enacted by Chapter 168, 2017 General Session

31A-16a-104 Own risk and solvency assessment requirement.

Subject to Section 31A-16a-106, an insurer, or the insurance group of which the insurer is a

member, shall regularly conduct an own risk and solvency assessment consistent with a process

comparable to the ORSA guidance manual. The insurer or insurance group shall conduct the own

risk and solvency assessment no less than annually but also at any time when there are significant

changes to the risk profile of the insurer or the insurance group of which the insurer is a member.

Enacted by Chapter 168, 2017 General Session

31A-16a-105 ORSA summary report.

(1)

(a) Upon the commissioner's request, and no more than once each year, an insurer shall submit

to the commissioner an ORSA summary report or any combination of reports that together

contain the information described in the ORSA guidance manual, applicable to the insurer,

the insurance group of which it is a member, or both.

(b) Notwithstanding a request from the commissioner, if the insurer is a member of an insurance

group, the insurer shall submit the one or more reports required by this Subsection (1) if the

commissioner is the lead state commissioner of the insurance group as determined by the

procedures within the Financial Analysis Handbook adopted by the National Association of

Insurance Commissioners.

(2) The one or more reports required under Subsection (1) shall include a signature of the insurer's

or insurance group's chief risk officer or other executive having responsibility for the oversight

of the insurer's enterprise risk management process attesting to the best of the executive's

belief and knowledge that:

(a) the insurer applies the enterprise risk management process described in the ORSA summary

report; and

(b) a copy of the report has been provided to the insurer's board of directors or the appropriate

committee of the board of directors.

(3) An insurer may comply with Subsection (1) by providing the most recent and substantially

similar one or more reports provided by the insurer or another member of an insurance group

of which the insurer is a member to the commissioner of another state or to a supervisor or

regulator of a foreign jurisdiction, if that report provides information that is comparable to the

information described in the ORSA guidance manual. A report that is in a language other than

English must be accompanied by a translation of that report into the English language.

Enacted by Chapter 168, 2017 General Session

31A-16a-106 Exemption.

(1) An insurer shall be exempt from the requirements of this chapter, if:

(a) the insurer has annual direct written and unaffiliated assumed premium, including

international direct and assumed premium, but excluding premiums reinsured with the

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Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000;

and

(b) the insurance group of which the insurer is a member has annual direct written and

unaffiliated assumed premium, including international direct and assumed premium, but

excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal

Flood Program, less than $1,000,000,000.

(2) If an insurer qualifies for exemption pursuant to Subsection (1)(a), but the insurance group

of which the insurer is a member does not qualify for exemption pursuant to Subsection

(1)(b), the ORSA summary report that is required pursuant to Section 31A-16a-105 shall

include every insurer within the insurance group. This requirement may be satisfied by the

submission of more than one ORSA summary report for any combination of insurers provided

any combination of reports includes every insurer within the insurance group.

(3) If an insurer does not qualify for exemption pursuant to Subsection (1)(a), but the insurance

group of which it is a member qualifies for exemption pursuant to Subsection (1)(b), the only

ORSA summary report that may be required pursuant Section 31A-16a-105 shall be the report

applicable to that insurer.

(4) An insurer that does not qualify for exemption pursuant to Subsection (1) may apply to

the commissioner for a waiver from the requirements of this chapter based upon unique

circumstances. In deciding whether to grant the insurer's request for waiver, the commissioner

may consider the type and volume of business written, ownership and organizational structure,

and any other factor the commissioner considers relevant to the insurer or insurance group

of which the insurer is a member. If the insurer is part of an insurance group with insurers

domiciled in more than one state, the commissioner shall coordinate with the lead state

commissioner and with the other domiciliary commissioners in considering whether to grant the

insurer's request for a waiver.

(5) Notwithstanding the exemptions stated in this section:

(a) the commissioner may require that an insurer maintain a risk management framework,

conduct an own risk and solvency assessment, and file an ORSA summary report based

on unique circumstances, including the type and volume of business written, ownership and

organizational structure, federal agency requests, and international supervisor requests; or

(b) the commissioner may require that an insurer maintain a risk management framework,

conduct an own risk and solvency assessment and file an ORSA summary report if the

insurer has risk-based capital for company action level event as set forth in Sections

31A-17-601 through 31A-17-613, meets one or more of the standards of an insurer

considered to be in hazardous financial condition as defined in Section 31A-27a-101, or

otherwise exhibits qualities of a troubled insurer as determined by the commissioner.

(6) If an insurer that qualifies for an exemption pursuant to Subsection (1) subsequently no longer

qualifies for that exemption due to changes in premium as reflected in the insurer's most

recent annual statement or in the most recent annual statements of the insurers within the

insurance group of which the insurer is a member, the insurer has one calendar year following

the calendar year the threshold is exceeded to comply with the requirements of this chapter.

Enacted by Chapter 168, 2017 General Session

31A-16a-107 Contents of ORSA summary report.

(1) The ORSA summary report shall be prepared consistent with the ORSA guidance manual,

subject to the requirements of Subsection (2). Documentation supporting information shall be

maintained and made available upon examination or upon request of the commissioner.

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(2) The review of the ORSA summary report, and any additional requests for information, shall be

made using similar procedures as used in the analysis and examination of multi-state or global

insurers and insurance groups.

Enacted by Chapter 168, 2017 General Session

31A-16a-108 Confidentiality.

(1)

(a) A document, material, or other information, including the ORSA summary report, in the

possession of or control of the department that is obtained by, created by, or disclosed to the

commissioner or any other person under this chapter, is recognized by this state as being

proprietary and to contain trade secrets. The document, material, or other information is

confidential and may not be subject to Title 63G, Chapter 2, Government Records Access

and Management Act, and may not be made public by the commissioner or any other person

without the permission of the insurer.

(b) Notwithstanding Subsection (1)(a), the commissioner may use a document, material, or

other information in furtherance of any regulatory or legal action brought as a part of the

official duties. The commissioner may not otherwise make the document, material, or other

information public without the prior written consent of the insurer.

(2) The commissioner and any person who receives a document, material, or other information

related to an own risk and solvency assessment, through examination or otherwise, while

acting under the authority of the commissioner or with whom the document, material, or other

information is shared pursuant to this chapter shall keep the document, material, or other

information confidential.

(3) To assist in the performance of the commissioner's regulatory duties, the commissioner:

(a) may, upon request, share a document, material, or other information related to an own risk

solvency assessment, including a confidential document, material, or information subject

to Subsection (1), including proprietary and trade secret documents and materials with

other state, federal, and international financial regulatory agencies, including members

of any supervisory college as described in the Section 31A-16-108.5, with the National

Association of Insurance Commissioners and with any third-party consultants designated by

the commissioner, provided that the recipient agrees in writing to maintain the confidentiality

of documents, materials, or other information related to an own risk and solvency assessment

and has verified in writing the legal authority to maintain confidentiality;

(b) may receive a document, material, or other information related to an own risk and solvency

assessment, including an otherwise confidential document, material, or information, including

proprietary and trade secret information or documents, from regulatory officials of other

foreign or domestic jurisdictions, including members of any supervisory college as described

in Section 31A-16-108.5 and from the National Association of Insurance Commissioners, and

shall maintain as confidential a document, material, or information received with notice or the

understanding that the document, material, or information is confidential under the laws of the

jurisdiction that is the source of the document, material, or information; and

Commissioners or a third-party consultant governing sharing and use of information provided

pursuant to this chapter, consistent with this Subsection (3) that shall:

(i) specify procedures and protocols regarding the confidentiality and security of information

shared with the National Association of Insurance Commissioners or a third-party consultant

pursuant to this chapter, including procedures and protocols for sharing by the National

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Association of Insurance Commissioners with other state regulators from states in which

the insurance group has domiciled insurers with the agreement providing that the recipient

agrees in writing to maintain the confidentiality of a document, material, or other information

related to an own risk and solvency assessment and verifies in writing the legal authority to

maintain confidentiality;

(ii) specify that ownership of information shared with the National Association of Insurance

Commissioners or a third-party consultant pursuant to this chapter remains with the

commissioner, and that the National Association of Insurance Commissioners' or a third-

party consultant's use of the information is subject to the direction of the commissioner;

(iii) prohibit the National Association of Insurance Commissioners or third-party consultant from

storing the information shared pursuant to this chapter in a permanent database after the

underlying analysis is completed;

(iv) require prompt notice to be given to an insurer whose confidential information in the

possession of the National Association of Insurance Commissioners or a third-party

consultant pursuant to this chapter is subject to a request or subpoena to the National

Association of Insurance Commissioners or a third-party consultant for disclosure or

production;

(v) require the National Association of Insurance Commissioners or a third-party consultant

to consent to intervention by an insurer in any judicial or administrative action in which

the National Association of Insurance Commissioners or a third-party consultant may be

required to disclose confidential information about the insurer shared with the National

Association of Insurance Commissioners or a third-party consultant pursuant to this chapter;

and

(vi) in the case of an agreement involving a third-party consultant, provide for the insurer's

written consent.

(4) The sharing of information or a document by the commissioner pursuant to this chapter does

not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely

responsible for the administration, execution, and enforcement of this chapter.

(5) A waiver of an applicable claim of confidentiality in a document, proprietary and trade-secret

material, or other information related to an own risk and solvency assessment may not occur

as a result of disclosure of the own risk and solvency assessment related information or a

document to the commissioner under this section or as a result of sharing as authorized in this

chapter.

(6) A document, material, or other information in the possession or control of the National

Association of Insurance Commissioners or a third-party consultant pursuant to this chapter is:

(a) confidential, not a public record, and not open to public inspection; and

(b) not subject to Title 63G, Chapter 2, Government Records Access and Management Act.

Enacted by Chapter 168, 2017 General Session

31A-16a-109 Sanctions.

An insurer failing, without just cause, to timely file the ORSA summary report as required in

this chapter is required, after notice and hearing, is subject to a penalty under Section 31A-2-308

for each day's delay, to be recovered by the commissioner and the penalty so recovered shall be

paid into the General Fund. The maximum penalty under this section is a penalty permitted under

Section 31A-2-308. The commissioner may reduce the penalty if the insurer demonstrates to the

commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.

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Enacted by Chapter 168, 2017 General Session

31A-16a-110 Severability clause.

If a provision of this chapter, or the application of this chapter to any person or circumstance, is

held invalid, the invalidation does not affect the provisions or applications of this chapter that can

be given effect without the invalid provision or application, and to that end the provisions of this

chapter are severable.

Enacted by Chapter 168, 2017 General Session

Chapter 16b

Corporate Governance Annual Disclosure Act

31A-16b-101 Title.

This chapter is known as the "Corporate Governance Annual Disclosure Act."

Enacted by Chapter 193, 2019 General Session

31A-16b-102 Administration and scope.

(1) The commissioner is solely responsible for the administration and enforcement of the

provisions of this chapter.

(2) This chapter does not:

(a) prescribe or impose corporate governance standards or internal procedures beyond what is

required under applicable state corporate law; or

(b) limit the commissioner's authority, or the rights or obligations of third parties, under Chapter 2,

Administration of the Insurance Laws.

(3) The requirements of this chapter apply to each insurer domiciled in the state.

Enacted by Chapter 193, 2019 General Session

31A-16b-103 Disclosure requirement.

(1) An insurer, or the insurance group of which the insurer is a member, shall on or before June

1 of each year submit to the commissioner a corporate governance annual disclosure that

contains the information required under Section 31A-16b-105.

(2) Notwithstanding a request from the commissioner described in Subsection (4), if an insurer is a

member of an insurance group, the insurer shall submit the report required under this section to

the commissioner of the lead state for the insurance group in accordance with:

(a) the laws of the lead state; and

(b) the procedures outlined in the most recent Financial Analysis Handbook adopted by the

NAIC.

(3) The corporate governance annual disclosure described in Subsection (1) shall include a

signature:

(a) of the insurer's or insurance group's chief executive officer or corporate secretary; and

(b) attesting to the best of the signatory's belief and knowledge that:

(i) the insurer or insurance group has implemented the corporate governance practices; and

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(ii) a copy of the disclosure has been provided to the insurer's or insurance group's board of

directors or the appropriate committee thereof.

(4) An insurer not required to submit a corporate governance annual disclosure under this

section shall submit a corporate governance annual disclosure to the commissioner upon the

commissioner's request.

(5)

(a) For purposes of completing a corporate governance annual disclosure, an insurer or

insurance group may provide information regarding corporate governance at one of the

following levels:

(i) at the ultimate controlling parent level;

(ii) at an intermediate holding company level; or

(iii) at the individual legal entity level.

(b) An insurer or insurance group shall consider making each corporate governance annual

disclosure at the level at which the insurer or insurance group:

(i) determines the insurer or insurance group's risk appetite;

(ii)

(A) collectively oversees the earnings, capital, liquidity, operations, and reputation of the

insurer; and

(B) coordinates and exercises the supervision of earnings, capital, liquidity, operations, and

reputation of the insurer; or

(iii) places legal liability for failure of general corporate governance duties.

(6) If an insurer or insurance group chooses a level of reporting described in Subsection (5), it shall

indicate:

(a) which of the three levels the insurer or insurance group chose; and

(b) explain any subsequent change in the level of reporting.

(7) An insurer may choose not to include certain information in a corporate governance annual

disclosure, if:

(a) the information is substantially similar to information included in another document submitted

to the commissioner, including a proxy statement filed in conjunction with Section 31A-16-105

or another state or federal filing provided to the department; and

(b) the insurer cross references the document described in Subsection (7)(a) in the corporate

governance annual disclosure.

(8) A review of a corporate governance annual disclosure or any additional request for information

related to a corporate governance annual disclosure shall be made through the lead state as

determined by the procedures outlined in the most recent Financial Analysis Handbook adopted

by the NAIC.

Enacted by Chapter 193, 2019 General Session

31A-16b-104 Rulemaking.

(1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

commissioner may make rules to implement and administer this chapter.

(2) The commissioner may issue orders as is necessary to carry out this chapter.

Enacted by Chapter 193, 2019 General Session

31A-16b-105 Contents of corporate governance annual disclosure.

(1)

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(a) A corporate governance annual disclosure shall include information sufficient to provide

the commissioner a clear understanding of the insurer's or insurance group's corporate

governance structure, policies, and practices.

(b) An insurer or insurance group has discretion to determine the information the insurer

or insurance group includes in a corporate governance annual disclosure, provided the

information complies with Subsection (1)(a).

(2) The commissioner may request additional information that the commissioner determines

material and necessary to provide the commissioner with a clear understanding of the insurer's

or insurance group's:

(a) corporate governance policies;

(b) reporting and information systems; or

(3) An insurer or insurance group shall maintain and make available upon request of the

commissioner:

(a) documentation; and

(b) supporting information.

Enacted by Chapter 193, 2019 General Session

31A-16b-106 Confidentiality.

(1) A document, material, or other information, including a corporate governance annual

disclosure, is considered proprietary and to contain a trade secret if the document, material, or

other information is:

(a) in the control or possession of the department; and

(b) obtained by, created by, or disclosed to the commissioner or any other person in accordance

with this chapter.

(2) A document, material, or other information described in Subsection (1) is:

(a) confidential and privileged;

(b) classified as a protected record under Title 63G, Chapter 2, Government Records Access and

Management Act;

(i) subpoena; or

(ii) discovery; and

(d) not admissible as evidence in any private civil action.

(3)

(a) The commissioner may use a document, material, or other information described in

Subsection (1) in the furtherance of a regulatory or legal action brought as a part of the

commissioner's duties.

(b) Except as described in Subsection (3)(a), the commissioner may not make a document,

material, or other information described in Subsection (1) public without the prior written

consent of the insurer or insurance group.

(4) Nothing in this section requires written consent of the insurer or insurance group before

the commissioner shares or receives, in accordance with Subsection (6), a document,

material, or other information described in Subsection (1) to assist in the performance of the

commissioner's duties.

(5) The following may not testify in any private civil action regarding a document, material, or other

information described in Subsection (1):

(a) the commissioner; or

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(b) a person:

(i) who receives the document, material, or other information, through examination or otherwise,

while acting under the authority of the commissioner; or

(ii) with whom the document, material, or other information is shared in accordance with this

chapter.

(6) To carry out the commissioner's duties, the commissioner may:

(a) upon request, share a document, material, or other information described in Subsection (1)

with:

(i) a state, federal, or international financial regulatory agency, including a member of a

supervisory college as defined in Section 31A-16-108.5; or

(ii) the NAIC or a third-party consultant retained in accordance with Section 31A-16b-107, if the

recipient:

(A) agrees in writing to maintain the confidentiality and privileged status of the document,

material, or other information; and

(B) verifies in writing the legal authority to maintain confidentiality; or

(b) receive documents, materials, or other information related to a corporate governance annual

disclosure, including:

(i) otherwise confidential and privileged documents, materials, or other information; and

(ii) proprietary and trade secret information or documents from:

(A) a regulatory official of a state, federal, or international financial regulatory agency,

including a member of a supervisory college as defined in Section 31A-16-108.5; or

(B) the NAIC.

(7) A written agreement governing the sharing of a document, material, or other information

described in Subsection (1) with the NAIC or a third-party consultant shall contain the following:

(a) specific procedures and protocols for maintaining the confidentiality and privileged status of

the document, material, or other information in accordance with this chapter;

(b) procedures and protocols ensuring the NAIC shares information only with a state regulator

from a state in which the insurance group has a domiciled insurer;

status of the document, material, or other information;

(d) a provision specifying that:

(i) ownership of the document, material, or other information remains with the department; and

(ii) the NAIC's or third-party consultant's use of the document, material, or other information

shared with the NAIC or third-party consultant is subject to the direction of the

commissioner;

(e) a provision prohibiting the NAIC or third-party consultant from storing the document, material,

or other information in a permanent database after the underlying analysis is complete;

(f) a provision requiring the NAIC or third-party consultant to provide prompt notice to the

commissioner and to the insurer or insurance group regarding any subpoena, request for

disclosure, or request for production of the document, material, or other information;

(g) a provision requiring the NAIC or third-party consultant consent to the insurer or insurance

group intervening in any judicial or administrative action in which the NAIC or third-party

consultant may be required to disclose the document, material, or other information; and

(h) a provision requiring the written consent of the insurer or insurance group before making

public the document, material, or other information.

(8)

(a) The commissioner shall maintain as confidential or privileged any documents, materials,

or other information received with notice or with the understanding that it is confidential or

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privileged under the laws of the jurisdiction that is the source of the document, material, or

other information.

(b) The NAIC and a third-party consultant are subject to the same confidentiality standards and

requirements as the commissioner.

(9) The sharing of a document, material, or other information described in Subsection (1) by the

commissioner in accordance with this chapter is not a delegation of regulatory authority or

rulemaking.

(10) Disclosing or sharing a document, material, or other information described in Subsection (1) in

accordance with this chapter does not waive any privilege or claim of confidentiality, propriety,

or trade secret related to the document, material, or other information.

Enacted by Chapter 193, 2019 General Session

31A-16b-107 Third-party consultants.

(1) The commissioner may retain a third-party consultant, including an attorney, actuary,

accountant, or other expert not otherwise a part of the commissioner's staff:

(a) at the insurer's or insurance group's expense; and

(b) as is reasonably necessary to assist the commissioner in reviewing the insurer's or insurance

group's:

(i) corporate governance annual disclosure and related information; or

(ii) compliance with this chapter.

(2) A person the commissioner retains under Subsection (1):

(a) is under the direction and control of the commissioner; and

(b) shall act in a purely advisory capacity.

(3) As part of the retention process, a third-party consultant shall verify to the commissioner, with

notice to the insurer or insurance group, that the third-party consultant:

(a) is free of a conflict of interest; and

(b) has internal procedures in place to:

(i) monitor compliance with Subsection (3)(a); and

(ii) comply with the confidentiality standards and requirements of this chapter.

Enacted by Chapter 193, 2019 General Session

31A-16b-108 Penalties.

(1) An insurer or insurance group that, without just cause, fails to timely file a corporate

governance annual disclosure as required in this chapter shall, after notice and hearing, pay a

penalty of $10,000 for each day's delay, up to $300,000.

(2) Any penalty recovered by the commissioner under this section shall be deposited into the

General Fund.

(3) The commissioner may reduce a penalty under this section if the insurer or insurance group

demonstrates to the commissioner that the imposition of the penalty would constitute a financial

hardship to the insurer.

Enacted by Chapter 193, 2019 General Session

Chapter 17

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Determination of Financial Condition

Part 1

General Provisions

31A-17-101 Scope.

Except as otherwise provided under this code, this chapter and the rules adopted to implement

it apply to all insurers, including reinsurers, authorized to do business in this state.

Enacted by Chapter 242, 1985 General Session

31A-17-102 Standards for accounting rules.

When adopting accounting rules, the commissioner shall consider recommendations made

by the National Association of Insurance Commissioners. Accounting rules shall follow generally

accepted accounting principles, except as modified by statutory insurance accounting principles.

Enacted by Chapter 242, 1985 General Session

Part 2

Qualified Assets

31A-17-201 Qualified assets.

(1) Except as provided under Subsections (3) and (4), only the qualified assets listed in Subsection

(2) may be used in determining the financial condition of an insurer, except to the extent an

insurer has shown to the commissioner that the insurer has excess surplus, as defined in

Section 31A-1-301.

(2) For purposes of Subsection (1), "qualified assets" means:

(a) any of the following acquired or held in accordance with Sections 31A-18-105 and

31A-18-106:

(i) an investment;

(ii) a security;

(iii) property; or

(iv) a loan;

(b) the income due and accrued on an asset listed in Subsection (2)(a);

the Accounting Practices and Procedures Manual, published by the National Association of

Insurance Commissioners; and

(d) other assets authorized by the commissioner by rule.

(3)

(a) Subject to Subsection (5) and even if the assets could not otherwise be counted under this

chapter, assets acquired in the bona fide enforcement of creditors' rights may be counted for

the purposes of Subsection (1) and Sections 31A-18-105 and 31A-18-106:

(i) for five years after the acquisition of the assets if the assets are real property; and

(ii) for one year if the assets are not real property.

(b)

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(i) The commissioner may allow reasonable extensions of the periods described in Subsection

(3)(a), if disposal of the assets within the periods given is not possible without substantial

loss.

(ii) Extensions under Subsection (3)(b)(i) may not, as to any particular asset, exceed a total of

five years.

(4) Subject to Subsection (5), and even though under this chapter the assets could not otherwise

be counted, assets acquired in connection with mergers, consolidations, or bulk reinsurance,

or as a dividend or distribution of assets, may be counted for the same purposes, in the same

manner, and for the same periods as assets acquired under Subsection (3).

(5) Assets described under Subsection (3) or (4) may not be counted for the purposes of

Subsection (1), except to the extent they are counted as assets in determining insurer solvency

under the laws of the state of domicile of the creditor or acquired insurer.

Amended by Chapter 252, 2003 General Session

31A-17-202 Status of assets that are not "qualified assets."

(1)

(a) Except as provided in Subsection (1)(b), if an insurer owns assets that are not qualified

assets under Section 31A-17-201, the assets shall be disregarded in determining and

reporting the financial condition of the insurer.

(b) An insurer may invest its funds in investments that are permitted under Section 31A-18-105

but in excess of the limits under Sections 31A-18-103 and 31A-18-106 or other assets

approved by the commissioner and these assets may be recognized and reported in the

financial condition of the insurer to the extent the insurer has excess surplus, as defined

under Section 31A-1-301.

(2) Insurers bear the burden of establishing the extent to which they have excess surplus.

Amended by Chapter 131, 1999 General Session

31A-17-203 Encumbering of assets.

(1) No domestic insurer may pledge, hypothecate, or otherwise encumber its assets to secure the

debt, guaranty, or obligation of any other person. This prohibition does not apply to obligations

of the insurer under surety bonds or insurance contracts issued in the regular course of

business.

(2) No domestic insurer may pledge, hypothecate, or otherwise encumber its assets in an amount

in excess of the amount of its capital and surplus, without the prior written consent of the

commissioner.

(3) The commissioner may grant a domestic insurer an exception to Subsection (2) for a

reinsurance agreement which may cause assets of the domestic insurer to be held, deposited,

pledged, hypothecated, or otherwise encumbered in an amount in excess of capital and surplus

to secure, offset, protect, or meet reserves or liabilities of the insurer that are established,

incurred, or required under the provisions of the reinsurance agreement. The domestic insurer

shall first file with the commissioner a written request for this exception, accompanied by a copy

of the proposed reinsurance agreement and specifically stating its purpose and the reasons the

exception should be granted.

(4) Any person that accepts a pledge, hypothecation, or encumbrance of any asset of an insurer

not in accordance with the terms and limitations of this section is considered to have accepted

that asset subject to a superior, preferential, and perfected lien in favor of owners, beneficiaries,

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assignees, certificate holders, or third party claimants or beneficiaries of any insurance benefit

or right arising out of and within the coverage of any insurance policy issued by the insurer.

The commissioner may bring or participate in an action in any court of competent jurisdiction to

protect the interests of insureds or claimants under this section.

Enacted by Chapter 204, 1986 General Session

Part 4

Valuation and Reserves

31A-17-401 Valuation of assets.

(1) The commissioner shall value the assets of insurers in accordance with then current insurance

business practices, but not in a manner inconsistent with the provisions of this title. In valuing

assets, the commissioner shall consider any method then current, formulated, or approved by

the National Association of Insurance Commissioners.

(2) Assets that are not qualified assets under Subsection 31A-17-201(2) are considered to have no

value in evaluating an insurer's compliance with Chapter 17, Part 6, Risk-Based Capital. Those

assets may be used in evaluating the insurer's financial condition only to the extent the insurer

has excess surplus.

(3)

(a) Insurance subsidiaries are valued on the books of a parent insurer as follows:

(i) Except as provided under Subsections (3)(a)(iii) and (iv), common stock of the subsidiary

is valued on the basis of the parent insurer's percentage of ownership of the common

stock multiplied by the total of the subsidiary's capital and surplus, less amounts needed to

liquidate all claims to the capital and surplus which are senior to common stock. Subsection

31A-18-106(1)(k) provides applicable limitations on investments in subsidiaries.

(ii) The value of securities other than common stock issued by a subsidiary is the lesser of the

present value of the future income to be derived under the securities or the amount the

parent insurer would receive as a result of the securities if the subsidiary were liquidated

and all creditors of the subsidiary and holders of the subsidiary's securities with senior

priority were paid in full. The present value of future income derived from securities is

determined by rule adopted by the commissioner. A parent insurer may attribute value to a

security of its subsidiary only if the parent insurer is being paid dividends or interest on the

security, and only if the parent insurer can reasonably anticipate that dividends or interest

will continue to be paid on the security.

(iii) Except as provided under Subsection (3)(a)(iv), any portion of the subsidiary's value

permitted under Subsection (3)(a) that is represented by assets other than assets listed

under Section 31A-17-201, may only be classified as excess surplus of the parent insurer,

and then only to the extent the parent insurer has established that it has excess surplus

under Section 31A-17-202.

(iv) For the purposes of Subsection (3)(a)(iii), assets of a newly acquired subsidiary that are

the equivalent of qualified assets in the subsidiary's domiciliary state, are, for the first five

years after the subsidiary's acquisition, considered to be qualified assets under Section

31A-17-201. This assumption stands even if the assets are not otherwise qualified assets

under Section 31A-17-201.

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(b) A subsidiary formed or acquired to hold or manage investments that the parent insurance

company might hold or manage directly, shall be valued as if the assets of the subsidiary

were owned directly by the insurer in a percentage equal to the insurer's percentage

of ownership of the subsidiary. The subsidiary investment limitation of Subsection

31A-18-106(1)(k) does not apply to these subsidiaries.

accordance with Subsection (1). The subsidiary investment limitation under Subsection

31A-18-106(1)(k) applies to these subsidiaries in the same manner as to subsidiaries

described in Subsection (3)(a).

(d) In determining an insurer's financial condition, no value is given to:

(i) any interest held by the insurer in its own stock, including debts due the insurer that are

secured by the insurer's own stock; or

(ii) any proportionate interest in the insurer's own stock, including debts that are secured by the

insurer's own stock, which is held by any corporation, partnership, business unit, firm, or

person owned in whole or in part by the insurer.

(4) The commissioner shall adopt rules to implement the provisions of this section.

Amended by Chapter 116, 2001 General Session

31A-17-402 Valuation of liabilities.

(1) Subject to this section, the commissioner shall make rules:

(a) specifying the liabilities required to be reported by an insurer in a financial statement

submitted under Section 31A-2-202; and

(b) the methods of valuing the liabilities described in Subsection (1)(a).

(2) For life insurance, the methods of valuing specified pursuant to Subsection (1)(b) shall be

consistent with Part 5, Standard Valuation Law.

(3) Title insurance reserves are provided for under Section 31A-17-408.

(4) In determining the financial condition of an insurer, liabilities include:

(a) the estimated amount necessary to pay:

(i) all the insurer's unpaid losses and claims incurred on or before the date of statement,

whether reported or unreported; and

(ii) the expense of adjustment or settlement of a loss or claim described in this Subsection (4)

(a);

(b) for life, accident and health insurance, and annuity contracts:

(i) the reserves on life insurance policies and annuity contracts in force, valued according to

appropriate tables of mortality and the applicable rates of interest;

(ii) the reserves for accident and health benefits, for both active and disabled lives;

(iii) the reserves for accidental death benefits; and

(iv) any additional reserves:

(A) that may be required by the commissioner by rule; or

(B) if no rule is applicable under Subsection (4)(b)(iv)(A), in a manner consistent with the

practice formulated or approved by the National Association of Insurance Commissioners

with respect to those types of insurance;

insurance, the amount of reserves equal to the unearned portions of the gross premiums

charged on policies in force, computed:

(i) on a daily or monthly pro rata basis; or

(ii) other basis approved by the commissioner;

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(d) for ocean marine and other transportation insurance, reserves:

(i) equal to 50% of the amount of premiums upon risks covering not more than one trip or

passage not terminated; and

(ii) computed:

(A) upon a pro rata basis; or

(B) with the commissioner's consent, in accordance with a method provided under Subsection

(4)(c); and

(e) the insurer's other liabilities due or accrued at the date of statement including:

(i) taxes;

(ii) expenses; and

(iii) other obligations.

(5)

(a) Except to the extent provided in Subsection (5)(b), in determining the financial condition of

an insurer of workers' compensation insurance, the insurer's liabilities do not include any

liability based on the liability of the Employer's Reinsurance Fund under Section 34A-2-702

for industrial accidents or occupational diseases occurring on or before June 30, 1994.

(b) Notwithstanding Subsection (5)(a), the liability of an insurer of workers' compensation

insurance includes any premium assessment:

(i) imposed under Section 59-9-101; and

(ii) due at the date of statement.

(6) After adopting a method for computing the reserves described in Subsection (4)(c), an insurer

may not change the method without the commissioner's written consent.

Amended by Chapter 306, 2007 General Session

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.

(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;

to the assuming reinsurer in fact and not merely in form; and

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(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;

(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.

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:

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(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

(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

(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

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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.

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;

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;

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

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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;

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.

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

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(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;

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

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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.

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.

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(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

(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

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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;

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

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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)

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(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;

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

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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

(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

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.

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

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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.

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.

(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.

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(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, may

be allowed credit if:

(a) the reinsurance is ceded to an assuming domestic captive insurer; and

(b) the assuming domestic captive insurer complies with:

(i) Sections 31A-2-202 through 31A-2-205;

(ii) Chapter 4, Insurers in General;

(iii) Chapter 16, Insurance Holding Companies;

(iv) Chapter 16a, Risk Management and Own Risk and Solvency Assessment Act;

(v) Chapter 17, Determination of Financial Condition;

(vi) Chapter 18, Investments; and

(vii) any other requirement that, in the commissioner's discretion, is necessary to promote the

captive insurer's solvency.

Amended by Chapter 194, 2023 General Session

31A-17-404.1 Asset or reduction from liability for reinsurance ceded by a domestic insurer

to other assuming insurers.

(1)

(a) An asset or a reduction from liability for reinsurance ceded by a domestic insurer to an

assuming insurer that does not meet the requirements of Section 31A-17-404 is allowed in an

amount not exceeding the liabilities carried by the ceding insurer.

(b) A reduction described in Subsection (1)(a) shall be in the amount of funds held by or on

behalf of the ceding insurer, including funds held in trust for the ceding insurer:

(i) that are held:

(A) under a reinsurance contract with the assuming insurer; and

(B) as security for the payment of obligations under the reinsurance contract; and

(ii) if the security is held:

(A) in the United States subject to withdrawal solely by, and under the exclusive control of, the

ceding insurer; or

(B) in the case of a trust, in a qualified United States financial institution.

(2) Security described in Subsection (1) may be in the form of:

(a) cash;

(b) a security:

(i) listed by the Securities Valuation Office of the National Association of Insurance

Commissioners, including those considered exempt from filing as defined by the Purposes

and Procedures Manual of the Securities Valuation Office; and

(ii) qualifying as an admitted asset;

confirmed by a qualified United States financial institution:

(i) effective no later than December 31 of the year for which the filing is being made; and

(ii) in the possession of, or in trust for, the ceding insurer on or before the filing date of its

annual statement; or

(d) another form of security acceptable to the commissioner.

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(3) Notwithstanding an issuing or confirming institution's subsequent failure to meet an applicable

standard of acceptability, a letter of credit described in Subsection (2) that meets the applicable

standards of issuer acceptability as of the day on which it is issued or confirmed shall continue

to be acceptable as security until the sooner of the day on which the letter of credit expires, is

extended, is renewed, is modified, or is amended.

Amended by Chapter 138, 2016 General Session

31A-17-404.3 Rules.

(1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and this chapter,

the commissioner may make rules prescribing:

(a) the form of a letter of credit required under this chapter;

(b) the requirements for a trust or trust instrument required by this chapter;

(d) minimum capital and surplus requirements;

(e) additional requirements relating to calculation of credit allowed a domestic ceding insurer

against reserves for reinsurance under Section 31A-17-404; and

(f) additional requirements relating to calculation of asset reduction from liability for reinsurance

ceded by a domestic insurer to other ceding insurers under Section 31A-17-404.1.

(2) A rule made pursuant to Subsection (1)(e) or (f) may apply to reinsurance relating to:

(a) a life insurance policy with guaranteed nonlevel gross premiums or guaranteed nonlevel

benefits;

(b) a universal life insurance policy with provisions resulting in the ability of a policyholder to keep

a policy in force over a secondary guarantee period;

(d) a long-term care insurance policy; or

(e) such other life and health insurance or annuity product as to which the National Association

of Insurance Commissioners adopts model regulatory requirements with respect for credit for

reinsurance.

(3) A rule adopted pursuant to Subsection (1)(e) or (f) may apply to a treaty containing:

(a) a policy issued on or after January 1, 2015; and

(b) a policy issued before January 1, 2015, if risk pertaining to the policy is ceded in connection

with the treaty, either in whole or in part, on or after January 1, 2015.

(4) A rule adopted pursuant to Subsection (1)(e) or (f) may require the ceding insurer, in calculating

the amounts or forms of security required to be held under rules made under this section, to

use the Valuation Manual adopted by the National Association of Insurance Commissioners

under Section 11B(1) of the National Association of Insurance Commissioners Standard

Valuation Law, including all amendments adopted by the National Association of Insurance

Commissioners and in effect on the date as of which the calculation is made, to the extent

applicable.

(5) A rule adopted pursuant to Subsection (1)(e) or (f) may not apply to cessions to an assuming

insurer that:

(a) meets the conditions established in Subsection 31A-17-404(8);

(b) is certified in this state; or

the National Association of Insurance Commissioners Accounting Practices and Procedures

Manual, including all amendments thereto adopted by the National Association of Insurance

Commissioners, excluding the impact of any permitted or prescribed practices and is:

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(i) licensed in at least 26 states; or

(ii) licensed in at least 10 states, and licensed or accredited in a total of at least 35 states.

(6) The authority to adopt rules pursuant to Subsection (1)(e) or (f) does not otherwise limit the

commissioner's general authority to make rules pursuant to Subsection (1).

Amended by Chapter 32, 2020 General Session

31A-17-404.4 Transition -- Application to reinsurance agreement.

The amendments to this part made in Laws of Utah 2008, Chapter 257, apply to a cession

made on or after July 1, 2008 under a reinsurance contract that has an inception, anniversary, or

renewal date no sooner than January 1, 2009.

Enacted by Chapter 257, 2008 General Session

31A-17-405 Fraternal rates and reserves.

(1) A fraternal may be organized for the transaction of business on a plan set forth in the contract

which provides for sufficient contributions by each member each year to pay the member's

share of the actual death claims of the year, through advance payments graded according

to a mortality table approved by the commissioner, without any reserve, or with a reserve

which may accumulate from overpayments of individual members. If this type of reserve does

accumulate, each member shall be informed each year of the member's credit and of the cost

of the member's insurance.

(2) Each fraternal shall collect regular premiums for each coverage it provides at adequate rates

that are approved by the commissioner or conform to standards set by rules adopted by the

commissioner.

(3) The reserves of a fraternal are subject to the same requirements as those of Chapter 5,

Domestic Stock and Mutual Insurance Corporations, insurers writing the same coverages,

except that the commissioner may authorize the use of suitable fraternal mortality tables or

other appropriate tables instead of the tables used by Chapter 5, Domestic Stock and Mutual

Insurance Corporations, insurers.

Enacted by Chapter 242, 1985 General Session

31A-17-406 Adjustment of reserves.

The commissioner may order an insurer to adjust its reserves so the reserves bear a

reasonable actuarial relationship to the insurer's obligations.

Enacted by Chapter 242, 1985 General Session

31A-17-407 Accounting for repurchased shares.

When a corporation acquires its own shares under Section 31A-5-306 or in any other way, the

acquired shares are accounted as a deduction from capital and not as assets.

Enacted by Chapter 242, 1985 General Session

31A-17-408 Title insurance reserves.

(1) In addition to an adequate reserve for outstanding losses, a title insurance company shall

either:

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(a) maintain and segregate an unearned premium reserve fund of not less than 10 cents for

each $1,000 face amount of retained liability under each title insurance contract or policy on a

single insurance risk issued; or

(b) have the commissioner review and approve a contract of reinsurance applicable to the title

insurance company's policies, which contract adequately covers the exposure or risk which

the unearned premium reserve would serve.

(2) The fund shall be maintained for the protection of policyholders and is not subject to the claims

of stockholders or creditors other than policyholders.

(3) The title insurance company may release the fund in accordance with the standards of the

NAIC Accounting Practices and Procedures Manual.

Amended by Chapter 198, 2022 General Session

Part 5

Standard Valuation Law

31A-17-501 Standard Valuation Law -- Definitions.

(1) This part is known as the "Standard Valuation Law."

(2) As used in this part, the following definitions apply on or after the operative date of the valuation

manual:

(a) Notwithstanding Section 31A-1-301, "accident and health insurance" means a contract that

incorporates morbidity risk and provides protection against economic loss resulting from

accident, sickness, or medical conditions and as may be specified in the valuation manual.

(b) "Appointed actuary" means a qualified actuary who is appointed in accordance with the

valuation manual to prepare the actuarial opinion required in Subsection 31A-17-503(2).

(i) has written, issued, or reinsured a life insurance contract, accident and health insurance

contract, or deposit-type contract in this state and has at least one such policy in force or on

claim; or

(ii) has written, issued, or reinsured a life insurance contract, accident and health insurance

contract, or deposit-type contract in any state and is required to hold a certificate of authority

to write life insurance, accident and health insurance, or deposit-type contracts in this state.

(d) "Deposit-type contract" means a contract that does not incorporate mortality or morbidity risks

and as may be specified in the valuation manual.

(e) Notwithstanding Section 31A-1-301, "life insurance" means a contract that incorporates

mortality risk, including annuity and pure endowment contracts, and as may be specified in

the valuation manual.

(f) "Policyholder behavior" means an action that a policyholder, contract holder, or any other

person with the right to elect options, such as a certificate holder, may take under a policy or

contract subject to this part, including lapse, withdrawal, transfer, deposit, premium payment,

loan, annuitization, or benefit elections prescribed by the policy or contract, but excluding

events of mortality or morbidity that result in benefits prescribed in their essential aspects by

the terms of the policy or contract.

(g) "Principle-based valuation" means a reserve valuation that uses one or more methods or

one or more assumptions determined by the insurer and is required to comply with Section

31A-17-515 as specified in the valuation manual.

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(h) "Qualified actuary" means an individual who is qualified to sign the applicable statement

of actuarial opinion in accordance with the American Academy of Actuaries qualification

standards for actuaries signing the statements and who meets the requirements specified in

the valuation manual.

(i) "Tail risk" means a risk that occurs either when the frequency of low probability events is

higher than expected under a normal probability distribution or when there are observed

events of very significant size or magnitude.

(j) "Valuation manual" means the manual of valuation instructions adopted in accordance with

Section 31A-17-514.

Amended by Chapter 163, 2016 General Session

31A-17-502 Reserve valuation.

(1) The following apply to a policy or contract issued before the operative date of the valuation

manual:

(a) The commissioner shall annually value, or cause to be valued, the reserve liabilities,

also called "reserves" in this part, for outstanding life insurance policies and annuity and

pure endowment contracts, of every life insurance company doing business in this state,

issued before the operative date of the valuation manual. In calculating the reserves, the

commissioner may use group methods and approximate averages for fractions of a year or

otherwise. In lieu of the valuation of the reserves required in this part of any foreign or alien

company, the commissioner may accept any valuation made, or caused to be made, by the

insurance supervisory official of any state or other jurisdiction when such valuation complies

with the minimum standard provided in this part.

(b)

(i) Sections 31A-17-504, 31A-17-505, 31A-17-506, 31A-17-507, 31A-17-508, 31A-17-509,

31A-17-510, 31A-17-511, 31A-17-512, and 31A-17-513 apply to a policy or contract, as

appropriate, subject to this part issued before the operative date of the valuation manual.

(ii) Sections 31A-17-514 and 31A-17-515 do not apply to a policy or contract described in

Subsection (1)(b)(i).

(2) The following apply to a policy or contract issued on or after the operative date of the valuation

manual:

(a) The commissioner shall annually value, or cause to be valued, the reserve liabilities, also

called "reserves" in this part, for an outstanding life insurance contract, annuity and pure

endowment contract, accident and health contract, and deposit-type contract of every

company issued on or after the operative date of the valuation manual. In lieu of the valuation

of the reserve liabilities required of a foreign or alien company, the commissioner may accept

a valuation made, or caused to be made, by the insurance supervisory official of any state

or other jurisdiction when the valuation complies with the minimum standard provided in this

part.

(b) Sections 31A-17-514 and 31A-17-515 apply to a policy or contract issued on or after the

operative date of the valuation manual.

Amended by Chapter 163, 2016 General Session

31A-17-503 Actuarial opinion of reserves.

(1)

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(a) For an actuarial opinion before the operative date of the valuation manual, a life insurance

company doing business in this state shall annually submit the opinion of a qualified actuary

as to whether the reserves and related actuarial items held in support of the policies and

contracts specified by the commissioner by rule are computed appropriately, are based on

assumptions which satisfy contractual provisions, are consistent with prior reported amounts,

and comply with applicable laws of this state. The commissioner by rule shall define the

specifics of this opinion and add any other items considered to be necessary to its scope.

(b) The following apply to the actuarial analysis of reserves and assets supporting reserves:

(i) A life insurance company, except as exempted by or pursuant to rule, shall also annually

include in the opinion required by Subsection (1)(a), an opinion of the same qualified

actuary as to whether the reserves and related actuarial items held in support of the policies

and contracts specified by the commissioner by rule, when considered in light of the assets

held by the company with respect to the reserves and related actuarial items, including

the investment earnings on the assets and the considerations anticipated to be received

and retained under the policies and contracts, make adequate provision for the company's

obligations under the policies and contracts, including the benefits under the expenses

associated with the policies and contracts.

(ii) The commissioner may provide by rule for a transition period for establishing any higher

reserves which the qualified actuary may consider necessary in order to render the opinion

required by this section.

(i) A memorandum, in form and substance acceptable to the commissioner as specified by rule,

shall be prepared to support each actuarial opinion.

(ii) If the insurance company fails to provide a supporting memorandum at the request of the

commissioner within a period specified by rule or the commissioner determines that the

supporting memorandum provided by the insurance company fails to meet the standards

prescribed by the rule or is otherwise unacceptable to the commissioner, the commissioner

may engage a qualified actuary at the expense of the company to review the opinion and

the basis for the opinion and prepare such supporting memorandum as is required by the

commissioner.

(d) An opinion subject to this Subsection (1) shall be governed by the following provisions:

(i) The opinion shall be submitted with the annual statement reflecting the valuation of the

reserve liabilities for each year ending on or after December 31, 1993.

(ii) The opinion shall apply to the business in force including individual and group health

insurance plans, in form and substance acceptable to the commissioner as specified by

rule.

(iii) The opinion shall be based on standards adopted from time to time by the Actuarial

Standards Board and on such additional standards as the commissioner may by rule

prescribe.

(iv) In the case of an opinion required to be submitted by a foreign or alien company, the

commissioner may accept the opinion filed by that company with the insurance supervisory

official of another state if the commissioner determines that the opinion reasonably meets

the requirements applicable to a company domiciled in this state.

(v) For the purposes of this section, "qualified actuary" means a member in good standing of

the American Academy of Actuaries who meets the requirements set forth by department

rule.

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(vi) Except in cases of fraud or willful misconduct, the qualified actuary is not liable for damages

to any person, other than the insurance company and the commissioner, for any act, error,

omission, decision, or conduct with respect to the actuary's opinion.

(vii) Disciplinary action by the commissioner against the company or the qualified actuary shall

be defined in rules by the commissioner consistent with Section 31A-2-308 and Title 63G,

Chapter 4, Administrative Procedures Act.

(viii)

(A) Any memorandum in support of the opinion, and any other material provided by the

company to the commissioner in connection with the opinion, are considered protected

records under Section 63G-2-305 and may not be made public and are not subject to

subpoena under Subsection 63G-2-202(7), other than for the purpose of defending an

action seeking damages from any person by reason of any action required by this section

or rules made under this section.

(B) However, the memorandum or other material may otherwise be released by the

commissioner with the written consent of the company, or to the American Academy

of Actuaries upon request stating that the memorandum or other material is required

for the purpose of professional disciplinary proceedings and setting forth procedures

satisfactory to the commissioner for preserving the confidentiality of the memorandum or

other material.

before any governmental agency other than the department or is released to the news

media, all portions of the memorandum are no longer confidential.

(2) The following apply to an actuarial opinion of reserves after the operative date of the valuation

manual:

(a) A company with an outstanding life insurance contract, accident and health insurance

contract, or deposit-type contract in this state and subject to rule made by the commissioner

shall annually submit the opinion of the appointed actuary as to whether the reserves

and related actuarial items held in support of the policies and contracts are computed

appropriately, are based on assumptions that satisfy contractual provisions, are consistent

with prior reported amounts, and comply with applicable laws of this state. The valuation

manual will prescribe the specifics of this opinion including any items considered to be

necessary to its scope.

(b) A company with an outstanding life insurance contract, accident and health insurance

contract, or deposit-type contract in this state and subject to rule made by the commissioner,

except as exempted in the valuation manual, shall also annually include in the opinion

required by Subsection (2)(a) an opinion of the same appointed actuary as to whether the

reserves and related actuarial items held in support of the policies and contracts specified

in the valuation manual, when considered in light of the assets held by the company with

respect to the reserves and related actuarial items, including the investment earnings on

the assets and the considerations anticipated to be received and retained under the policies

and contracts, make adequate provision for the company's obligations under the policies

and contracts, including the benefits under and expenses associated with the policies and

contracts.

(i) A memorandum, in form and substance as specified in the valuation manual, and acceptable

to the commissioner, shall be prepared to support each actuarial opinion.

(ii) If the insurance company fails to provide a supporting memorandum at the request of

the commissioner within a period specified in the valuation manual or the commissioner

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determines that the supporting memorandum provided by the insurance company fails to

meet the standards prescribed by the valuation manual or is otherwise unacceptable to

the commissioner, the commissioner may engage a qualified actuary at the expense of the

company to review the opinion and the basis for the opinion and prepare the supporting

memorandum required by the commissioner.

(d) An opinion subject to this Subsection (2) shall be governed by the following provisions:

(i) The opinion shall be in form and substance as specified in the valuation manual and

acceptable to the commissioner.

(ii) The opinion shall be submitted with the annual statement reflecting the valuation of such

reserve liabilities for each year ending on or after the operative date of the valuation manual.

(iii) The opinion shall apply to the policies and contracts subject to Subsection (2)(b), plus other

actuarial liabilities as may be specified in the valuation manual.

(iv) The opinion shall be based on standards adopted from time to time by the Actuarial

Standards Board or its successor, and on such additional standards as may be prescribed

in the valuation manual.

(v) In the case of an opinion required to be submitted by a foreign or alien company, the

commissioner may accept the opinion filed by that company with the insurance supervisory

official of another state if the commissioner determines that the opinion reasonably meets

the requirements applicable to a company domiciled in this state.

(vi) Except in cases of fraud or willful misconduct, the appointed actuary may not be liable for

damages to any person, other than the insurance company and the commissioner, for any

act, error, omission, decision, or conduct with respect to the appointed actuary's opinion.

(vii) Disciplinary action by the commissioner against the company or the appointed actuary shall

be defined in rules by the commissioner consistent with Section 31A-2-308 and Title 63G,

Chapter 4, Administrative Procedures Act.

Amended by Chapter 163, 2016 General Session

31A-17-504 Computation of minimum standard.

Except as provided in Sections 31A-17-505, 31A-17-506, and 31A-17-513, the minimum

standard for the valuation of the life insurance policies and annuity and pure endowment contracts

issued before January 1, 1994, shall be that provided by the laws in effect immediately before that

date. Except as otherwise provided in Sections 31A-17-505, 31A-17-506, and 31A-17-513, the

minimum standard for the valuation of such policies and contracts issued on or after January 1,

1994, shall be the commissioner's reserve valuation methods defined in Sections 31A-17-507,

31A-17-508, 31A-17-511, and 31A-17-513, 3.5% interest, or in the case of life insurance policies

and contracts, other than annuity and pure endowment contracts, issued on or after June 1, 1973,

4% interest for such policies issued before April 2, 1980, 5.5% interest for single premium life

insurance policies, and 4.5% interest for all other such policies issued on and after April 2, 1980,

and the following tables:

(1) For an ordinary policy of life insurance issued on the standard basis, excluding any accident

and health and accidental death benefits in the policy, the Commissioner's 1941 Standard

Ordinary Mortality Table for such policies issued before the operative date of Subsection

31A-22-408(6)(a), the Commissioner's 1958 Standard Ordinary Mortality Table for such policies

issued on or after the operative date of Subsection 31A-22-408(6)(a) and before the operative

date of Subsection 31A-22-408(6)(d), provided that for any category of such policies issued

on female risks, all modified net premiums and present values referred to in this section may

be calculated according to an age not more than six years younger than the actual age of the

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insured, and for such policies issued on or after the operative date of Subsection 31A-22-408(6)

(d):

(a) the Commissioner's 1980 Standard Ordinary Mortality Table;

(b) at the election of the company for any one or more specified plans of life insurance, the

Commissioner's 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality

Factors; or

Commissioners, that is approved by rule made by the commissioner for use in determining

the minimum standard of valuation for such policies.

(2) For an industrial life insurance policy issued on the standard basis, excluding any accident and

health and accidental death benefits in the policy, the 1941 Standard Industrial Mortality Table

for the policy issued before the operative date of Subsection 31A-22-408(6)(c), and for such

policies issued on or after such operative date, the Commissioner's 1961 Standard Industrial

Mortality Table or any industrial mortality table, adopted after 1980 by the National Association

of Insurance Commissioners, that is approved by rule made by the commissioner for use in

determining the minimum standard of valuation for such policies.

(3) For individual annuity and pure endowment contracts, excluding any disability and accidental

death benefits in such policies:

(a) the 1937 Standard Annuity Mortality Table;

(b) at the option of the company, the Annuity Mortality Table for 1949, Ultimate; or

(4) For group annuity and pure endowment contracts, excluding any accident and health and

accidental death benefits in such policies:

(a) the Group Annuity Mortality Table for 1951, any modification of such table approved by the

commissioner; or

(b) at the option of the company, any of the tables or modifications of tables specified for

individual annuity and pure endowment contracts.

(5) For total and permanent disability benefits in or supplementary to ordinary policies or contracts:

(a)

(i) for a policy or contract issued on or after January 1, 1966, the tables of Period 2 disablement

rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society

of Actuaries, with due regard to the type of benefit or any tables of disablement rates

and termination rates adopted after 1980 by the National Association of Insurance

Commissioners, that are approved by rule made by the commissioner for use in determining

the minimum standard of valuation for the policy;

(ii) for a policy or contract issued on or after January 1, 1961, and before January 1, 1966,

either such tables or, at the option of the company, the Class (3) Disability Table (1926);

and

(iii) for a policy issued before January 1, 1961, the Class (3) Disability Table (1926).

(b) A table described in this Subsection (5) shall, for active lives, be combined with a mortality

table permitted for calculating the reserves for life insurance policies.

(6) For accidental death benefits in or supplementary to policies issued on or after January 1,

1966, the 1959 Accidental Death Benefits Table or any accidental death benefits table adopted

after 1980 by the National Association of Insurance Commissioners, that is approved by rule

made by the commissioner for use in determining the minimum standard of valuation for such

policies, for policies issued on or after January 1, 1961, and before January 1, 1966, either

such table or, at the option of the company, the Inter-Company Double Indemnity Mortality

Table, and for policies issued before January 1, 1961, the Inter-Company Double Indemnity

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Mortality Table. Either table shall be combined with a mortality table for calculating the reserves

for life insurance policies.

(7) For group life insurance, life insurance issued on the substandard basis and other special

benefits: such tables as may be approved by the commissioner.

Amended by Chapter 163, 2016 General Session

31A-17-505 Computation of minimum standard for annuities.

(1) Except as provided in Section 31A-17-506, the minimum standard of valuation for individual

annuity and pure endowment contracts issued on or after the operative date of this section,

as defined in Subsection (2), and for annuities and pure endowments purchased on or

after such operative date under group annuity and pure endowment contracts, shall be the

commissioner's reserve valuation methods defined in Sections 31A-17-507 and 31A-17-508

and the following tables and interest rates:

(a) for individual annuity and pure endowment contracts issued before April 2, 1980, excluding

any accident and health and accidental death benefits in the contracts:

(i)

(A) the 1971 Individual Annuity Mortality Table; or

(B) any modification of the 1971 Individual Annuity Mortality Table approved by the

commissioner;

(ii) 6% interest for single premium immediate annuity contracts; and

(iii) 4% interest for all other individual annuity and pure endowment contracts;

(b) for individual single premium immediate annuity contracts issued on or after April 2, 1980,

excluding any accident and health and accidental death benefits in the contracts:

(i)

(A) any individual annuity mortality table that is approved by rule made by the commissioner

for use in determining the minimum standard of valuation for such contracts; or

(B) any modification of a table described in Subsection (1)(b)(i)(A) approved by the

commissioner; and

(ii) 7.5% interest;

than single premium immediate annuity contracts, excluding any accident and health and

accidental death benefits in the contracts:

(i)

(A) any individual annuity mortality table that is approved by rule made by the commissioner

for use in determining the minimum standard of valuation for such contracts; or

(B) any modification of a table described in Subsection (1)(c)(i)(A) approved by the

commissioner;

(ii) 5.5% interest for single premium deferred annuity and pure endowment contracts; and

(iii) 4.5% interest for all other such individual annuity and pure endowment contracts;

(d) for the annuities and pure endowments purchased before April 2, 1980, under group annuity

and pure endowment contracts, excluding any accident and health and accidental death

benefits purchased under the contracts:

(i)

(A) the 1971 Group Annuity Mortality Table; or

(B) any modification of the 1971 Group Annuity Mortality Table approved by the

commissioner; and

(ii) 6.5% interest; and

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(e) for the annuities and pure endowments purchased on or after April 2, 1980, under group

annuity and pure endowment contracts, excluding any accident and health and accidental

death benefits purchased under the contracts:

(i)

(A) any group annuity mortality table that is approved by rule made by the commissioner

for use in determining the minimum standard of valuation for such annuities and pure

endowments; or

(B) any modification of a table described in Subsection (1)(e)(i)(A) approved by the

commissioner; and

(ii) 7.5% interest.

(2)

(a) After June 1, 1973, any company may file with the commissioner a written notice of its

election to comply with this section after a specified date before January 1, 1979, which shall

be the operative date of this section for the company.

(b) If a company does not make an election under Subsection (2)(a), the operative date of this

section for the company shall be January 1, 1979.

Amended by Chapter 163, 2016 General Session

31A-17-506 Computation of minimum standard by calendar year of issue.

(1) The interest rates used in determining the minimum standard for the valuation shall be the

calendar year statutory valuation interest rates as defined in this section for:

(a) life insurance policies issued in a particular calendar year, on or after the operative date of

Subsection 31A-22-408(6)(d);

(b) individual annuity and pure endowment contracts issued in a particular calendar year on or

after January 1, 1982;

1982, under group annuity and pure endowment contracts; and

(d) the net increase, if any, in a particular calendar year after January 1, 1982, in amounts held

under guaranteed interest contracts.

(2) Calendar year statutory valuation interest rates:

(a) The calendar year statutory valuation interest rates, "I," shall be determined as follows and

the results rounded to the nearer 1/4 of 1%:

(i) for life insurance:

I = .03 + W(R1 - .03) + (W/2)(R2 - .09);

(ii) for single premium immediate annuities and for annuity benefits involving life contingencies

arising from other annuities with cash settlement options and from guaranteed interest

contracts with cash settlement options:

I = .03 + W(R - .03),

where R1 is the lesser of R and .09,

R2 is the greater of R and .09,

R is the reference interest rate defined in Subsection (4), and

W is the weighting factor defined in this section;

(iii) for other annuities with cash settlement options and guaranteed interest contracts with

cash settlement options, valued on an issue year basis, except as stated in Subsection (2)

(a)(ii), the formula for life insurance stated in Subsection (2)(a)(i) shall apply to annuities

and guaranteed interest contracts with guarantee durations in excess of 10 years, and the

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formula for single premium immediate annuities stated in Subsection (2)(a)(ii) shall apply to

annuities and guaranteed interest contracts with guarantee duration of 10 years or less;

(iv) for other annuities with no cash settlement options and for guaranteed interest contracts

with no cash settlement options, the formula for single premium immediate annuities stated

in Subsection (2)(a)(ii) shall apply; and

(v) for other annuities with cash settlement options and guaranteed interest contracts with

cash settlement options, valued on a change in fund basis, the formula for single premium

immediate annuities stated in Subsection (2)(a)(ii) shall apply.

(b) However, if the calendar year statutory valuation interest rate for any life insurance policies

issued in any calendar year determined without reference to this sentence differs from the

corresponding actual rate for similar policies issued in the immediately preceding calendar

year by less than one-half of 1% the calendar year statutory valuation interest rate for such

life insurance policies shall be equal to the corresponding actual rate for the immediately

preceding calendar year. For purposes of applying the immediately preceding sentence, the

calendar year statutory valuation interest rate for life insurance policies issued in a calendar

year shall be determined for 1980, using the reference interest rate defined in 1979, and

shall be determined for each subsequent calendar year regardless of when Subsection

31A-22-408(6)(d) becomes operative.

(3) Weighting factors:

(a) The weighting factors referred to in the formulas stated in Subsection (2) are given in the

following tables:

(i)

(A) Weighting factors for life insurance:

Guarantee Duration (Years) Weighting Factors

10 or less: .50

More than 10, but less than 20: .45

More than 20: .35.

(B) For life insurance, the guarantee duration is the maximum number of years the life

insurance can remain in force on a basis guaranteed in the policy or under options to

convert to plans of life insurance with premium rates or nonforfeiture values or both which

are guaranteed in the original policy;

(ii) Weighting factor for single premium immediate annuities and for annuity benefits involving

life contingencies arising from other annuities with cash settlement options and guaranteed

interest contracts with cash settlement options: .80

(iii) Weighting factors for other annuities and for guaranteed interest contracts, except as stated

in Subsection (3)(a)(ii), shall be as specified in the tables in Subsections (3)(a)(iii)(A), (B),

and (C), according to the rules and definitions in Subsection (3)(b):

(A) For annuities and guaranteed interest contracts valued on an issue year basis:

Guarantee Duration (Years) Weighting Factors for Plan Type

A B C

5 or less: .80 .60 .50

More than 5, but not more than 10: .75 .60 .50

More than 10, but not more than 20: .65 .50 .45

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More than 20: .45 .35 .35

Plan Type

A B C

(B) For annuities and guaranteed interest

contracts valued on a change in fund basis, the

factors shown in Subsection (3)(a)(iii)(A)

increased by: .15 .25 .05

Plan Type

A B C

contracts valued on an issue year basis, other than

those with no cash settlement options, which do

not guarantee interest on considerations received

more than one year after issue or purchase and for

annuities and guaranteed interest contracts valued

on a change in fund basis which do not guarantee

interest rates on considerations received more

than 12 months beyond the valuation date, the

factors shown in Subsection (3)(a)(iii)(A) or

derived in Subsection (3)(a)(iii)(B) increased by: .05 .05 .05.

(b)

(i) For other annuities with cash settlement options and guaranteed interest contracts with

cash settlement options, the guarantee duration is the number of years for which the

contract guarantees interest rates in excess of the calendar year statutory valuation interest

rate for life insurance policies with guarantee duration in excess of 20 years. For other

annuities with no cash settlement options and for guaranteed interest contracts with no cash

settlement options, the guaranteed duration is the number of years from the date of issue or

date of purchase to the date annuity benefits are scheduled to commence.

(ii) Plan type as used in the tables in this Subsection (3) is defined as follows:

(A) Plan Type A: At any time policyholder may withdraw funds only:

(I) with an adjustment to reflect changes in interest rates or asset values since receipt of the

funds by the insurance company;

(II) without such adjustment but in installments over five years or more;

(III) as an immediate life annuity; or

(IV) no withdrawal permitted.

(B)

(I) Plan Type B: Before expiration of the interest rate guarantee, policyholder withdraw funds

only:

(Aa) with an adjustment to reflect changes in interest rates or asset values since receipt of

the funds by the insurance company;

(Bb) without such adjustment but in installments over five years or more; or

(Cc) no withdrawal permitted.

(II) At the end of interest rate guarantee, funds may be withdrawn without such adjustment

in a single sum or installments over less than five years.

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in a single sum or installments over less than five years either:

(I) without adjustment to reflect changes in interest rates or asset values since receipt of the

funds by the insurance company; or

(II) subject only to a fixed surrender charge stipulated in the contract as a percentage of the

fund.

(iii) A company may elect to value guaranteed interest contracts with cash settlement options

and annuities with cash settlement options on either an issue year basis or on a change

in fund basis. Guaranteed interest contracts with no cash settlement options and other

annuities with no cash settlement options shall be valued on an issue year basis. As used

in this section, an issue year basis of valuation refers to a valuation basis under which the

interest rate used to determine the minimum valuation standard for the entire duration of

the annuity or guaranteed interest contract is the calendar year valuation interest rate for

the year of issue or year of purchase of the annuity or guaranteed interest contract, and the

change in fund basis of valuation refers to a valuation basis under which the interest rate

used to determine the minimum valuation standard applicable to each change in the fund

held under the annuity or guaranteed interest contract is the calendar year valuation interest

rate for the year of the change in the fund.

(4) Reference interest rate: "Reference interest rate" referred to in Subsection (2)(a) is defined as

follows:

(a) For life insurance, the lesser of the average over a period of 36 months and the average

over a period of 12 months, ending on June 30 of the calendar year next preceding the year

of issue, of the Monthly Average of the composite Yield on Seasoned Corporate Bonds, as

published by Moody's Investors Service, Inc.

(b) For single premium immediate annuities and for annuity benefits involving life contingencies

arising from other annuities with cash settlement options and guaranteed interest contracts

with cash settlement options, the average over a period of 12 months, ending on June 30 of

the calendar year of issue or year of purchase, of the Monthly Average of the Composite Yield

on Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.

settlement options, valued on a year of issue basis, except as stated in Subsection (4)(b),

with guarantee duration in excess of 10 years, the lesser of the average over a period of 36

months and the average over a period of 12 months, ending on June 30 of the calendar year

of issue or purchase, of the Monthly Average of the Composite Yield on Seasoned Corporate

Bonds, as published by Moody's Investors Service, Inc.

(d) For other annuities with cash settlement options and guaranteed interest contracts with

cash settlement options, valued on a year of issue basis, except as stated in Subsection (4)

(b), with guarantee duration of 10 years or less, the average over a period of 12 months,

ending on June 30 of the calendar year of issue or purchase, of the Monthly Average of the

Composite Yield on Seasoned Corporate Bonds, as published by Moody's Investors Service,

Inc.

(e) For other annuities with no cash settlement options and for guaranteed interest contracts with

no cash settlement options, the average over a period of 12 months, ending on June 30 of

the calendar year of issue or purchase, of the Monthly Average of the Composite Yield on

Seasoned Corporate Bonds, as published by Moody's Investors Service, Inc.

(f) For other annuities with cash settlement options and guaranteed interest contracts with cash

settlement options, valued on a change in fund basis, except as stated in Subsection (4)

(b), the average over a period of 12 months, ending on June 30 of the calendar year of the

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change in the fund, of the Monthly Average of the Composite Yield on Seasoned Corporate

Bonds, as published by Moody's Investors Service, Inc.

(5) Alternative method for determining reference interest rates: In the event that the Monthly

Average of the Composite Yield on Seasoned Corporate Bonds is no longer published by

Moody's Investors Service, Inc. or in the event that the National Association of Insurance

Commissioners determines that the Monthly Average of the Composite Yield on Seasoned

Corporate Bonds as published by Moody's Investors Service, Inc. is no longer appropriate for

the determination of the reference interest rate, then an alternative method for determination

of the reference interest rate, which is adopted by the National Association of Insurance

Commissioners and approved by rule made by the commissioner, may be substituted.

Amended by Chapter 163, 2016 General Session

31A-17-507 Reserve valuation method -- Life insurance and endowment benefits.

(1) Except as otherwise provided in Sections 31A-17-508, 31A-17-511, and 31A-17-513,

reserves according to the commissioner's reserve valuation method, for the life insurance and

endowment benefits of policies providing for a uniform amount of insurance and requiring the

payment of uniform premiums shall be the excess, if any, of the present value, at the date

of valuation, of such future guaranteed benefits provided for by such policies, over the then

present value of any future modified net premiums therefor. The modified net premiums for

any such policy shall be such uniform percentage of the respective contract premiums for

such benefits that the present value, at the date of issue of the policy, of all such modified net

premiums shall be equal to the sum of the then present value of such benefits provided for by

the policy and the excess of Subsection (1)(a) over Subsection (1)(b), as follows:

(a) A net level annual premium equal to the present value, at the date of issue, of such benefits

provided for after the first policy year, divided by the present value, at the date of issue, of

an annuity of one per annum payable on the first and each subsequent anniversary of such

policy on which a premium falls due; provided, however, that such net level annual premium

may not exceed the net level annual premium on the 19 year premium whole life plan for

insurance of the same amount at an age one year higher than the age at issue of such policy.

(b) A net one year term premium for such benefits provided for in the first policy year.

(2)

(a) Provided that for any life insurance policy issued on or after January 1, 1997, for which the

contract premium in the first policy year exceeds that of the second year and for which no

comparable additional benefit is provided in the first year for such excess and which provides

an endowment benefit or a cash surrender value or a combination thereof in an amount

greater than such excess premium, the reserve according to the commissioner's reserve

valuation method as of any policy anniversary occurring on or before the assumed ending

date defined in this Subsection (2) as the first policy anniversary on which the sum of any

endowment benefit and any cash surrender value then available is greater than such excess

premium shall, except as otherwise provided in Section 31A-17-511, be the greater of the

reserve as of such policy anniversary calculated as described in Subsection (1) and the

reserve as of such policy anniversary calculated as described in that subsection, but with:

(i) the value defined in Subsection (1)(a) being reduced by 15% of the amount of such excess

first year premium;

(ii) the present values of benefits and premiums being determined without reference to

premiums or benefits provided for by the policy after the assumed ending date;

(iii) the policy being assumed to mature on such date as an endowment; and

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(iv) the cash surrender value provided on such date being considered as an endowment

benefit.

(b) In making the comparison described in Subsection (2)(a), the mortality and interest bases

stated in Sections 31A-17-504 and 31A-17-506 shall be used.

(3) Reserves according to the commissioner's reserve valuation method for:

(a) life insurance policies providing for a varying amount of insurance or requiring the payment of

varying premiums;

(b) group annuity and pure endowment contracts purchased under a retirement plan or plan of

deferred compensation, established or maintained by an employer, including a partnership or

sole proprietorship, or by an employee organization, or by both, other than a plan providing

individual retirement accounts or individual retirement annuities under Section 408, Internal

Revenue Code;

(d) other benefits, except life insurance and endowment benefits in life insurance policies and

benefits provided by other annuity and pure endowment contracts, shall be calculated by a

method consistent with the principles of Subsections (1) and (2).

Amended by Chapter 163, 2016 General Session

31A-17-508 Reserve valuation method -- Annuity and pure endowment benefits.

(1) This section shall apply to all annuity and pure endowment contracts other than group

annuity and pure endowment contracts purchased under a retirement plan or plan of deferred

compensation, established or maintained by an employer, including a partnership or sole

proprietorship, or by an employee organization, or by both, other than a plan providing

individual retirement accounts or individual retirement annuities under Section 408, Internal

Revenue Code.

(2) Reserves according to the commissioner's annuity reserve method for benefits under annuity

or pure endowment contracts, excluding any accident and health and accidental death benefits

in such contracts, shall be the greatest of the respective excesses of the present values, at the

date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits,

provided for by such contracts at the end of each respective contract year, over the present

value, at the date of valuation, of any future valuation considerations derived from future gross

considerations, required by the terms of such contract, that become payable prior to the end of

such respective contract year. The future guaranteed benefits shall be determined by using the

mortality table, if any, and the interest rate, or rates, specified in such contracts for determining

guaranteed benefits. The valuation considerations are the portions of the respective gross

considerations applied under the terms of such contracts to determine nonforfeiture values.

Amended by Chapter 116, 2001 General Session

31A-17-509 Minimum reserves.

(1) In no event shall a company's aggregate reserves for life insurance policies, excluding accident

and health and accidental death benefits, issued on or after January 1, 1994, be less than

the aggregate reserves calculated in accordance with the methods set forth in Sections

31A-17-507, 31A-17-508, 31A-17-511, and 31A-17-512 and the mortality table or tables and

rate or rates of interest used in calculating nonforfeiture benefits for such policies.

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(2) In no event shall the aggregate reserves for policies, contracts, and benefits be less than the

aggregate reserves determined by the appointed actuary to be necessary to render the opinion

required by Section 31A-17-503.

Amended by Chapter 163, 2016 General Session

31A-17-510 Optional reserve calculation.

(1) Reserves for policies and contracts issued before January 1, 1994, may be calculated, at the

option of the company, according to any standards which produce greater aggregate reserves

for such policies and contracts than the minimum reserves required by the laws in effect

immediately before that date. Reserves for any category of policies, contracts, or benefits as

established by the commissioner, issued on or after January 1, 1994, may be calculated, at the

option of the company, according to any standards which produce greater aggregate reserves

for such category than those calculated according to the minimum standard provided in this

part, but the rate or rates of interest used for policies and contracts, other than annuity and pure

endowment contracts, may not be greater than the corresponding rate or rates of interest used

in calculating any nonforfeiture benefits provided in the policy or contract.

(2) Any such company which at any time shall have adopted any standard of valuation producing

greater aggregate reserves than those calculated according to the minimum standard provided

in this part may, with the approval of the commissioner, adopt any lower standard of valuation,

but not lower than the minimum provided in this part, except that, for the purposes of this

section, the holding of additional reserves previously determined by the appointed actuary to be

necessary to render the opinion required by Section 31A-17-503 may not be considered to be

the adoption of a higher standard of valuation.

Amended by Chapter 163, 2016 General Session

31A-17-511 Reserve calculation -- Valuation net premium exceeding the gross premium

charged.

(1) If in any contract year the gross premium charged by any company on any policy or contract

is less than the valuation net premium for the policy or contract calculated by the method used

in calculating the reserve thereon but using the minimum valuation standards of mortality and

rate of interest, the minimum reserve required for such policy or contract shall be the greater

of either the reserve calculated according to the mortality table, rate of interest, and method

actually used for such policy or contract, or the reserve calculated by the method actually

used for such policy or contract but using the minimum valuation standards of mortality and

rate of interest and replacing the valuation net premium by the actual gross premium in each

contract year for which the valuation net premium exceeds the actual gross premium. The

minimum valuation standards of mortality and rate of interest referred to in this section are

those standards stated in Sections 31A-17-504 and 31A-17-506.

(2) Provided that for any life insurance policy issued on or after January 1, 1997, for which the

gross premium in the first policy year exceeds that of the second year and for which no

comparable additional benefit is provided in the first year for such excess and which provides

an endowment benefit or a cash surrender value or a combination of an endowment benefit

and cash surrender value in an amount greater than such excess premium, this section shall

be applied as if the method actually used in calculating the reserve for such policy were the

method described in Section 31A-17-507, ignoring Subsection 31A-17-507(2). The minimum

reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve

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calculated in accordance with Section 31A-17-507, including Subsection 31A-17-507(2), and

the minimum reserve calculated in accordance with this section.

Amended by Chapter 163, 2016 General Session

31A-17-512 Reserve calculation -- Indeterminate premium plans.

In the case of any plan of life insurance which provides for future premium determination,

the amounts of which are to be determined by the insurance company based on then estimates

of future experience, or in the case of any plan of life insurance or annuity which is of such a

nature that the minimum reserves cannot be determined by the methods described in Sections

31A-17-507, 31A-17-508, and 31A-17-511, the reserves which are held under any such plan shall:

(1) be appropriate in relation to the benefits and the pattern of premiums for that plan; and

(2) be computed by a method which is consistent with the principles of this part, as determined by

rules promulgated by the commissioner.

Amended by Chapter 258, 2015 General Session

31A-17-513 Minimum standards for accident and health insurance contracts.

(1) For an accident and health insurance contract issued before the operative date of the valuation

manual, the minimum standard of valuation is the standard adopted by the commissioner by

rule.

(2) For an accident and health insurance contract issued on or after the operative date of the

valuation manual, the standard prescribed in the valuation manual is the minimum standard of

valuation required under Subsection 31A-17-502(2).

Repealed and Re-enacted by Chapter 163, 2016 General Session

31A-17-514 Valuation manual for policies issued on or after the operative date of the

valuation manual.

(1) For a policy issued on or after the operative date of the valuation manual, the standard

prescribed in the valuation manual is the minimum standard of valuation required under

Subsection 31A-17-502(2), except as provided under Subsection (5) or (6).

(2) The operative date of the valuation manual is January 1 of the first calendar year following the

first July 1 as of which all of the following have occurred:

(a) the valuation manual is adopted by the National Association of Insurance Commissioners by

an affirmative vote of at least 42 members, or three-fourths of the members voting, whichever

is greater;

(b) the Standard Valuation Law, as amended by the National Association of Insurance

Commissioners in 2009, or legislation including substantially similar terms and provisions,

has been enacted by states representing greater than 75% of the direct premiums written as

reported in the following annual statements submitted for 2008:

(i) life;

(ii) accident and health annual statements;

(iii) health annual statements; or

(iv) fraternal annual statements; and

Commissioners in 2009, or legislation including substantially similar terms and provisions, has

been enacted by at least 42 of the following 55 jurisdictions:

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(i) the 50 states of the United States;

(ii) American Samoa;

(iii) the American Virgin Islands;

(iv) the District of Columbia;

(v) Guam; and

(vi) Puerto Rico.

(3) Unless a change in the valuation manual specifies a later effective date, changes to the

valuation manual shall be effective on January 1 following the date when the change to the

valuation manual has been adopted by the National Association of Insurance Commissioners

by an affirmative vote representing:

(a) at least three-fourths of the members of the National Association of Insurance Commissioners

voting, but not less than a majority of the total membership; and

(b) members of the National Association of Insurance Commissioners representing jurisdictions

totaling greater than 75% of the direct premiums written as reported in the following annual

statements most recently available before the vote in Subsection (3)(a):

(i) life;

(ii) accident and health annual statements;

(iii) health annual statements; or

(iv) fraternal annual statements.

(4) The valuation manual shall specify all of the following:

(a) minimum valuation standards for and definitions of a policy or contract subject to Subsection

31A-17-502(2), except such minimum valuation standards shall be:

(i) the commissioner's reserve valuation method for life insurance contracts, other than annuity

contracts, subject to Subsection 31A-17-502(2);

(ii) the commissioner's annuity reserve valuation method for annuity contracts subject to

Subsection 31A-17-502(2); and

(iii) minimum reserves for other policies or contracts subject to Subsection 31A-17-502(2);

(b) which policies or contracts or types of policies or contracts are subject to the requirements

of a principle-based valuation in Subsection 31A-17-515(1) and the minimum valuation

standards consistent with those requirements;

(i) requirements for the format of reports to the commissioner under Subsection 31A-17-515(2)

(c), which shall include information necessary to determine if the valuation is appropriate in

compliance with this part;

(ii) prescribed assumptions for risks over which the company does not have significant control;

and

(iii) procedures for corporate governance and oversight of the actuarial function, and a process

for appropriate waiver or modification of such procedures;

(d) for policies not subject to a principle-based valuation under Section 31A-17-515 the minimum

valuation standard shall either:

(i) be consistent with the minimum standard of valuation before the operative date of the

valuation manual; or

(ii) develop reserves that quantify the benefits and guarantees, and the funding, associated with

the contracts and their risks at a level of conservatism that reflects conditions that include

unfavorable events that have a reasonable probability of occurring;

(e) other requirements, including those relating to reserve methods, models for measuring risk,

generation of economic scenarios, assumptions, margins, use of company experience, risk

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measurement, disclosure, certifications, reports, actuarial opinions and memorandums,

transition rules, and internal controls; and

(f) the data and form of the data required under Section 31A-17-516, with whom the data must

be submitted, and may specify other requirements including data analyses and reporting of

analyses.

(5) In the absence of a specific valuation requirement or if a specific valuation requirement in the

valuation manual is not, in the opinion of the commissioner, in compliance with this part, then

the company shall, with respect to the requirement, comply with minimum valuation standards

prescribed by the commissioner by rule.

(6) The commissioner may engage a qualified actuary, at the expense of the company, to

perform an actuarial examination of the company and opine on the appropriateness of any

reserve assumption or method used by the company, or to review and opine on a company's

compliance with any requirement set forth in this part. The commissioner may rely upon the

opinion, regarding provisions contained within this part, of a qualified actuary engaged by

the commissioner of another state, district, or territory of the United States. As used in this

Subsection (6), "engage" includes employment and contracting.

(7) The commissioner may require a company to change any assumption or method that in the

opinion of the commissioner is necessary in order to comply with the requirements of the

valuation manual or this part, and the company shall adjust the reserves as required by the

commissioner. The commissioner may take other disciplinary action as permitted pursuant to

Section 31A-2-308 and Title 63G, Chapter 4, Administrative Procedures Act.

Enacted by Chapter 163, 2016 General Session

31A-17-515 Requirements of a principle-based valuation.

(1) A company shall establish reserves using a principle-based valuation that meets the following

conditions for a policy or contract as specified in the valuation manual:

(a) A company shall quantify the benefits and guarantees, and the funding, associated with the

policy or contract and the policy's or contract's risks at a level of conservatism that reflects:

(i) conditions that include unfavorable events that have a reasonable probability of occurring

during the lifetime of the policies or contracts; and

(ii) for polices or contracts with significant tail risk, conditions appropriately adverse to quantify

the tail risk.

(b) The company shall incorporate assumptions, risk analysis methods, and financial models and

management techniques that are consistent with, but not necessarily identical to, those used

within the company's overall risk assessment process, while recognizing potential differences

in financial reporting structures and any prescribed assumptions or methods.

(i) the assumption is prescribed in the valuation manual; and

(ii) for assumptions that are not prescribed, the assumptions shall:

(A) be established using the company's available experience, to the extent it is relevant and

statistically credible; or

(B) to the extent that company data is not available, relevant, or statistically credible, be

established using other relevant, statistically credible experience.

(d) The company shall provide margins for uncertainty including adverse deviation and estimation

error, such that the greater the uncertainty the larger the margin and resulting reserve.

(2) A company using a principle-based valuation for one or more policies or contracts subject to

this section as specified in the valuation manual shall:

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(a) establish procedures for corporate governance and oversight of the actuarial valuation

function consistent with those described in the valuation manual;

(b) provide to the commissioner and the board of directors an annual certification of the

effectiveness of the internal controls with respect to the principle-based valuation:

(i) which controls shall be designed to assure that all material risks inherent in the liabilities

and associated assets subject to such valuation are included in the valuation, and that

valuations are made in accordance with the valuation manual; and

(ii) the certification shall be based on the controls in place as of the end of the preceding

calendar year; and

complies with standards prescribed in the valuation manual.

(3) A principle-based valuation may include a prescribed formulaic reserve component.

Enacted by Chapter 163, 2016 General Session

31A-17-516 Experience reporting for policies in force on or after the operative date of the

valuation manual.

A company shall submit mortality, morbidity, policyholder behavior, or expense experience and

other data as prescribed in the valuation manual.

Enacted by Chapter 163, 2016 General Session

31A-17-517 Confidentiality.

(1) For purposes of this section, "confidential information" means:

(a) a memorandum in support of an opinion submitted under Section 31A-17-503 and any

other document, material, and other information, including working papers, and copies of a

document, material, and other information, created, produced, or obtained by or disclosed to

the commissioner or any other person in connection with the memorandum;

(b) a document, material, and other information, including working papers, and copies of a

document, material, and other information created, produced, or obtained by or disclosed

to the commissioner or any other person in the course of an examination made under

Subsection 31A-17-514(6), except that if an examination report or other material prepared in

connection with an examination made under Sections 31A-2-203 through 31A-2-205 is not

held as private and confidential information under Sections 31A-2-203 through 31A-2-205, an

examination report or other material prepared in connection with an examination made under

Subsection 31A-17-514(6) may not be confidential information to the same extent as if the

examination report or other material had been prepared under Sections 31A-2-203 through

31A-2-205;

in connection with, an annual certification by the company under Subsection 31A-17-515(2)

(b) evaluating the effectiveness of the company's internal controls with respect to a principle-

based valuation and any other document, material, and other information, including working

papers, and copies of the document, material, and other information, created, produced, or

obtained by or disclosed to the commissioner or any other person in connection with such

reports, documents, materials, and other information;

(d) any principle-based valuation report developed under Subsection 31A-17-515(2)(c) and any

other document, material, and other information, including working papers, and copies of the

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document, material, and other information, created, produced, or obtained by or disclosed to

the commissioner or any other person in connection with such report; and

(e) any document, material, data, and other information submitted by a company under Section

31A-17-516, collectively, "experience data," and any other document, material, data, or

other information, including working papers, and copies of the document, material, data,

and information created or produced in connection with such experience data, in each case

that include any potentially company-identifying or personally identifiable information, that

is provided to or obtained by the commissioner, together with any "experience data," the

"experience materials," and any other document, material, data, and other information,

including working papers, and copies of the document, material, data, and other information

created, produced, or obtained by or disclosed to the commissioner or any other person in

connection with such experience materials.

(2)

(a) Except as provided in this section, a company's confidential information is confidential,

not public records, not open to public inspection, and not subject to Title 63G, Chapter 2,

Government Records Access and Management Act.

(b) The commissioner is authorized to use the confidential information in the furtherance of any

regulatory or legal action brought against the company as a part of the commissioner's official

duties.

share confidential information:

(i) with other state, federal, and international regulatory agencies and with the National

Association of Insurance Commissioners and its affiliates and subsidiaries;

(ii) in the case of confidential information specified in Subsections (1)(a) and (1)(d) only, with

the Actuarial Board for Counseling and Discipline or its successor, upon request, stating

that the confidential information is required for the purpose of professional disciplinary

proceedings and with state, federal, and international law enforcement officials; and

(iii) in the case of Subsections (2)(c)(i) and (ii), provided that the recipient agrees, and has

the legal authority to agree, to maintain the confidentiality of a document, material, data,

and other information in the same manner and to the same extent as required for the

commissioner.

(d) The commissioner may receive a document, material, data, and other information, including

an otherwise confidential document, material, data, or information, from the National

Association of Insurance Commissioners and its affiliates and subsidiaries, from regulatory

or law enforcement officials of other foreign or domestic jurisdictions and from the Actuarial

Board for Counseling and Discipline or its successor and shall maintain as confidential any

document, material, data, or other information received with notice or the understanding

that it is confidential or privileged under the laws of the jurisdiction that is the source of the

document, material, or other information.

(e) The commissioner may enter into agreements governing sharing and use of information

consistent with this Subsection (2).

(f) No waiver of an applicable privilege or claim of confidentiality in the confidential information

shall occur as a result of disclosure to the commissioner under this section or as a result of

sharing as authorized in Subsection (2)(c).

(g) A privilege established under the law of any state or jurisdiction that is substantially similar to

the confidentiality established under this Subsection (2) shall be available and enforced in any

proceeding in, and in any court of, this state.

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(h) In this section "regulatory agency," "law enforcement agency," and the "National Association

of Insurance Commissioners" include their employees, agents, consultants, and contractors.

(3) Notwithstanding Subsection (2), confidential information specified in Subsections (1)(a) and (1)

(d):

(a) may be subject to subpoena for the purpose of defending an action seeking damages from

the appointed actuary who submitted the related memorandum in support of an opinion

submitted under Section 31A-17-503 or principle-based valuation report developed under

Subsection 31A-17-515(2)(c) by reason of an action required by this part or by rules made

under this part;

(b) may otherwise be released by the commissioner with the written consent of the company; and

31A-17-503 or a principle-based valuation report developed under Subsection 31A-17-515(2)

governmental agency other than a state insurance department or is released by the company

to the news media, all portions of the memorandum or report shall no longer be confidential.

Enacted by Chapter 163, 2016 General Session

31A-17-518 Single state exemption.

(1) The commissioner may exempt specific product forms or product lines of a domestic company

that is licensed and doing business only in Utah from the requirements of Section 31A-17-514

provided:

(a) the commissioner has issued an exemption in writing to the company and has not

subsequently revoked the exemption in writing; and

(b) the company computes reserves using assumptions and methods used before the operative

date of the valuation manual in addition to any requirements established by the commissioner

and made by rule.

(2) For any company granted an exemption under this section, Sections 31A-17-503, 31A-17-504,

31A-17-505, 31A-17-506, 31A-17-507, 31A-17-508, 31A-17-509, 31A-17-510, 31A-17-511,

31A-17-512, and 31A-17-513 are applicable. With respect to any company applying this

exemption, any reference to Section 31A-17-514 found in Sections 31A-17-503, 31A-17-504,

31A-17-505, 31A-17-506, 31A-17-507, 31A-17-508, 31A-17-509, 31A-17-510, 31A-17-511,

31A-17-512, and 31A-17-513 is not applicable.

Enacted by Chapter 163, 2016 General Session

Part 6

Risk-Based Capital

31A-17-601 Definitions.

As used in this part:

(1) "Adjusted RBC report" means an RBC report that has been adjusted by the commissioner in

accordance with Subsection 31A-17-602(5).

(2) "Corrective order" means an order issued by the commissioner specifying corrective action that

the commissioner determines is required.

(3) "Health organization" means:

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(a) an entity that is authorized under Chapter 7, Nonprofit Health Service Insurance Corporations,

or Chapter 8, Health Maintenance Organizations and Limited Health Plans; and

(b) that is:

(i) a health maintenance organization;

(ii) a limited health service organization;

(iii) a dental or vision plan;

(iv) a hospital, medical, and dental indemnity or service corporation; or

(v) other managed care organization.

(4) "Life or accident and health insurer" means:

(a) an insurance company licensed to write life insurance, accident and health insurance, or both;

(b) a licensed property casualty insurer writing only disability insurance.

(5) "Property and casualty insurer" means any insurance company licensed to write lines of

insurance other than life but does not include a monoline mortgage guaranty insurer, financial

guaranty insurer, or title insurer.

(6) "RBC" means risk-based capital.

(7) "RBC instructions" means the RBC report including the National Association of Insurance

Commissioner's risk-based capital instructions that govern the year for which an RBC report is

prepared.

(8) "RBC level" means an insurer's or health organization's authorized control level RBC, company

action level RBC, mandatory control level RBC, or regulatory action level RBC.

(a) "Authorized control level RBC" means the number determined under the risk-based capital

formula in accordance with the RBC instructions;

(b) "Company action level RBC" means the product of 2.0 and its authorized control level RBC;

RBC; and

(d) "Regulatory action level RBC" means the product of 1.5 and its authorized control level RBC.

(9)

(a) "RBC plan" means a comprehensive financial plan containing the elements specified in

Subsection 31A-17-603(2).

(b) Notwithstanding Subsection (9)(a), the plan is a "revised RBC plan" if:

(i) the commissioner rejects the RBC plan; and

(ii) the plan is revised by the insurer or health organization, with or without the commissioner's

recommendation.

(10) "RBC report" means the report required in Section 31A-17-602.

Amended by Chapter 198, 2022 General Session

31A-17-602 RBC reports -- RBC of life and accident and health insurers -- RBC of property

and casualty insurers.

(1) Every domestic life or accident and health insurer, every domestic property and casualty

insurer, and every domestic health organization shall:

(a) on or before March 1, prepare and submit to the commissioner a report of its RBC levels

as of the end of the calendar year just ended, in a form and containing the information as is

required by the RBC instructions;

(b) file its RBC report with the insurance commissioner in any state in which the insurer or health

organization is authorized to do business, if the insurance commissioner of that state notifies

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the insurer or health organization of its request in writing, in which case the insurer or health

organization may file its RBC report not later than the later of:

(i) 15 days from the receipt of notice to file its RBC report with that state; or

(ii) March 1; and

Insurance Commissioners in accordance with RBC instructions.

(2) A life and accident and health insurer's RBC shall be determined in accordance with the

formula set forth in the RBC instructions. The formula shall take into account and may adjust

for the covariance between:

(a) the risk with respect to the insurer's assets;

(b) the risk of adverse insurance experience with respect to the insurer's liabilities and

obligations;

(d) all other business risks and other relevant risks as set forth in the RBC instructions.

(3) A property and casualty insurer's RBC shall be determined in accordance with the formula set

forth in the RBC instructions. The formula shall take the following into account and may adjust

for the covariance between:

(a) asset risk;

(b) credit risk;

(d) all other business risks and the other relevant risks as set forth in the RBC instructions.

(4) A health organization's RBC shall be determined in accordance with the formula set forth in

the RBC instructions. The formula shall take the following into account and may adjust for the

covariance between:

(a) asset risk;

(b) credit risk;

(d) all other business risks and such other relevant risks as are set forth in the RBC instructions.

(5)

(a) If a domestic insurer files an RBC report that the commissioner determines is inaccurate, the

commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the insurer

of the adjustment.

(b) The notice under Subsection (5)(a) shall contain a statement of the reason for the adjustment.

(6) The commissioner may make rules to assist in applying the provisions of this part to health

organizations.

Amended by Chapter 116, 2001 General Session

31A-17-603 Company action level event.

(1) "Company action level event" means any of the following events:

(a) the filing of an RBC report by an insurer or health organization that indicates that:

(i) the insurer's or health organization's total adjusted capital is greater than or equal to its

regulatory action level RBC but less than its company action level RBC;

(ii) if a life insurer, accident and health insurer, or health organization, the insurer or health

organization:

(A) has total adjusted capital that is greater than or equal to its company action level RBC but

less than the product of its authorized control level RBC and 3.0; and

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(B) triggers the trend test determined in accordance with the trend test calculation included in

the life, fraternal, or health RBC instructions; or

(iii) if a property and casualty insurer, the insurer has:

(A) total adjusted capital that is greater than or equal to its company action level RBC, but

less than the product of its authorized control level RBC and 3.0; and

(B) triggers the trend test determined in accordance with the trend test calculation included in

the property and casualty RBC instructions;

(b) the notification by the commissioner to the insurer or health organization of an adjusted RBC

report that indicates an event in Subsection (1)(a), provided the insurer or health organization

does not challenge the adjusted RBC report under Section 31A-17-607; or

RBC report that indicates the event in Subsection (1)(a), the notification by the commissioner

to the insurer or health organization that after a hearing the commissioner rejects the insurer's

or health organization's challenge.

(2)

(a) In the event of a company action level event, the insurer or health organization shall prepare

and submit to the commissioner an RBC plan that shall:

(i) identify the conditions that contribute to the company action level event;

(ii) contain proposals of corrective actions that the insurer or health organization intends to take

and that are expected to result in the elimination of the company action level event;

(iii) provide projections of the insurer's or health organization's financial results in the current

year and at least the four succeeding years, both in the absence of proposed corrective

actions and giving effect to the proposed corrective actions, including projections of:

(A) statutory operating income;

(B) net income;

(D) surplus; and

(E) RBC levels;

(iv) identify the key assumptions impacting the insurer's or health organization's projections and

the sensitivity of the projections to the assumptions; and

(v) identify the quality of, and problems associated with, the insurer's or health organization's

business, including its assets, anticipated business growth and associated surplus strain,

extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case.

(b) For purposes of Subsection (2)(a)(iii), the projections for both new and renewal business

may include separate projections for each major line of business and separately identify each

significant income, expense, and benefit component.

(3) The RBC plan shall be submitted:

(a) within 45 days of the company action level event; or

(b) if the insurer or health organization challenges an adjusted RBC report pursuant to Section

31A-17-607, within 45 days after notification to the insurer or health organization that after a

hearing the commissioner rejects the insurer's or health organization's challenge.

(4)

(a) Within 60 days after the submission by an insurer or health organization of an RBC plan to

the commissioner, the commissioner shall notify the insurer or health organization whether

the RBC plan:

(i) shall be implemented; or

(ii) is unsatisfactory.

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(b) If the commissioner determines the RBC plan is unsatisfactory, the notification to the insurer

or health organization shall set forth the reasons for the determination, and may propose

revisions that will render the RBC plan satisfactory. Upon notification from the commissioner,

the insurer or health organization shall:

(i) prepare a revised RBC plan that incorporates any revision proposed by the commissioner;

and

(ii) submit the revised RBC plan to the commissioner:

(A) within 45 days after the notification from the commissioner; or

(B) if the insurer challenges the notification from the commissioner under Section 31A-17-607,

within 45 days after a notification to the insurer or health organization that after a hearing

the commissioner rejects the insurer's or health organization's challenge.

(5) In the event of a notification by the commissioner to an insurer or health organization that

the insurer's or health organization's RBC plan or revised RBC plan is unsatisfactory, the

commissioner may specify in the notification that the notification constitutes a regulatory action

level event subject to the insurer's or health organization's right to a hearing under Section

31A-17-607.

(6) Every domestic insurer or health organization that files an RBC plan or revised RBC plan with

the commissioner shall file a copy of the RBC plan or revised RBC plan with the insurance

commissioner in any state in which the insurer or health organization is authorized to do

business if:

(a) the state has an RBC provision substantially similar to Subsection 31A-17-608(1); and

(b) the insurance commissioner of that state notifies the insurer or health organization of its

request for the filing in writing, in which case the insurer or health organization shall file a

copy of the RBC plan or revised RBC plan in that state no later than the later of:

(i) 15 days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with that

state; or

(ii) the date on which the RBC plan or revised RBC plan is filed under Subsections (3) and (4).

Amended by Chapter 168, 2017 General Session

31A-17-604 Regulatory action level event.

(1) "Regulatory action level event" means with respect to any insurer or health organization, any of

the following events:

(a) the filing of an RBC report by the insurer or health organization that indicates that the insurer's

or health organization's total adjusted capital is greater than or equal to its authorized control

level RBC but less than its regulatory action level RBC;

(b) the notification by the commissioner to an insurer or health organization of an adjusted RBC

report that indicates the event in Subsection (1)(a), provided the insurer or health organization

does not challenge the adjusted RBC report under Section 31A-17-607;

RBC report that indicates the event in Subsection (1)(a), the notification by the commissioner

to the insurer or health organization that after a hearing the commissioner rejects the insurer's

or health organization's challenge;

(d) the failure of the insurer or health organization to file an RBC report by March 1, unless the

insurer or health organization has:

(i) provided an explanation for the failure that is satisfactory to the commissioner; and

(ii) cured the failure within 10 days after March 1;

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(e) the failure of the insurer or health organization to submit an RBC plan to the commissioner

within the time period set forth in Subsection 31A-17-603(3);

(f) notification by the commissioner to the insurer or health organization that:

(i) the RBC plan or revised RBC plan submitted by the insurer or health organization is

unsatisfactory; and

(ii) the notification constitutes a regulatory action level event with respect to the insurer or

health organization, provided the insurer has not challenged the determination under

Section 31A-17-607;

(g) if, pursuant to Section 31A-17-607, the insurer or health organization challenges a

determination by the commissioner under Subsection (1)(f), the notification by the

commissioner to the insurer or health organization that after a hearing the commissioner

rejects the challenge; or

(h) notification by the commissioner to the insurer or health organization that the insurer or health

organization has failed to adhere to its RBC plan or revised RBC plan, but only if:

(i) the failure has a substantial adverse effect on the ability of the insurer or health organization

to eliminate the company action level event in accordance with its RBC plan or revised RBC

plan; and

(ii) the commissioner has so stated in the notification, provided the insurer or health

organization has not challenged the determination under Section 31A-17-607; or

(iii) if, pursuant to Section 31A-17-607, the insurer or health organization challenges a

determination by the commissioner under Subsection (1)(h), the notification by the

commissioner to the insurer or health organization that after a hearing the commissioner

rejects the challenge.

(2) In the event of a regulatory action level event the commissioner shall:

(a) require the insurer or health organization to prepare and submit an RBC plan or, if applicable,

a revised RBC plan;

(b) perform any examination or analysis the commissioner considers necessary of the assets,

liabilities, and operations of the insurer or health organization, including a review of its RBC

plan or revised RBC plan; and

action the commissioner determines is required.

(3) In determining a corrective action, the commissioner may take into account such factors the

commissioner considers relevant with respect to the insurer or health organization based upon

the commissioner's examination or analysis of the assets, liabilities, and operations of the

insurer or health organization, including the results of any sensitivity tests undertaken pursuant

to the RBC instructions. The RBC plan or revised RBC plan shall be submitted:

(a) within 45 days after the occurrence of the regulatory action level event;

(b) if the insurer or health organization challenges an adjusted RBC report pursuant to Section

31A-17-607 and the commissioner determines the challenge is not frivolous, within 45 days

after the notification to the insurer or health organization that after a hearing the commissioner

rejects the insurer's or health organization's challenge; or

31A-17-607 and the commissioner determines the challenge is not frivolous, within 45 days

after the notification to the insurer or health organization that after a hearing the commissioner

rejects the insurer's or health organization's challenge.

Amended by Chapter 116, 2001 General Session

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31A-17-605 Authorized control level event.

(1) "Authorized control level event" means any of the following events:

(a) the filing of an RBC report by the insurer or health organization that indicates that the insurer's

or health organization's total adjusted capital is greater than or equal to its mandatory control

level RBC but less than its authorized control level RBC;

(b) the notification by the commissioner to the insurer or health organization of an adjusted RBC

report that indicates the event in Subsection (1)(a), provided the insurer or health organization

does not challenge the adjusted RBC report under Section 31A-17-607;

RBC report that indicates the event in Subsection (1)(a), notification by the commissioner to

the insurer or health organization that after a hearing the commissioner rejects the insurer's or

health organization's challenge;

(d) the failure of the insurer or health organization to respond, in a manner satisfactory to the

commissioner, to a corrective order, provided the insurer or health organization has not

challenged the corrective order under Section 31A-17-607; or

(e) if the insurer or health organization has challenged a corrective order under Section

31A-17-607 and the commissioner after a hearing rejects the challenge or modifies the

corrective order, the failure of the insurer or health organization to respond, in a manner

satisfactory to the commissioner, to the corrective order subsequent to rejection or

modification by the commissioner.

(2)

(a) In the event of an authorized control level event with respect to an insurer or health

organization, the commissioner shall:

(i) take any action required under Section 31A-17-604 regarding an insurer or health

organization with respect to which a regulatory action level event has occurred; or

(ii) take any action as is necessary to cause the insurer or health organization to be

placed under regulatory control under Chapter 27, Part 5, Administrative Actions, if the

commissioner considers it to be in the best interests of:

(A) the policyholders or members;

(B) creditors of the insurer or health organization; and

(b) If the commissioner takes an action described in Subsection (2)(a), the authorized control

level event is sufficient grounds for the commissioner to take action under Chapter 27, Part 5,

Administrative Actions, and the commissioner shall have the rights, powers, and duties with

respect to the insurer or health organization set forth in Chapter 27, Part 5, Administrative

Actions.

report, the insurer or health organization is entitled to the protections afforded to an insurer or

health organization under Section 31A-27-504 pertaining to an action by the commissioner.

Amended by Chapter 309, 2007 General Session

31A-17-606 Mandatory control level event.

(1) "Mandatory control level event" means any of the following events:

(a) the filing of an RBC report that indicates that the insurer's or health organization's total

adjusted capital is less than its mandatory control level RBC;

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(b) notification by the commissioner to the insurer or health organization of an adjusted RBC

report that indicates the event in Subsection (1)(a), provided the insurer or health organization

does not challenge the adjusted RBC report under Section 31A-17-607; or

RBC report that indicates the event in Subsection (1)(a), notification by the commissioner to

the insurer or health organization that after a hearing the commissioner rejects the insurer's or

health organization's challenge.

(2)

(a) In the event of a mandatory control level event with respect to an insurer or health

organization, the commissioner shall take any actions necessary to place the insurer under

regulatory control under Chapter 27, Part 5, Administrative Actions.

(b) The mandatory control level event is sufficient grounds for the commissioner to take action

under Chapter 27, Part 5, Administrative Actions, and the commissioner shall have the

rights, powers, and duties with respect to the insurer or health organization as are set forth in

Chapter 27, Part 5, Administrative Actions.

organization is entitled to the protections of Section 31A-27-504 pertaining to summary

proceedings.

(d) Notwithstanding the other provisions of Subsection (2), the commissioner may forego action

for up to 90 days after the mandatory control level event if the commissioner finds there is a

reasonable expectation that the mandatory control level event may be eliminated within the

90-day period.

Amended by Chapter 309, 2007 General Session

31A-17-607 Hearings.

(1)

(a) Following receipt of a notice described in Subsection (2), the insurer or health organization

shall have the right to a confidential departmental hearing at which the insurer or health

organization may challenge a determination or action by the commissioner.

(b) The insurer or health organization shall notify the commissioner of its request for a hearing

within five days after the notification by the commissioner under Subsection (2).

shall set a date for the hearing, which date shall be no less than 10 nor more than 30 days

after the date of the insurer's or health organization's request.

(2) An insurer or health organization has the right to a hearing under Subsection (1) after:

(a) notification to an insurer or health organization by the commissioner of an adjusted RBC

report;

(b) notification to an insurer or health organization by the commissioner that:

(i) the insurer's or health organization's RBC plan or revised RBC plan is unsatisfactory; and

(ii) the notification constitutes a regulatory action level event with respect to the insurer or

health organization;

organization has failed to adhere to its RBC plan or revised RBC plan and that the failure has

substantial adverse effect on the ability of the insurer or health organization to eliminate the

company action level event with respect to the insurer or health organization in accordance

with its RBC plan or revised RBC plan; or

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(d) notification to an insurer or health organization by the commissioner of a corrective order with

respect to the insurer or health organization.

Amended by Chapter 290, 2014 General Session

Amended by Chapter 300, 2014 General Session

31A-17-608 Confidentiality -- Prohibition on announcements -- Prohibition on use in

ratemaking.

(1)

(a) The commissioner shall keep confidential to the extent that information in a report or plan is

not required to be included in a publicly available annual statement schedule, any detail in an

RBC report or RBC plan including the results or report of any examination or analysis of an

insurer or health organization performed pursuant to this part, that is filed by a domestic or

foreign insurer or health organization with the commissioner or any corrective order issued by

the commissioner pursuant to examination or analysis.

(b) Information kept confidential under Subsection (1)(a) may not be made public or be subject

to subpoena, other than by the commissioner and then only for the purpose of enforcement

actions taken by the commissioner pursuant to this part or any other provision of the

insurance laws of this state.

(2)

(a) Except as otherwise required under this part, any insurer or health organization, producer,

or other person engaged in any manner in the insurance business may not publish,

disseminate, circulate or place before the public, or cause, directly or indirectly, the

publishing, disseminating, circulating or placing before the public including, in a newspaper,

magazine, other publication, a notice, circular, pamphlet, letter, or poster, or over any

radio or television station, an advertisement, announcement, or statement containing an

assertion, representation, or statement with regard to the RBC levels of any insurer or health

organization, or of any component derived in the calculation.

(b) If any materially false statement with respect to the comparison regarding an insurer's or

health organization's total adjusted capital to its RBC levels, or an inappropriate comparison

of any other amount to the insurer's or health organization's RBC levels is published in

any written publication and the insurer or health organization is able to demonstrate to the

commissioner with substantial proof the falsity of the statement or the inappropriateness, the

insurer or health organization may publish an announcement in a written publication if the

sole purpose of the announcement is to rebut the materially false statement or inappropriate

comparison.

(3) The commissioner may not use an RBC instruction, report, plan, or revised plan:

(a) for ratemaking;

(b) as evidence in any rate proceeding; or

any line of insurance or coverage that an insurer or health organization or any affiliate is

authorized to write or cover.

Amended by Chapter 298, 2003 General Session

31A-17-609 Alternate adjusted capital.

(1) Except as provided in Section 31A-17-602, an insurer or health organization licensed under

Chapter 5, Domestic Stock and Mutual Insurance Corporations, Chapter 7, Nonprofit Health

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Service Insurance Corporations, Chapter 8, Health Maintenance Organizations and Limited

Health Plans, Chapter 9, Insurance Fraternals, and Chapter 14, Foreign Insurers, shall maintain

total adjusted capital as defined in Section 31A-1-301 in an amount equal to the greater of:

(a) 175% of the minimum required capital, or of the minimum permanent surplus in the case of

nonassessable mutuals, required by Section 31A-5-211, 31A-7-201, 31A-8-209, 31A-9-209,

or 31A-14-205; or

(b) the net total of:

(i) 10% of net insurance premiums earned during the year; plus

(ii) 5% of the admitted value of common stocks and real estate; plus

(iii) 2% of the admitted value of all other invested assets, exclusive of cash deposits, short-term

investments, policy loans, and premium notes; less

(iv) the amount of any asset valuation reserve being maintained by the insurer or health

organization, but not to exceed the sum of Subsections (1)(b)(ii) and (iii).

(2) As used in Subsection (1)(b), "premiums earned" means premiums and other consideration

earned for insurance in the 12-month period ending on the date the calculation is made.

(3) The commissioner may consider an insurer or health organization to be financially hazardous

under Subsection 31A-27a-207(1)(i), if the insurer or health organization does not have

qualified assets in an aggregate value exceeding the sum of the insurer's or health

organization's liabilities and the total adjusted capital required by Subsection (1).

(4) The commissioner shall consider an insurer or health organization to be financially hazardous

under Subsection 31A-27a-207(1)(i) if the insurer or health organization does not have qualified

assets in an aggregate value exceeding the sum of the insurer's or health organization's

liabilities and 70% of the total adjusted capital required by Subsection (1).

Amended by Chapter 309, 2007 General Session

31A-17-610 Foreign insurers or health organizations.

(1)

(a) Any foreign insurer or health organization shall, upon the written request of the commissioner,

submit to the commissioner an RBC report as of the end of the most recent calendar year by

the later of:

(i) the date an RBC report would be required to be filed by a domestic insurer or health

organization under this part; or

(ii) 15 days after the request is received by the foreign insurer or health organization.

(b) Any foreign insurer or health organization shall, at the written request of the commissioner,

promptly submit to the commissioner a copy of any RBC plan that is filed with the insurance

commissioner of any other state.

(2)

(a) The commissioner may require a foreign insurer or health organization to file an RBC plan

with the commissioner if:

(i) there is a company action level event, regulatory action level event, or authorized control

level event with respect to the foreign insurer or health organization as determined under:

(A) the RBC statute applicable in the state of domicile of the insurer or health organization; or

(B) if no RBC statute is in force in that state, under this part; and

(ii) the insurance commissioner of the state of domicile of the foreign insurer or health

organization fails to require the foreign insurer or health organization to file an RBC plan in

the manner specified under:

(A) that state's RBC statute; or

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(B) if no RBC statute is in force in that state, under Section 31A-17-603.

(b) If the commissioner requires a foreign insurer or health organization to file an RBC plan, the

failure of the foreign insurer or health organization to file the RBC plan with the commissioner

is grounds to order the insurer or health organization to cease and desist from writing new

insurance business in this state.

(3) The commissioner may petition a court as permitted under Section 31A-27a-901 with respect to

the liquidation of property of a foreign insurer or health organization found in this state if:

(a) a mandatory control level event occurs with respect to any foreign insurer or health

organization; and

(b) no domiciliary receiver has been appointed with respect to the foreign insurer or health

organization under the rehabilitation and liquidation statute applicable in the state of domicile

of the foreign insurer or health organization.

Amended by Chapter 401, 2023 General Session

31A-17-611 Immunity.

There may be no liability on the part of, and no cause of action may arise against, the

commissioner or the insurance department or its employees or agents for any action taken by them

in the performance of their powers and duties under this part.

Enacted by Chapter 9, 1996 Special Session 2

31A-17-612 Severability clause.

If any provision of this part, or the application of the part to any person or circumstance, is held

invalid, the determination may not affect the provisions or applications of this part that can be given

effect without the invalid provision or application, and to that end the provisions of this part are

severable.

Enacted by Chapter 9, 1996 Special Session 2

31A-17-613 Effective date of notice.

A notice by the commissioner to an insurer or health organization that may result in regulatory

action under this chapter is effective the sooner of:

(1) the date the insurer or health organization receives the notice; or

(2) three days after mailing the notice.

Amended by Chapter 116, 2001 General Session

Chapter 18

Investments

31A-18-101 Scope -- Definitions.

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(1) Except as otherwise provided in this title, this chapter and the rules adopted to implement it

apply to all insurers authorized to do business in this state, including a reinsurer.

(2) As used in this chapter, "cash" means a medium of exchange that a depository institution, as

defined in Section 7-1-103, accepts for deposit and allows an immediate credit to an account in

the depository institution, including the following in a depository institution:

(a) a savings account; or

(b) a certificate of deposit with a maturity date within one year or less from the day on which the

certificate of deposit is acquired.

Amended by Chapter 257, 2008 General Session

31A-18-102 Separate account investments.

(1) Except as provided under Subsection (2), each separate account established under Section

31A-5-217 shall be evaluated as a separate insurer to determine whether the account complies

with Chapters 17, Determination of Financial Condition, and Chapter 18, Investments.

(2) Except as provided under Subsection (3), the amounts allocated to each separate account, and

accumulations thereon, may be invested and reinvested without regard to any requirements or

limitations prescribed by Chapter 18, Investments.

(3) To the extent that the corporation's reserve liability, with regard to benefits guaranteed as

to dollar amount and duration and funds guaranteed as to principal amount or stated rate of

interest, is maintained in any separate account, a portion of the assets of the account at least

equal to the reserve liability shall be invested in accordance with this chapter, or in accordance

with such requirements as the commissioner prescribes by rule.

(4) Assets allocated to a separate account shall be valued at market value on the date of valuation,

or, if there is no readily available market, then in accordance with the applicable contract.

However, a portion of the assets of the account at least equal to the corporation's reserve

liability with regard to the guaranteed benefits and funds referred to in Subsection (3), if any,

shall be reported separately and valued in accordance with the rules otherwise applicable to the

corporation's assets or in accordance with rules adopted under Subsection (3). No securities

valuation reserve or other reserve for fluctuation in the value of securities is required for assets

that do not have to comply with this chapter.

Enacted by Chapter 242, 1985 General Session

31A-18-103 Protection against currency fluctuations.

Any insurer whose business requires it to make payment in different currencies may have

investments in securities in each of those currencies in an amount that, independently of all other

investments, meets the requirements of the Insurance Code as applied separately to the insurer's

obligations in each currency. The commissioner may by order require an insurer, or by rule

require a class of insurers, to maintain these separate currency investments if the obligations in

other currencies are large enough to present a problem of financial stability if there are substantial

fluctuations in relative currency values.

Enacted by Chapter 242, 1985 General Session

31A-18-105 Permitted classes of investments.

The following classes of investment may be counted for the purposes specified under Chapter

17, Part 6, Risk-Based Capital:

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(1) a bond or other evidence of indebtedness of:

(a) a governmental unit in the United States or Canada;

(b) an instrumentality of a governmental unit described in Subsection (1)(a); or

(2) an equipment trust obligation or certificate that is an adequately secured instrument:

(a) evidencing an interest in transportation equipment that is located wholly or in part within the

United States; and

(b) with a right to receive determined portions of the rental, or to purchase other fixed obligatory

payments for the use or purchase of the transportation equipment;

(3) a loan secured by:

(a) one or more mortgages;

(b) one or more trust deeds; or

States;

(4) a loan secured by a pledged security or evidence of debt eligible for investment under this

section;

(5) a preferred stock of a United States corporation;

(6)

(a) a common stock of a United States corporation; or

(b) an American depository receipt if traded on one of the following exchanges:

(i) New York;

(ii) American; or

(iii) NASDAQ;

(7) real estate that is used as the home office or branch office of the insurer;

(8) real estate in the United States that produces substantial income;

(9) a loan upon the security of the insurer's own policies in an amount that:

(a) is adequately secured by the policies; and

(b) does not exceed the surrender value of the policies;

(10) a financial futures contract used for hedging and not for speculation, as approved under rules

adopted by the commissioner;

(11) an investment in a foreign security of a class permitted under this section as required for

compliance with Section 31A-18-103;

(12) an investment permitted under Subsection 31A-18-102(2);

(13) an American depository receipt not traded on one of the following exchanges:

(a) New York;

(b) American; or

(14) an investment other than those listed in Subsections (1) through (13) that is determined to

be admitted in the Accounting Practices and Procedures Manual, published by the National

Association of Insurance Commissioners;

(15) cash; and

(16) another investment the commissioner authorizes by rule.

Amended by Chapter 257, 2008 General Session

31A-18-106 Investment limitations generally applicable.

(1) The investment limitations listed in Subsections (1)(a) through (m) apply to an insurer.

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(a) For an investment authorized under Subsection 31A-18-105(1) that is not amortizable under

applicable valuation rules, the limitation is 5% of assets.

(b) For an investment authorized under Subsection 31A-18-105(2), the limitation is 10% of

assets.

(d) For an investment authorized under Subsection 31A-18-105(4) that is considered to be an

investment in a kind of security or evidence of debt pledged, the investment is subject to the

class limitations applicable to the pledged security or evidence of debt.

(e) For an investment authorized under Subsection 31A-18-105(5), the limitation is 35% of

assets.

(f) For an investment authorized under Subsection 31A-18-105(6), the limitation is:

(i) 20% of assets for a life insurer; and

(ii) 50% of assets for a nonlife insurer.

(g) For an investment authorized under Subsection 31A-18-105(7), the limitation is:

(i) 5% of assets; or

(ii) for an insurer organized and operating under Chapter 7, Nonprofit Health Service Insurance

Corporations, 25% of assets.

(h) For an investment authorized under Subsection 31A-18-105(8), the limitation is:

(i) 20% of assets, inclusive of home office and branch office properties; or

(ii) for an insurer organized and operating under Chapter 7, Nonprofit Health Service Insurance

Corporations, 35% of assets, inclusive of home office and branch office properties.

(i) For an investment authorized under Subsection 31A-18-105(10), the limitation is 1% of assets.

(j) For an investment authorized under Subsection 31A-18-105(11), the limitation is the greater of

that permitted or required for compliance with Section 31A-18-103.

(k) Except as provided in Subsection (1)(l), an insurer's investments in subsidiaries is limited

to 50% of the insurer's total adjusted capital. An investment by an insurer in a subsidiary

includes:

(i) a loan, advance, or contribution to a subsidiary by an insurer; and

(ii) an insurer holding a bond, note, or stock of a subsidiary.

(l) Under a plan of merger approved by the commissioner, the commissioner may allow an

insurer any portion of its assets invested in an insurance subsidiary. The approved plan

of merger shall require the acquiring insurer to conform its accounting for investments in

subsidiaries to Subsection (1)(k) within a specified period that may not exceed five years.

(m) For an investment authorized under Subsections 31A-18-105(13) and (14), the aggregate

limitation is 10% of assets.

(2) The limits on investments listed in Subsections (2)(a) through (e) apply to each insurer.

(a)

(i) For all investments in a single entity, its affiliates, and subsidiaries, the limitation is 10% of

assets, except that the limit imposed by this Subsection (2)(a) does not apply to:

(A) an investment in the government of the United States or its agencies;

(B) an investment guaranteed by the government of the United States;

(D) a cash deposit that:

(I) is cash;

(II) is held by a depository institution, as defined in Section 7-1-103, that:

(Aa) is solvent;

(Bb) is federally insured; and

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(Cc) subject to Subsection (2)(a)(ii), has a Tier 1 leverage ratio of at least 5%, if the

depository institution is a bank as defined in Section 7-1-103, or a ratio of Tier 1 capital

to total assets of at least 5%, if the depository institution is not a bank; and

(III) does not exceed the greater of:

(Aa) .4 times the Tier 1 capital of the depository institution; or

(Bb) the amount insured by a federal deposit insurance agency.

(ii) The commissioner by rule made in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act, shall:

(A) define "Tier 1 leverage ratio";

(B) define "Tier 1 capital"; and

(b) An investment authorized by Subsection 31A-18-105(3) shall comply with the requirements

listed in this Subsection (2)(b).

(i)

(A) Except as provided in this Subsection (2)(b)(i), the amount of a loan secured by a

mortgage or deed of trust may not exceed 80% of the value of the real estate interest

mortgaged, unless the excess over 80%:

(I) is insured or guaranteed by:

(Aa) the United States;

(Bb) a state of the United States;

(Cc) an instrumentality, agency, or political subdivision of the United States or a state; or

(Dd) a combination of entities described in this Subsection (2)(b)(i)(A)(I); or

(II) is insured by an insurer approved by the commissioner and qualified to insure that type

of risk in this state.

(B) A mortgage loan representing a purchase money mortgage acquired from the sale of real

estate is not subject to the limitation of Subsection (2)(b)(i)(A).

(ii) Subject to Subsection (2)(b)(v), a loan or evidence of debt secured by real estate may only

be secured by:

(A) unencumbered real property that is located in the United States; or

(B) an unencumbered interest in real property that is located in the United States.

(iii) Evidence of debt secured by a first mortgage or deed of trust upon a leasehold estate shall

require that:

(A) the leasehold estate exceed the maturity of the loan by not less than 10% of the lease

term;

(B) the real estate not be otherwise encumbered; and

(iv) Subject to Subsection (2)(b)(v):

(A) participation in a mortgage loan shall:

(I) be senior to other participants; and

(II) give the holder substantially the rights of a first mortgagee; or

(B) the interest of the insurer in the evidence of indebtedness shall be of equal priority, to the

extent of the interest, with other interests in the real property.

(v) A fee simple or leasehold real estate or an interest in a fee simple or leasehold is not

considered to be encumbered within the meaning of this chapter by reason of a prior

mortgage or trust deed held or assumed by the insurer as a lien on the property, if:

(A) the total of the mortgages or trust deeds held does not exceed 70% of the value of the

property; and

(B) the security created by the prior mortgage or trust deed is a first lien.

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of the collateral pledged, except that a loan upon the pledge of a United States government

bond may be equal to the market value of the pledge.

(d) For an equity interest in a single real estate property authorized under Subsection

31A-18-105(8), the limitation is 5% of assets.

(e) An investment authorized under Subsection 31A-18-105(10) shall be in connection with a

potential change in the value of specifically identified:

(i) asset that the insurer owns; or

(ii) liability that the insurer has incurred.

(3) The restrictions on investments listed in Subsections (3)(a) and (b) apply to each insurer.

(a) Except for a financial futures contract and real property acquired and occupied by the

insurer for home and branch office purposes, a security or other investment is not eligible for

purchase or acquisition under this chapter unless it is:

(i) interest bearing or income paying; and

(ii) not then in default.

(b) A security is not eligible for purchase at a price above its market value.

(4) Computation of percentage limitations under this section:

(a) is based only upon the insurer's total qualified invested assets described in Section

31A-18-105 and this section, as these assets are valued under Section 31A-17-401; and

(b) excludes investments permitted under Section 31A-18-108 and Subsections 31A-17-203(2)

and (3).

(5) An insurer may not make an investment that, because the investment does not conform to

Section 31A-18-105 and this section, has the result of rendering the insurer, under Chapter 17,

Part 6, Risk-Based Capital, subject to proceedings under Chapter 27a, Insurer Receivership

Act.

(6) A pattern of persistent deviation from the investment diversification standards set forth in

Section 31A-18-105 and this section may be grounds for a finding that the one or more

persons with authority to make the insurer's investment decisions are "incompetent" as used in

Subsection 31A-5-410(3).

(7) Section 77r-1 of the Secondary Mortgage Market Enhancement Act of 1984 does not apply to

the purchase, holding, investment, or valuation limitations of assets of insurance companies

subject to this chapter.

Amended by Chapter 297, 2011 General Session

31A-18-107 Disposal of nonqualified assets.

(1) The commissioner may allow a reasonable time, not longer than 10 years, for disposal of any

investment which was a qualified asset when made, but which, because of changes in valuation

or changes in the insurer's asset mix, is no longer a qualified asset under Section 31A-17-201.

(2) The commissioner may allow a reasonable time during which an investment which is not a

qualified asset may be characterized as one, but only if the investment was made by mistake

or if the forced sale of the asset would be contrary to the interests of insureds, creditors, or the

Utah public.

Enacted by Chapter 242, 1985 General Session

31A-18-108 Investment of excess surplus.

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(1) If an insurer has excess surplus, as defined under Section 31A-1-301, then to the extent of its

excess surplus, the insurer may invest in a manner inconsistent with the limitations of Section

31A-18-106 or in other assets approved by the commissioner.

(2) This section does not empower any insurer to make investments that are:

(a) illegal; or

(b) prohibited under Section 31A-4-107.

(3) Each insurer has the burden of establishing the extent of its excess surplus.

Amended by Chapter 131, 1999 General Session

31A-18-110 Investment valuation reserves.

(1) The commissioner may by rule, applicable to all or any specified classes of insurers, provide for

the establishment, in reasonable amounts, of investment valuation reserves that are necessary

to lessen the impact on surplus of the fluctuation of the values of specific classes of assets. In

formulating these rules, the commissioner shall consider:

(a) similar rules used in other states or recommended for use by the National Association of

Insurance Commissioners;

(b) the propensities of the various types and classes of investments to fluctuate in value; and

interest rates, price-level changes, market volatility, and economic growth or decline.

(2) The commissioner may by order require an individual insurer to establish investment valuation

reserves in addition to those required for other insurers of the class to which the insurer

belongs, to the extent that the financial condition of the insurer and the nature of its assets

and liabilities or business require that those reserves be established to adequately protect its

insureds.

(3) Where reasonably possible, reserves required under Subsection (1) shall correspond with

those generally required in other states.

Enacted by Chapter 242, 1985 General Session

Chapter 19a

Utah Rate Regulation Act

Part 1

General Provisions

31A-19a-101 Title -- Scope and purposes.

(1) This chapter is known as the "Utah Rate Regulation Act."

(2)

(a)

(i) Except as provided in Subsection (2)(a)(ii), this chapter applies to all kinds and lines of direct

insurance written on risks or operations in this state by an insurer authorized to do business

in this state.

(ii) This chapter does not apply to:

(A) life insurance;

(B) credit life insurance;

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(D) health and accident and health insurance;

(E) credit accident and health insurance; and

(F) reinsurance.

(b) This chapter applies to all insurers authorized to do any line of business, except those

specified in Subsection (2)(a)(ii).

(3) It is the purpose of this chapter to:

(a) protect policyholders and the public against the adverse effects of excessive, inadequate, or

unfairly discriminatory rates;

(b) encourage independent action by and reasonable price competition among insurers so that

rates are responsive to competitive market conditions;

(d) provide regulatory procedures for the maintenance of appropriate data reporting systems;

(e) authorize cooperative action among insurers in the rate-making process, and regulate

that cooperation to prevent practices that bring about a monopoly or lessen or destroy

competition;

(f) encourage the most efficient and economic marketing practices; and

(g) regulate the business of insurance in a manner that, under the McCarran-Ferguson Act, 15

U.S.C. Secs. 1011 through 1015, will preclude application of federal antitrust laws.

(4) Rate filings made prior to July 1, 1986, under former Title 31, Chapter 18, are continued. Rate

filings made after July 1, 1986, are subject to the requirements of this chapter.

Amended by Chapter 308, 2002 General Session

31A-19a-102 Definitions.

As used in this chapter:

(1) "Classification system" or "classification" means the process of grouping risks with similar risk

characteristics so that differences in anticipated costs may be recognized.

(2)

(a) "Developed losses" means losses adjusted using standard actuarial techniques to eliminate

the effect of differences between:

(i) current payment or reserve estimates; and

(ii) payments or reserve estimates that are anticipated to provide actual ultimate loss payments.

(b) For purposes of Subsection (2)(a), losses includes loss adjustment expense.

(3) "Dividend" means money paid to a policyholder from the remaining portion of the premium paid

for a policy:

(a) based on the participating class of business; and

(b) after the insurer has made deductions for:

(i) losses;

(ii) expenses;

(iii) additions to reserves; and

(iv) profit and contingencies.

(4) "Expenses" means that portion of a rate attributable to:

(a) acquisition;

(b) field supervision;

(d) general expenses;

(e) taxes;

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(f) licenses; and

(g) fees.

(5) "Experience rating" means a rating procedure that:

(a) uses the past insurance experience of an individual policyholder to forecast the future

losses of the policyholder by measuring the policyholder's loss experience against the loss

experience of policyholders in the same classification; and

(b) produces a prospective premium credit, debit, or unity modification.

(6) "Joint underwriting" means a voluntary arrangement established to provide insurance coverage

for a risk pursuant to which two or more insurers jointly contract with the insured at a price and

under policy terms agreed upon between the insurers.

(7) "Loss adjustment expense" means the expenses incurred by the insurer in the course of

settling claims.

(8)

(a) "Market" means the interaction between buyers and sellers consisting of a:

(i) product component; and

(ii) geographic component.

(b) A product component consists of identical or readily substitutable products if the products are

compared as to factors including:

(i) coverage;

(ii) policy terms;

(iii) rate classifications; and

(iv) underwriting.

product through sales outlets and other distribution mechanisms or patterns.

(9) "Mass marketed plan" means a method of selling insurance when:

(a) the insurance is offered to:

(i) employees of a particular employer;

(ii) members of a particular association or organization; or

(iii) persons grouped in a manner other than described in Subsection (8)(a)(i) or (ii), except

groupings formed principally for the purpose of obtaining insurance; and

(b) the employer, association, or other organization, if any, has agreed to, or otherwise affiliated

itself with, the sale of insurance to its employees or members.

(10) "Prospective loss costs" means the same as pure premium rate.

(11) "Pure premium rate" means that portion of a rate that:

(a) does not include provisions for profit or expenses, other than loss adjustment expenses; and

(b) is based on historical aggregate losses and loss adjustment expenses that are:

(i) adjusted through development to their ultimate value; and

(ii) projected through trending to a future point in time.

(12)

(a) "Rate" means that cost of insurance per exposure unit either expressed as:

(i) a single number; or

(ii) as a pure premium rate, adjusted before any application of individual risk variations, based

on loss or expense considerations to account for the treatment of:

(A) expenses;

(B) profit; and

(b) "Rate" does not include a minimum premium.

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(13) "Rating tiers" means an underwriting and rating plan designed to categorize insurance risks

that have common characteristics related to potential insurance loss into broad groups for the

purpose of establishing a set of rating levels that reflect definable levels of potential hazard or

risk.

(14) "Riskiness" means the variability of results around the average expected result.

(15) "Supplementary rate information" includes one or more of the following needed to determine

the applicable rate in effect or to be in effect:

(a) a manual or plan of rates;

(b) a statistical plan;

(d) a rating schedule;

(e) a minimum premium;

(f) a policy fee;

(g) a rating rule;

(h) a rate-related underwriting rule;

(i) a rate modification plan; or

(j) any other similar information prescribed by rule of the commissioner as supplementary rate

information.

(16) "Supporting information" includes one or more of the following:

(a) data demonstrating actuarial justification for the basic rate factors, classifications, expenses,

and profit factors used by the filer;

(b) the experience and judgment of the filer;

(d) the interpretation of any other data relied upon by the filer;

(e) descriptions of methods used in making the rates; or

(f) any other information defined by rule as supporting information that is required to be filed.

(17) "Trending" means any procedure for projecting, for the period during which the policies are to

be effective:

(a) losses to the average date of loss; or

(b) premiums or exposures to the average date of writing.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-103 Exemptions.

(1) The commissioner may by rule exempt from any or all of the provisions of this chapter:

(a) any person;

(b) a class of persons; or

(2) The exemption described in Subsection (1) shall be given only if and to the extent that the

commissioner finds the application of the provisions of this chapter to that person or group is

unnecessary to achieve the purposes of this chapter.

Renumbered and Amended by Chapter 130, 1999 General Session

Part 2

General Rate Regulation

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31A-19a-201 Rate standards.

(1) Rates may not be excessive, inadequate, or unfairly discriminatory.

(2)

(a) Rates are not excessive if a reasonable degree of price competition exists at the consumer

level with respect to the class of business to which they apply. In determining whether a

reasonable degree of price competition exists, the commissioner shall consider:

(i) relevant tests of workable competition pertaining to:

(A) market structure;

(B) market performance; and

(ii) the practical opportunities available to consumers in the market to:

(A) acquire pricing and other consumer information; and

(B) compare and obtain insurance from competing insurers.

(b) The tests described in Subsection (2)(a) include:

(i) the size and number of insurers actively engaged in the market and class of business;

(ii) the market shares of insurers actively engaged in the market and changes in market shares;

(iii) the existence of rate differentials in that class of business;

(iv) ease of entry and latent competition of insurers capable of easy entry;

(v) availability of consumer information concerning the product and sales outlets or other sales

mechanisms; and

(vi) efforts of insurers to provide consumer information.

(i) rates are likely to produce a long-term profit that is unreasonably high in relation to the

riskiness of the class of business; or

(ii) expenses are unreasonably high in relation to the services rendered.

(3) Rates are inadequate if:

(a) they are clearly insufficient, when combined with the investment income attributable to them,

to sustain the projected losses and expenses in the class of business to which they apply;

and

(b) the use of such rates has or, if continued, will have:

(i) the effect of substantially lessening competition; or

(ii) the tendency to create a monopoly in any market.

(4)

(a) A rate is unfairly discriminatory if price differentials fail to equitably reflect the differences in

expected losses and expenses after allowing for practical limitations.

(b) A rate is not unfairly discriminatory if it is averaged broadly among persons insured under a:

(i) group, franchise, or blanket policy; or

(ii) mass marketed plan.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-202 Rating methods.

(1) To determine whether rates comply with the standards under Section 31A-19a-201, the

commissioner shall consider the:

(a) criteria listed in Subsection (2);

(b) classifications, if any, permitted under Subsection (3);

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(d) profits described in Subsection (5).

(2) In determining rates the commissioner shall consider within and outside of Utah:

(a) past and prospective loss experience;

(b) catastrophe hazards;

(d) loadings for leveling premium rates over time;

(e) reasonable margin for profit and contingencies;

(f) dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their

policyholders; and

(g) other relevant factors.

(3)

(a) Risks may be grouped by classifications for the establishment of rates and minimum

premiums.

(b)

(i) A classification rate may be modified to produce rates for individual risks in accordance

with rating plans or schedules that establish reasonable standards for measuring probable

variations in hazards or expense provisions.

(ii) The standards described in Subsection (3)(b)(i) may measure any differences among risks

that can be demonstrated to have a probable effect upon losses or expenses.

creed, national origin, or the religion of the insured.

(4) The expense provisions included in the rates to be used by an insurer shall reflect:

(a) the operating methods of the insurer; and

(b) its anticipated expenses.

(5) The rates may contain provision for contingencies and an allowance permitting a profit that

is not unreasonable in relation to the riskiness of the class of business. In determining the

reasonableness of the profit, consideration may be given to investment income.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-203 Rate filings.

(1)

(a) Except as provided in Subsections (4) and (5), every authorized insurer and every rate

service organization licensed under Section 31A-19a-301 that has been designated by any

insurer for the filing of pure premium rates under Subsection 31A-19a-205(2) shall file with the

commissioner the following for use in this state:

(i) all rates;

(ii) all supplementary information; and

(iii) all changes and amendments to rates and supplementary information.

(b) An insurer shall file its rates by filing:

(i) its final rates; or

(ii) either of the following to be applied to pure premium rates that have been filed by a rate

service organization on behalf of the insurer as permitted by Section 31A-19a-205:

(A) a multiplier; or

(B)

(I) a multiplier; and

(II) an expense constant adjustment.

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(i) the effective date of the rates; and

(ii) the character and extent of the coverage contemplated.

(d) Except for workers' compensation rates filed under Sections 31A-19a-405 and 31A-19a-406,

each filing shall be within 30 days after the rates and supplementary information, changes,

and amendments are effective.

(e) A rate filing is considered filed when it has been receivedpursuant to procedures established

by the commissioner.

(f) The commissioner may by rule prescribe procedures for submitting rate filings by electronic

means.

(2)

(a) To show compliance with Section 31A-19a-201, at the same time as the filing of the rate and

supplementary rate information, an insurer shall file all supporting information to be used in

support of or in conjunction with a rate.

(b) If the rate filing provides for a modification or revision of a previously filed rate, the insurer is

required to file only the supporting information that supports the modification or revision.

the commissioner shall inform the insurer in writing of the lack of sufficient supporting

information.

(d) If the insurer does not provide the necessary supporting information within 45 calendar days

of the date on which the commissioner mailed notice under Subsection (2)(c), the rate filing

may be:

(i) considered incomplete and unfiled; and

(ii) returned to the insurer as:

(A) not filed; and

(B) not available for use.

(e) Notwithstanding Subsection (2)(d), the commissioner may extend the time period for filing

supporting information.

(f) If a rate filing is returned to an insurer as not filed and not available for use under Subsection

(2)(d), the insurer may not use the rate filing for any policy issued or renewed on or after 60

calendar days from the date the rate filing was returned.

(3) At the request of the commissioner, an insurer using the services of a rate service organization

shall provide a description of the rationale for using the services of the rate service

organization, including the insurer's:

(a) own information; and

(b) method of use of the rate service organization's information.

(4)

(a) An insurer may not make or issue a contract or policy except in accordance with the rate

filings that are in effect for the insurer as provided in this chapter.

(b) Subsection (4)(a) does not apply to contracts or policies for inland marine risks for which

filings are not required.

(5) Subsection (1) does not apply to inland marine risks, which, by general custom, are not written

according to standardized manual rules or rating plans.

(6)

(a) The insurer may file a written application, stating the insurer's reasons for using a higher rate

than that otherwise applicable to a specific risk.

(b) If the application described in Subsection (6)(a) is filed with and not disapproved by the

commissioner within 10 days after filing, the higher rate may be applied to the specific risk.

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(d) If disapproved, the rate otherwise applicable applies from the effective date of the policy, but

the insurer may cancel the policy pro rata on 10 days' notice to the policyholder.

(e) If the insurer does not cancel the policy under Subsection (6)(d), the insurer shall refund any

excess premium from the effective date of the policy.

(7)

(a) Agreements may be made between insurers on the use of reasonable rate modifications for

insurance provided under Section 31A-22-310.

(b) The rate modifications described in Subsection (7)(a) shall be filed immediately upon

agreement by the insurers.

Amended by Chapter 120, 2024 General Session

31A-19a-204 Rates open to inspection.

(1) Rates and supplementary rate information filed under this chapter shall be open to public

inspection at any reasonable time.

(2) The commissioner shall supply copies to any person on:

(a) request; and

(b) payment of a reasonable charge.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-205 Delegation of rate making and rate filing obligation.

(1) An insurer may:

(a) itself establish rates and supplementary rate information for any market segment based on

the factors in Section 31A-19a-202; or

(b) use rates, pure premium rates, and supplementary rate information prepared by a rate service

organization that the insurer selects, with:

(i) average expense factors determined by the rate service organization; or

(ii) any modification for its own expense and loss experience as the credibility of that

experience allows.

(2) An insurer may discharge its obligation under Subsection 31A-19a-203(1) by filing with the

commissioner:

(a) notification that the insurer uses pure premium rates and supplementary rate information

prepared by a licensed rate service organization that the insurer selects; and

(b) any information about modifications the insurer has made to those rates or that information as

is necessary fully to inform the commissioner.

(3) If an insurer has discharged its obligation in accordance with Subsection (2), the insurer's rates

and supplementary rate information shall be those, including any amendments, filed at intervals

by the rate service organization, subject to any modifications filed by the insurer.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-206 Disapproval of rates.

(1)

(a) Except for a conflict with the requirements of Section 31A-19a-201 or 31A-19a-202, the

commissioner may disapprove a rate at any time that the rate directly conflicts with:

(i) this title; or

(ii) any rule made under this title.

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(b) The disapproval under Subsection (1)(a) shall:

(i) be in writing;

(ii) specify the statute or rule with which the filing conflicts; and

(iii) state when the rule is no longer effective.

(c)

(i) If an insurer's or rate service organization's rate filing is disapproved under Subsection (1)(a),

the insurer or rate service organization may request a hearing on the disapproval within 30

calendar days of the date on which the order described in Subsection (1)(a) is issued.

(ii) If a hearing is requested under Subsection (1)(c)(i), the commissioner shall schedule the

hearing within 30 calendar days of the date on which the commissioner receives the request

for a hearing.

(iii) After the hearing, the commissioner shall issue an order:

(A) approving the rate filing; or

(B) disapproving the rate filing.

(2)

(a) If within 90 calendar days of the date on which a rate filing is filed the commissioner finds

that the rate filing does not meet the requirements of Section 31A-19a-201 or 31A-19a-202,

the commissioner shall send a written order disapproving the rate filing to the insurer or rate

organization that made the filing.

(b) The order described in Subsection (2)(a) shall specify how the rate filing fails to meet the

requirements of Section 31A-19a-201 or 31A-19a-202.

(c)

(i) If an insurer's or rate service organization's rate filing is disapproved under Subsection (2)(a),

the insurer or rate service organization may request a hearing on the disapproval within 30

calendar days of the date on which the order described in Subsection (2)(a) is issued.

(ii) If a hearing is requested under Subsection (2)(c)(i), the commissioner shall schedule the

hearing within 30 calendar days of the date on which the commissioner receives the request

for a hearing.

(iii) After the hearing, the commissioner shall issue an order:

(A) approving the rate filing; or

(B)

(I) disapproving the rate filing; and

(II) stating when, within a reasonable time from the date on which the order is issued, the

rate is no longer effective.

(d) In a hearing held under this Subsection (2), the insurer or rate service organization bears the

burden of proving compliance with the requirements of Section 31A-19a-201 or 31A-19a-202.

(3)

(a) If the order described in Subsection (2)(a) is issued after the implementation of the rate filing,

the commissioner may order that use of the rate filing be discontinued for any policy issued or

renewed on or after a date not less than 30 calendar days from the date the order was issued.

(b) If an insurer or rate service organization requests a hearing under Subsection (2), the order to

discontinue use of the rate filing is stayed:

(i) beginning on the date the insurer or rate service organization requests a hearing; and

(ii) ending on the date the commissioner issues an order after the hearing that addresses the

stay.

(4) If the order described in Subsection (2)(a) is issued before the implementation of the rate filing:

(a) an insurer or rate service organization may not implement the rate filing; and

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(b) the rates of the insurer or rate service organization at the time of disapproval continue to be in

effect.

(5)

(a) If after a hearing the commissioner finds that a rate that has been previously filed and has

been in effect for more than 90 calendar days no longer meets the requirements of Section

31A-19a-201 or 31A-19a-202, the commissioner may order that use of the rate by any insurer

or rate service organization be discontinued.

(b) The commissioner shall give any insurer that will be affected by an order that may be issued

under Subsection (5)(a) notice of the hearing at least 10 business days prior to the hearing.

(i) be in writing;

(ii) state the grounds for the order; and

(iii) state when, within a reasonable time from the date on which the order is issued, the rate is

no longer effective.

(d) The order issued under Subsection (5)(a) may not affect any contract or policy made or

issued prior to the expiration of the period set forth in the order.

(e) The order issued under Subsection (5)(a) may include a provision for a premium adjustment

for contracts or policies made or issued after the effective date of the order.

(6)

(a) When an insurer has no legally effective rates as a result of the commissioner's disapproval

of rates or other act, the commissioner shall, on the insurer's request, specify interim rates for

the insurer.

(b) An interim rate described in Subsection (6)(a):

(i) shall be high enough to protect the interests of all parties; and

(ii) may, when necessary to protect the policyholders, order that a specified portion of the

premiums be placed in an escrow account approved by the commissioner.

or any overcharge in the interim rates to be distributed appropriately, except that minimal

refunds to policyholders need not be distributed.

Amended by Chapter 297, 2011 General Session

31A-19a-207 Delayed effect of rates.

(1)

(a) The commissioner may by rule require that insurers in a market segment file with the

commissioner any changes in rates or supplementary rate information at least 30 calendar

days before they become effective if the commissioner finds, after a hearing, that in that

market segment:

(i) competition is not an effective regulator of the rates charged;

(ii) that a substantial number of companies are competing irresponsibly through the rates

charged; or

(iii) that there are widespread violations of this chapter.

(b) The commissioner may extend the waiting period under Subsection (1)(a) for not to exceed

30 additional calendar days by written notice to the filer before the first 30-day period expires.

commissioner shall consider, as to the particular market segment:

(i) the number of insurers actively engaged in providing coverage;

(ii) the respective market shares of insurers providing coverage;

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(iii) the volatility of market share fluctuations;

(iv) the ease of entry into the market; and

(v) any other known relevant factors.

(2)

(a) If the commissioner finds that a market segment is noncompetitive under Subsection (1), all

rates previously filed and in use may continue to be used until disapproved.

(b) After a finding of a noncompetitive market under Subsection (1), for purposes of disapproval,

the commissioner shall treat the filing of existing rates as having been filed as of the date of

the rule under Subsection (1).

(3) A competitive market is presumed to exist, unless the commissioner makes a contrary finding

under Subsection (1).

(4)

(a) A rule issued under Subsection (1) expires no later than one year from the date on which the

rule was adopted, unless the commissioner, after a hearing, renews the rule.

(b) A renewal hearing for a rule issued under Subsection (1) may not be held earlier than nine

months after the date on which the rule was issued or last renewed.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-208 Special restrictions on individual insurers.

(1) The commissioner may require by order that a particular insurer file any or all of its rates

and supplementary rate information 30 calendar days prior to their effective date, if the

commissioner finds, after a hearing, that to protect the interests of the insurer's insureds and

the public in Utah, the commissioner shall exercise closer supervision of the insurer's rates,

because of the insurer's financial condition or rating practices.

(2) The commissioner may extend the waiting period described in Subsection (1) for any filing for

not to exceed 30 additional calendar days, by written notice to the insurer before the first 30-

day period expires.

(3) A filing that has not been disapproved before the expiration of the waiting period is considered

to meet the requirements of this chapter, subject to the possibility of subsequent disapproval

under Section 31A-19a-206.

Amended by Chapter 297, 2011 General Session

31A-19a-209 Special provisions for title insurance.

(1)

(a)

(i) The Title and Escrow Commission 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.

(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 pertaining to the business of title insurance including:

(i) the maintenance of title plants; and

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(ii) the examining of public records to determine insurability of title to real property.

(2) A title insurer may not use any rate or other charge relating to the business of title insurance

that would cause the title insurer to fail to adequately underwrite a title insurance policy.

Amended by Chapter 120, 2024 General Session

31A-19a-210 Dividend and participating plans.

(1)

(a) This part does not prohibit the distribution by an insurer to a policyholder of any of the

following allowed or returned by the insurer:

(i) dividends;

(ii) savings; or

(iii) unabsorbed premium deposits.

(b) Notwithstanding Subsection (1)(a), an insurer may not distribute dividends, savings, or

unabsorbed premium deposits to an entity that has no insurable interest in the insurance.

(2) An insurer may not unfairly discriminate between policyholders in the payment of dividends,

savings, or unabsorbed premium deposits.

(3)

(a) A declaration of dividends or schedule explaining the basis for the distribution of dividends,

savings, or unabsorbed premium deposits allowed or returned by an insurer to its

policyholders is not a rating plan or system if the insurer:

(i) determines and declares the declaration or schedule after a specified policy accounting

period; and

(ii) files the declaration or schedule pursuant to Section 31A-21-310.

(b) A declaration or schedule described under Subsection (3)(a) is not required to be filed with

the commissioner under this chapter.

(4)

(a) A dividend or participating plan developed by insurers establishing given criteria for eligibility

and the general basis for distribution for a dividend, if declared, is considered a rating plan if

the plan is to be applicable to an insurance policy from its inception.

(b) A plan described in Subsection (4)(a) shall be filed with the commissioner pursuant to this

part.

(5) An insurer may not make the distribution of a dividend or any portion of a dividend conditioned

upon renewal of the policy or contract.

Enacted by Chapter 130, 1999 General Session

31A-19a-211 Premium rate reduction for seniors -- Motor vehicle accident prevention course

-- Curriculum -- Certificate -- Exception.

(1)

(a) Each rate, rating schedule, and rating manual for the liability, personal injury protection, and

collision coverages of private passenger motor vehicle insurance policies submitted to or

filed with the commissioner shall provide for an appropriate reduction in premium charges for

those coverages if the principal operator of the covered vehicle:

(i) is a named insured who is 55 years of age or older; and

(ii) has successfully completed a motor vehicle accident prevention course as outlined in

Subsection (2).

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(b) Any premium reduction provided by an insurer under this section is presumed to be

appropriate unless credible data demonstrates otherwise.

(2)

(a) The curriculum for a motor vehicle accident prevention course under this section shall include:

(i) how impairment of visual and audio perception affects driving performance and how to

compensate for that impairment;

(ii) the effects of fatigue, medications, and alcohol on driving performance, when experienced

alone or in combination, and precautionary measures to prevent or offset ill effects;

(iii) updates on rules of the road and equipment, including safety belts and safe, efficient driving

techniques under present day road and traffic conditions;

(iv) how to plan travel time and select routes for safety and efficiency; and

(v) how to make crucial decisions in dangerous, hazardous, and unforeseen situations.

(b)

(i) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

Department of Public Safety may make rules to establish and clarify standards pertaining to

the curriculum and teaching methods of a course under this section.

(ii) These rules may include provisions allowing the department to conduct on-site visits to

ensure compliance with agency rules and this chapter.

(iii) These rules shall be specific as to time and manner of visits and provide for methods to

prohibit or remedy forcible visits.

(3)

(a) The premium reduction required by this section shall be effective for a named insured for a

three-year period after successful completion of the course outlined in Subsection (2).

(b) The insurer may require, as a condition of maintaining the premium reduction, that the named

insured not be convicted or plead guilty or nolo contendere to a moving traffic violation

for which points may be assessed against the named insured's driver license except for a

violation under Subsection 53-3-221(12).

(4) Each person who successfully completes the course outlined in Subsection (2) shall be issued

a certificate by the organization offering the course. The certificate qualifies the person for the

premium reduction required by this section.

(5) This section does not apply if the approved course outlined in Subsection (2) is attended as a

penalty imposed by a court or other governmental entity for a moving traffic violation.

Amended by Chapter 382, 2008 General Session

31A-19a-212 Premium increases prohibited for certain claims or inquiries.

(1) Each rate, rating schedule, and rating manual filed for personal lines insurance may not permit

a premium increase due to:

(a) a telephone call or other inquiry that does not result in the insured requesting the payment of

a claim; or

(b) a claim under a policy of insurance covering a motor vehicle or the operation of a motor

vehicle resulting from any incident, including acts of vandalism, in which the person named

in the policy or any other person using the insured motor vehicle with the express or implied

permission of the named insured is not at fault.

(2) Subsection (1) prohibits a premium increase when:

(a) a policy is issued; or

(b) a policy is renewed.

(3) This section is an exception to Section 31A-19a-201.

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Amended by Chapter 117, 2004 General Session

Amended by Chapter 266, 2004 General Session

31A-19a-213 Joint underwriting.

Notwithstanding Subsection 31A-19a-306(2)(a), insurers participating in joint underwriting

associations or joint reinsurance pursuant to Section 31A-20-102 or other arrangements for risk

sharing may in connection with such activity act in cooperation with each other in the making of

one or more of the following:

(1) rates;

(2) rating systems;

(3) policy forms;

(4) underwriting rules;

(5) surveys;

(6) inspections and investigations;

(7) the furnishing of loss and expense statistics or other information; or

(8) research.

Enacted by Chapter 130, 1999 General Session

31A-19a-214 Rating tiers.

(1) An insurer may file with the commissioner a rate filing that provides for a program with more

than one rate level in the same company or group of companies if:

(a) the program is based, to the extent feasible, upon mutually exclusive underwriting rules per

tier;

(b) the underwriting rules are based on clear, objective criteria that would lead to a logical

distinguishing of potential risk; and

distinction between the expected losses and expenses for each tier.

(2) A rating tier may not be continued if premium, loss, and expense data fail to show a continued

clear distinction between the tiers.

Enacted by Chapter 130, 1999 General Session

31A-19a-215 False or misleading information.

A person or organization may not:

(1) willfully withhold from the commissioner, any rate service organization, or any insurer

information that will affect the rates or premiums chargeable under this chapter; or

(2) knowingly give false or misleading information to the commissioner, any rate service

organization, or any insurer.

Enacted by Chapter 130, 1999 General Session

31A-19a-216 Charging of rates.

An authorized insurer, licensed insurance producer, employee, other representative of an

authorized insurer may not knowingly:

(1) charge or demand a rate or receive a premium that departs from the rates, rating plans,

classifications, schedules, rules, and standards in effect on behalf of the insurer; or

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(2) issue or make any policy or contract involving a violation of Subsection (1).

Amended by Chapter 298, 2003 General Session

31A-19a-217 Grievance procedures.

(1)

(a) An insured affected by a rate may submit a written request for information to the rate service

organization or insurer that made the rate.

(b) The rate service organization or insurer shall answer a request made under Subsection (1)(a)

within 45 calendar days from the date it received the request by furnishing all pertinent rating

information to:

(i) the insured; or

(ii) the insured's authorized representative.

(2)

(a) A person aggrieved by the manner in which a rate service organization or an insurer has

applied its rating system in connection with the insurance afforded to that person may submit

a written request for review to the rate service organization or insurer.

(b) If a request for review is filed under Subsection (2)(a), the rate service organization or insurer

shall provide a reasonable review procedure within Utah.

afforded the person that requested review.

(d) The person that requested review may be heard in person or through an authorized

representative.

(e) If the rate service organization or insurer fails to grant the request for review within 30

calendar days from the date the request is made, the applicant may appeal in writing to the

commissioner.

(f) If an appeal is filed under Subsection (2)(e), the commissioner may order the rate service

organization or insurer to provide the review in accordance with this Subsection (2).

(3) After a review under Subsection (2), the person that requested review may request the

commissioner to confirm that the insurance afforded was rated according to filed rates and

rating plans.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-218 Appeal from filing.

(1)

(a) A person aggrieved by a filing that is in effect may apply to the commissioner in writing for a

hearing.

(b) The application described under Subsection (1)(a) shall:

(i) specify the grounds upon which the applicant intends to rely to establish the grievance; and

(ii) state why the filing does not meet the requirements of law.

(2) On receipt of an application for hearing under Subsection (1), the commissioner shall grant the

requested hearing if the commissioner finds that:

(a) the application was made in good faith;

(b) the grievance is justified, assuming the applicant's grounds can be established; and

(3) A hearing granted under Subsection (2) shall be held:

(a) within 30 calendar days from the date of receipt of the application; and

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(b) not less than 10 days after written notice to:

(i) the applicant;

(ii) each insurer that made the filing; and

(iii) each rate service organization that made the filing.

(4)

(a) If after the hearing the commissioner finds that the filing is defective, the commissioner shall

issue an order:

(i) specifying the respects in which the filing fails to meet the requirements of the law; and

(ii) setting a date after which the filing ceases to be effective.

(b) A copy of the order shall be sent to each party to the dispute.

order.

Renumbered and Amended by Chapter 130, 1999 General Session

Part 3

Rate Service Organizations

31A-19a-301 Operation and control of rate service organizations.

(1)

(a) A rate service organization may not provide any service relating to statistical collection or

the rates of any insurance subject to this chapter unless the organization is licensed under

Section 31A-19a-302.

(b) An insurer may not use the services of the organization for the purposes described in

Subsection (1)(a), unless the organization is licensed under Section 31A-19a-302.

(2) A rate service organization may not refuse to supply any services for which it is licensed in this

state to any insurer:

(a) authorized to do business in this state; and

(b) that offers to pay the fair and usual compensation for the services.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-302 Licensing of rate service organizations.

(1) A rate service organization applying for a license shall include with its application:

(a) a copy of its constitution, charter, articles of organization, agreement, association, or

incorporation, and a copy of its bylaws, plan of operation, and any other rules or regulations

governing the conduct of its business;

(b) a list of its members and subscribers;

affecting it, or orders of the commissioner may be served;

(d) a statement explaining in what capacity it plans to function and showing its technical

qualifications for acting in the capacity for which it seeks a license;

(e) biographical information, as defined by the department, of the officers and directors of the

organization; and

(f) any other relevant information and documents that the commissioner requires.

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(2) A rate service organization that applies for a license under Subsection (1) shall promptly

notify the commissioner of every material change in the facts or in the documents on which its

application was based.

(3)

(a) The commissioner shall issue a license specifying the authorized activity of an applicant, if the

commissioner finds that:

(i) the applicant and the natural persons through whom it acts are competent, trustworthy, and

technically qualified to provide the services proposed; and

(ii) all the requirements of law are met.

(b) The commissioner may not issue a license if the proposed activity would tend to:

(i) create a monopoly; or

(ii) lessen or substantially lessen the competition in any market.

(4)

(a) Any license issued under this chapter shall be subject to annual renewal.

(b) A fee shall be charged for the initial license and for renewal. The fee shall be set by the

Legislature under Section 31A-3-103.

(5) Any amendment to a document filed under Subsection (1)(a) shall be filed within at least

30 calendar days after the day the document becomes effective. Failure to comply with this

Subsection (5) is a ground for revocation of the license granted under Subsection (3).

(6) The license of each rate service organization licensed under former Title 31, Chapter 18, is

continued under this chapter.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-303 Termination of license.

(1) A license issued under this chapter remains in force until:

(a) revoked, suspended, or limited under Subsection (2);

(b) lapsed under Subsection (3); or

(2)

(a) After a hearing, the commissioner may revoke, suspend, or limit in whole or in part, the

license of any person licensed under this part, if:

(i) the licensee is found to be unqualified;

(ii) the licensee is found to have violated:

(A) an insurance statute;

(B) a valid rule under Subsection 31A-2-201(3); or

(iii) the licensee's methods and practices in the conduct of business endanger the legitimate

interests of policyholders, insurers, or the public.

(b) An order suspending a license issued under this chapter shall specify the period of

suspension, but in no event may the suspension period exceed 12 months.

(3)

(a) Any license issued under this chapter shall lapse if the licensee fails to pay a fee when due.

(b) A license that lapses under this Subsection (3) may be reinstated if the licensee, within 90

calendar days from the day the license lapsed, pays twice the usual license renewal fee.

(4) A licensee whose license is suspended or revoked, but who continues to act as a licensee is

subject to the penalties applicable to violating Subsection 31A-19a-301(1).

(5)

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(a) An order revoking a license under Subsection (2) may specify a time, not to exceed five

years, within which the former licensee may not apply for a new license.

(b) If under Subsection (5)(a) no time is specified, the former licensee may not apply for five

years, without the express approval of the commissioner.

(6)

(a) Any person whose license is suspended or revoked shall, when the suspension ends or a

new license is issued, pay all fees that would have been payable if the license had not been

suspended or revoked, unless the commissioner, by order, waives the payment of the interim

fees.

(b) If a new license is issued more than three years after the revocation of a similar license,

Subsection (6)(a) applies only to the fees that would have accrued during the three years

immediately following the revocation.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-304 Probation.

(1)

(a) In any circumstances that would justify a suspension under Section 31A-19a-303, instead

of a suspension, the commissioner may, after a hearing, put the licensee on probation for a

specified period not to exceed 12 months from the date of probation.

(b) The probation order shall state the conditions for retention of the license, which shall be

reasonable.

(2) Violation of the probation constitutes grounds for revocation pursuant to a proceeding

authorized under Title 63G, Chapter 4, Administrative Procedures Act.

Amended by Chapter 382, 2008 General Session

31A-19a-305 Anti-competitive agreements prohibited.

(1)

(a) An insurer may not assume any obligation to any person other than a policyholder or other

company under common control, to use or adhere to certain rates or rating procedures.

(b) Except for a policyholder or other company under common control, a person may not impose

any penalty or other adverse consequence for failure of an insurer to adhere to certain rates

or rating procedures.

(2) This section does not apply to rates used:

(a) by a joint underwriting group;

(b) by a pool;

(d) by a residual market mechanism.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-306 Insurers and rate service organizations -- Prohibited activity.

(1) An insurer or rate service organization may not:

(a) attempt to monopolize, or combine or conspire with any other person to monopolize an

insurance market; or

(b) engage in a boycott of an insurance market on a concerted basis.

(2)

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(a) Except as provided in Subsection (2)(c), an insurer may not agree with any other insurer or

with a rate service organization to mandate adherence to or to mandate use of any:

(i) rate;

(ii) prospective loss cost;

(iii) rating plan;

(iv) rating schedule;

(v) rating rule;

(vi) policy or bond form;

(vii) rate classification;

(viii) rate territory;

(ix) underwriting rule;

(x) survey;

(xi) inspection; or

(xii) material similar to those described in Subsections (2)(a)(i) through (xi).

(b) The fact that two or more insurers, whether or not members or subscribers of a rate service

organization, use consistently or intermittently the same materials described in Subsection (2)

(a) is not sufficient in itself to support a finding that an agreement exists.

(i) to the extent needed to facilitate the reporting of statistics to:

(A) a rate service organization;

(B) a statistical agent; or

(ii) as provided in Part 4, Workers' Compensation Rates.

(3) Two or more insurers having a common ownership or operating in this state under common

management or control may act in concert between or among themselves with respect to any

matters pertaining to those activities authorized in this section as if they constituted a single

insurer.

(4) An insurer or rate service organization may not make any arrangement with any other insurer,

rate service organization, or other person that has the purpose or effect of unreasonably

restraining trade or unreasonably lessening competition in the business of insurance.

Enacted by Chapter 130, 1999 General Session

31A-19a-307 Rate service organizations -- Permitted activity.

A rate service organization may on behalf of its members and subscribers:

(1) develop statistical plans including territorial and class definitions;

(2) collect statistical data from:

(a) members;

(b) subscribers; or

(3) prepare, file, and distribute prospective loss costs which may include provisions for special

assessments;

(4) prepare, file, and distribute:

(a) factors;

(b) calculations;

(d) territory, increased limits, and other variables;

(5) prepare, file, and distribute supplementary rating information;

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(6) distribute information that is required or directed to be filed with the commissioner;

(7) conduct research and on-site inspections to prepare classifications of public fire defenses;

(8) consult with public officials regarding public fire protection as it would affect members,

subscribers, and others;

(9) conduct research and onsight inspections to discover, identify, and classify information relating

to causes or prevention of losses;

(10) conduct research relating to the impact of statutory changes upon prospective loss costs;

(11) prepare, file, and distribute policy forms and endorsements;

(12) consult with members, subscribers, and others concerning use and application of the policy

forms and endorsements described in Subsection (11);

(13) conduct research and on-site inspections for the purpose of providing risk information relating

to individual structures;

(14) conduct on-site inspections to determine rating classifications for individual insureds;

(15) collect, compile, and publish past and current prices of individual insurers, provided the

information is also made available to the general public at a reasonable cost;

(16) collect and compile exposure and loss experience for the purpose of individual risk experience

ratings;

(17) furnish any other services, as approved or directed by the commissioner, related to those

enumerated in this section; and

(18) engage in any other activity not prohibited by this title.

Enacted by Chapter 130, 1999 General Session

31A-19a-308 Rate service organizations -- Filing requirements.

(1) A rate service organization shall file with the commissioner any of the following that is used in

this state:

(a) any statistical plan;

(b) all prospective loss costs;

(d) all supplementary rating information; and

(e) any change, amendment, or modification of an item described in Subsections (1)(a) through

(d).

(2) The filings required under Subsection (1) shall be subject to Sections 31A-19a-203 and

31A-19a-206 and other provisions of this chapter relating to filings made by insurers.

Enacted by Chapter 130, 1999 General Session

31A-19a-309 Recording and reporting of experience.

(1)

(a) The commissioner may adopt rules for the development of statistical plans, for use by all

insurers in recording and reporting their loss and expense experience, in order that the

experience of those insurers may be made available to the commissioner.

(b) The rules provided for in Subsection (1) may include:

(i) the data that shall be reported by an insurer;

(ii) definitions of data elements;

(iii) the timing and frequency of data reporting by an insurer;

(iv) data quality standards;

(v) data edit and audit requirements;

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(vi) data retention requirements;

(vii) reports to be generated; and

(viii) the timing of reports to be generated.

be required to record or report its experience on a classification basis that is inconsistent with

its own rating system.

(2)

(a) The commissioner may designate one or more rate service organizations to assist the

commissioner in gathering that experience and making compilations of the experience.

(b) The compilations developed under Subsection (2)(a) shall be made available to the public.

(3) The commissioner may make rules and plans for the interchange of data necessary for the

application of rating plans.

(4) To further uniform administration of rate regulatory laws, the commissioner and every insurer

and rate service organization may:

(a) exchange information and experience data with insurance supervisory officials, insurers, and

rate service organizations in other states; and

(b) consult with the persons described in Subsection (4)(a) with respect to the application of

rating systems and the reporting of statistical data.

Amended by Chapter 297, 2011 General Session

Part 4

Workers' Compensation Rates

31A-19a-401 Scope of part.

(1) This part applies to workers' compensation insurance and employers' liability insurance written

in connection with workers' compensation insurance.

(2) An insurer writing workers' compensation coverage is subject to this part.

Amended by Chapter 363, 2017 General Session

31A-19a-402 Purpose.

It is the purpose of this part to:

(1) establish specific provisions for the filing of workers' compensation rates in addition to those

provided in Part 2, General Rate Regulation;

(2) provide for review by the department of workers' compensation rate-making and the results of

it; and

(3) provide for a designated rate service organization to perform certain functions on behalf of the

commissioner.

Renumbered and Amended by Chapter 130, 1999 General Session

31A-19a-403 Definitions.

As used in this part:

(1) "Uniform classification plan," in addition to the definition of "classification system" in Section

31A-19a-102, means a plan:

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(a) that is consistent between all insurers of classification codes and descriptions; and

(b) by which like workers' compensation exposures are grouped for the purposes of underwriting,

rating, and statistical reporting.

(2) "Uniform experience rating plan" means a plan that is consistent between all insurers for

experience rating entities insured for workers' compensation insurance.

(3) "Uniform statistical plan" means a plan that is consistent between all insurers that is used for

the reporting of workers' compensation insurance statistical data.

Amended by Chapter 90, 2004 General Session

31A-19a-404 Designated rate service organization.

(1) For purposes of workers' compensation insurance, the commissioner shall designate one rate

service organization to:

(a) develop and administer the uniform statistical plan, uniform classification plan, and uniform

experience rating plan filed with and approved by the commissioner;

(b) assist the commissioner in gathering, compiling, and reporting relevant statistical information

on an aggregate basis;

reasonably related to the recording and reporting of data pursuant to the uniform statistical

plan, uniform experience rating plan, and the uniform classification plan; and

(d) develop and file the advisory loss costs pursuant to Section 31A-19a-406.

(2) The uniform experience rating plan shall:

(a) contain reasonable eligibility standards;

(b) provide adequate incentives for loss prevention; and

(3) Each workers' compensation insurer, directly or through its selected rate service organization,

shall:

(a) record and report its workers' compensation experience to the designated rate service

organization as set forth in the uniform statistical plan approved by the commissioner; and

(b) adhere to a uniform classification plan and uniform experience rating plan filed with the

commissioner by the rate service organization designated by the commissioner.

(4) The commissioner may adopt rules for:

(a) the development and administration by the designated rate service organization of the:

(i) uniform statistical plan;

(ii) uniform experience rating plan; and

(iii) uniform classification plan;

(b) the recording and reporting of statistical data and experience rating data by the various

insurers writing workers' compensation insurance;

(d) providing for the equitable sharing and recovery of the expense of the designated rate service

organization to develop, maintain, and provide the plans, services, and filings that are used by

the various insurers writing workers' compensation insurance.

(5)

(a) Notwithstanding Subsection (3), an insurer may develop directly or through its selected rate

service organization subclassifications of the uniform classification system upon which a rate

may be made.

(b) A subclassification shall be filed with the commissioner 30 days before its use.

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the data produced by the subclassifications can be reported consistently with the uniform

statistical plan and uniform classification plan.

(6) Notwithstanding Subsection (3), an insurer may, directly or though its selected rate service

organization, develop its own experience modifications based on the uniform statistical plan,

uniform classification plan, and uniform rating plan filed by the rate service organization

designated by the commissioner under Subsection (1).

Amended by Chapter 32, 2020 General Session

31A-19a-405 Filing of rates and other rating information.

(1)

(a) All workers' compensation rates, supplementary rate information, and supporting information

shall be filed at least 30 days before the effective date of the rate or information.

(b) Notwithstanding Subsection (1)(a), on application by the filer, the commissioner may

authorize an earlier effective date.

(2) The loss and loss adjustment expense factors included in the rates filed under Subsection (1)

shall be:

(a) the advisory loss costs filed by the designated rate service organization under Section

31A-19a-406; or

(b) a percent modification of the advisory loss costs filed by the designated rate service

organization under Section 31A-19a-406.

(3) A modification filed under Subsection (2)(b) shall be accompanied by adequate support as

required by Part 2, General Rate Regulation.

Amended by Chapter 32, 2020 General Session

31A-19a-406 Filing requirements for designated rate service organization.

(1) The rate service organization designated under Section 31A-19a-404 shall file with the

commissioner the following items proposed for use in this state at least 30 calendar days before

the day on which the items are distributed to members, subscribers, or others:

(a) each advisory loss cost with its supporting information;

(b) the uniform classification plan and rating manual;

(d) the uniform statistical plan manual; and

(e) each change, amendment, or modification of any of the items listed in Subsections (1)(a)

through (d).

(2)

(a) If the commissioner believes that advisory loss costs filed violate the excessive, inadequate,

or unfair discriminatory standard in Section 31A-19a-201 or any other applicable requirement

of this part, the commissioner may require that the rate service organization file additional

supporting information.

(b) If, after reviewing the supporting information, the commissioner determines that the advisory

loss costs violate these requirements, the commissioner may:

(i) require that adjustments to the advisory loss costs be made; or

(ii) call a hearing for any purpose regarding the filing.

Amended by Chapter 32, 2020 General Session

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31A-19a-407 Cooperation among rating organizations and insurers

(1) Notwithstanding Section 31A-19a-305, rate service organizations and insurers may cooperate

with each other in rate-making or in other matters within the scope of this part.

(2)

(a) The commissioner may review the cooperative activities and practices permitted under

Subsection (1).

(b) If, after a hearing, the commissioner finds any of the cooperative activities or practices

permitted under Subsection (1) to be unfair, unreasonable, or otherwise inconsistent with the

law, the commissioner may issue an order:

(i) specifying in what respects the activity or practice is unfair, unreasonable, or otherwise

inconsistent with the law; and

(ii) requiring the persons or entities involved to discontinue the activity or practice.

Enacted by Chapter 130, 1999 General Session

31A-19a-408 Procedures for workers' compensation tiered rate filings.

(1) Notwithstanding Section 31A-19a-214 and subject to the other provisions of this section,

a workers' compensation insurer may file with the commissioner a rate filing for workers'

compensation insurance that provides for a plan with more than one rate tier for a single insurer

or an insurer group with common ownership if the filing shows that:

(a) each tier is established on underwriting rules that are based on criteria that would lead to a

logical distinguishing of potential risk; and

(b) supporting actuarial analysis or other information that shows a clear distinction between the

following for each tier:

(i) expected losses and expenses; and

(ii) actual losses and expenses.

(2) A workers' compensation insurer shall file with the commissioner an update of the actuarial

analysis or other information required under Subsection (1)(b) at least every three years.

(3) A workers' compensation insurer may apply underwriting expertise and judgment in the tier

placement process, except that underwriting expertise and judgment shall:

(a) be applied in a prudent manner; and

(b) when applied, be fair, reasonable, and fully documented.

Enacted by Chapter 242, 2011 General Session

Chapter 20

Underwriting Restrictions

31A-20-101 Underwriting limitations.

No insurer may insure or attempt to insure against:

(1) a wager or gaming risk;

(2) loss of an election;

(3) the penal consequences of a crime; or

(4) punitive damages.

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Amended by Chapter 204, 1986 General Session

31A-20-102 Joint underwriting.

(1) Every group, association, or other organization of insurers that engages in joint underwriting or

joint reinsurance shall file with the commissioner:

(a) a copy of its constitution, articles of incorporation, or agreement of association, and its bylaws

or rules governing its activities, all certified by the custodian of the originals;

(b) a list of its members; and

(2) Every group, association, or other organization shall promptly notify the commissioner of every

change in its constitution, articles of incorporation, agreement of association, bylaws, rules, its

list of members, and its resident process agent.

(3)

(a) If all members of a group of insurers under this section are authorized to do business in

Utah, the business done by the group shall be allocated for regulatory purposes to individual

members of the group.

(b) The group itself is subject only to:

(i) Chapter 1, General Provisions;

(ii) Chapter 2, Administration of the Insurance Laws;

(iii) Chapter 4, Insurers in General;

(iv) Chapter 20, Underwriting Restrictions;

(v) Chapter 21, Insurance Contracts in General;

(vi) Chapter 22, Contracts in Specific Lines;

(vii) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance

Intermediaries; and

(viii) Chapter 26, Insurance Adjusters.

authorization to do business under Chapter 14, Foreign Insurers, and is subject to regulation

under that chapter.

Amended by Chapter 340, 2011 General Session

31A-20-103 Classifications of insurance.

The commissioner may by rule define lines and classes of insurance which are not already

defined under Section 31A-1-301. These definitions may be used for any purposes within the

commissioner's regulatory power, including:

(1) providing instructions for reports and replies under Section 31A-2-202;

(2) controlling combinations of lines or classes of insurance; and

(3) determining which rules under Chapter 22, Contracts in Specific Lines, are applicable.

Amended by Chapter 91, 1987 General Session

31A-20-104 Combinations of policies.

Except as otherwise provided in this chapter, the commissioner may by rule establish standards

for the combination of different coverages in policies and may specify whether premiums shall be

separately stated for each.

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Enacted by Chapter 242, 1985 General Session

31A-20-105 Indemnity agreements for surety corporation.

In assessing the financial condition of a surety insurer and its underwriting capacity and limits,

the commissioner shall take into account the existence of a systematic underwriting practice of

indemnity or security arrangements under Section 31A-22-104.

Enacted by Chapter 242, 1985 General Session

31A-20-106 Variable contracts.

(1)

(a) An insurer may not deliver or issue for delivery within this state an insurance policy that

provides a life or annuity benefit in a variable amount until the insurer:

(i) is licensed to do a life insurance or annuity business in this state; and

(ii) satisfies the commissioner that the insurer's condition and methods of operation in

connection with those types of insurance policies do not render the insurer's operation

hazardous to the public or its policyholders in this state.

(b) Notwithstanding any other provision of law, the commissioner has sole authority to:

(i) regulate the issuance and sale of a variable contract; and

(ii) make rules necessary and appropriate to carry out this chapter in relation to a variable

contract.

(2) In determining the qualification of an insurer requesting authority to deliver an insurance policy

described in Subsection (1) in this state, the commissioner shall consider:

(a) the history and financial condition of the insurer;

(b) the character, responsibility, and general fitness of the insurer's officers and directors; and

the jurisdiction in which its head office is located provides protection to policyholders and the

public substantially equal to that provided by this title and the rules issued under this title.

(3) If an insurer is a subsidiary of an admitted life insurer, or affiliated with an admitted life insurer

through common management or ownership, the commissioner may consider the insurer to

have met the requirements of this section if:

(a) the insurer meets the requirements of this section; or

(b) the parent or the affiliated insurer meets the requirements of this section.

(4) This title applies to a separate account or a contract relating to the separate account, except:

(a) Sections 31A-22-402, 31A-22-407, and 31A-22-409, in the case of a variable annuity policy;

(b) Sections 31A-22-402, 31A-22-407, and 31A-22-408, in the case of a variable life insurance

policy; and

Amended by Chapter 10, 2010 General Session

31A-20-107 Reinsurance.

(1)

(a) An authorized insurer writing a nonassessable policy may assume as a reinsurer a risk it may

write directly.

(b) Subject to Chapter 5, Domestic Stock and Mutual Insurance Corporations, Chapter 6a,

Service Contracts, Chapter 6b, Guaranteed Asset Protection Waiver Act, Chapter 7, Nonprofit

Health Service Insurance Corporations, Chapter 8, Health Maintenance Organizations

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and Limited Health Plans, Chapter 8a, Health Discount Program Consumer Protection

Act, Chapter 9, Insurance Fraternals, Chapter 10, Annuities, Chapter 11, Motor Clubs,

Chapter 12, State Risk Management Fund, Chapter 14, Foreign Insurers, and Chapter 17,

Determination of Financial Condition, and to any limitation imposed on a foreign insurer by the

law of its domicile, the commissioner may also authorize an insurer to assume, as a reinsurer,

one or more designated classes of risks it is not authorized to write directly.

(2)

(a) Subject to Section 31A-5-508, an authorized insurer may cede or retrocede to:

(i) an insurer authorized to assume it under Subsection (1) a liability it has undertaken on a risk

lawfully written under its certificate of authority; and

(ii) an authorized agency of the federal government or of this state.

(b) An authorized insurer may cede or retrocede reinsurance to an unauthorized insurer subject

to:

(i) Sections 31A-17-404 and 31A-17-404.1;

(ii) a rule made by the commissioner under a section listed in Subsection (2)(b)(i); and

(iii) Subsection (3).

(3) A person may not knowingly cede reinsurance or permit or assist it to be ceded to a reinsurer

not in sound financial condition. If a reinsurer satisfies one or more of the security factors under

Section 31A-17-404.1, there is a rebuttable presumption that the reinsurer is in sound financial

condition.

(4)

(a) An authorized reinsurer who knowingly assumes from an unauthorized insurer, a risk that

may lawfully be written only by an authorized insurer, shall immediately report the facts of the

transaction to the commissioner.

(b)

(i) Subject to Subsection (4)(b)(ii), an assuming reinsurer described in Subsection (4)(a):

(A) is liable for all taxes and penalties applicable under Sections 31A-3-301, 31A-3-302, and

31A-3-303; and

(B) may take credit for the payment of a tax or penalty lapse under Subsection (4)(b)(i) in its

settlement of accounts with the unauthorized ceding insurer.

(ii) This Subsection (4)(b) does not apply if the assuming reinsurer's agreement with the ceding

insurer takes the taxes described in Subsection (4)(b)(i) into account.

(5)

(a) Except as provided under Subsection (5)(b), an authorized reinsurer proposing to withdraw

from writing a class of its business in Utah, except by nonrenewal of an existing contract at its

expiration, shall give the commissioner 60 days written notice of its intention. The authorized

reinsurer may not withdraw until after those 60 days lapse.

(b) This Subsection (5) does not apply if the withdrawing reinsurer writes an insignificant market

share of that class of business in Utah. The commissioner shall define "insignificant market

share" by rule.

Amended by Chapter 257, 2008 General Session

31A-20-108 Single risk limitation.

(1) This section applies to all lines of insurance, including ocean marine and reinsurance, except:

(a) title insurance;

(b) workers' compensation insurance;

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(d) employers' liability insurance; and

(e) health insurance.

(2)

(a) Except as provided under Subsections (3) and (4) and under Section 31A-20-109, an insurer

authorized to do an insurance business in Utah may not expose itself to loss on a single risk

in an amount exceeding 10% of its capital and surplus.

(b) The commissioner may adopt rules to calculate surplus under this section.

reserve credit under Sections 31A-17-404 through 31A-17-404.4 in determining the limitation

of risk under this section.

(3)

(a) The commissioner may adopt rules, after hearings held with notice as required by law, to

specify the maximum exposure to which an assessable mutual may subject itself.

(b) The rules described in Subsection (3)(a) may provide for classifications of insurance and

insurers to preserve the solidity of insurers.

(4) As used in this section, a "single risk" includes all losses reasonably expected as a result of the

same event.

(5) A company transacting fidelity or surety insurance may expose itself to a risk or hazard in

excess of the amount prescribed in Subsection (2), if the commissioner, after considering all the

facts and circumstances, approves the risk.

Amended by Chapter 120, 2024 General Session

31A-20-109 Single risk limitation for title insurance.

(1) As used in this section:

(a) "Net retained liability" means the total potential liability retained by a title insurer for a

single risk, after deducting liability reinsured for which credit may be taken under Section

31A-17-404.

(b) "Single risk" means the sum of the potential liabilities under all title insurance policies issued

on any estates in the same real property.

(2) The net retained liability of a title insurer for a single risk, whether assumed directly or as

reinsurance, may not exceed 50% of the capital and surplus of the insurer.

Enacted by Chapter 242, 1985 General Session

31A-20-110 Underwriting rules for title insurance.

(1) A title insurance policy may not be written until the title insurer or its individual title insurance

producer or agency title insurance producer has conducted a reasonable examination of the

title and has made a determination of insurability of title under sound underwriting principles.

Evidence of this examination and reasonable determination shall be retained in the files of the

title insurer or its individual title insurance producer or agency title insurance producer for not

less than 15 years after the policy has been issued, either in its original form or as recorded by

any process which can accurately and reliably reproduce the original. This section does not

apply to a company assuming liability through a contract of reinsurance, or to a company acting

as coinsurer, if another coinsuring company has complied with this section.

(2) A title insurance policy may not be issued except by a title insurer, an individual title insurance

producer who is appointed by an insurer, or agency title insurance producer licensed under

Section 31A-23a-105.

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(3) This section is enforceable only by the commissioner. It does not create, eliminate, or modify

any private cause of action or remedy.

Amended by Chapter 330, 2015 General Session

Chapter 21

Insurance Contracts in General

Part 1

General Rules

31A-21-101 Scope of Chapters 21 and 22.

(1) Except as provided in Subsections (2) through (6), this chapter and Chapter 22, Contracts in

Specific Lines, apply to all insurance policies, applications, and certificates:

(a) delivered or issued for delivery in this state;

(b) on property ordinarily located in this state;

(d) on business operations in this state.

(2) This chapter and Chapter 22, Contracts in Specific Lines, do not apply to:

(a) an exemption provided in Section 31A-1-103;

(b) an insurance policy procured under Sections 31A-15-103 and 31A-15-104;

(i) if:

(A) the contract is negotiated primarily outside this state; and

(B) the operations in this state are incidental or subordinate to operations outside this state;

and

(ii) except that insurance required by a Utah statute shall conform to the statutory requirements;

(d) other exemptions provided in this title.

(3)

(a) Sections 31A-21-102, 31A-21-103, 31A-21-104, Subsections 31A-21-107(1) and (3), and

Sections 31A-21-306, 31A-21-308, 31A-21-312, and 31A-21-314 apply to ocean marine and

inland marine insurance.

(b) Section 31A-21-201 applies to inland marine insurance that is written according to manual

rules or rating plans.

Contracts in Specific Lines.

(4) A group insurance policy or a blanket insurance policy is subject to this chapter and Chapter

22, Contracts in Specific Lines, except:

(a) a group insurance policy outside the scope of this title under Subsection 31A-1-103(3)(h);

(b) a blanket insurance policy outside the scope of this title under Subsection 31A-1-103(3)(h);

and

(5) The commissioner may by rule exempt any class of insurance contract or class of insurer from

any or all of the provisions of this chapter and Chapter 22, Contracts in Specific Lines, if the

interests of the Utah insureds, creditors, or the public would not be harmed by the exemption.

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(6) Workers' compensation insurance is subject to this chapter and Chapter 22, Contracts in

Specific Lines.

(7) Unless clearly inapplicable, any provision of this chapter or Chapter 22, Contracts in Specific

Lines, applicable to either a policy or a contract is applicable to both.

Amended by Chapter 252, 2021 General Session

31A-21-102 Oral contracts of insurance and binders.

(1) "Binder" means a writing which describes the subject and amount of insurance and temporarily

binds insurance coverage pending the issuance of an insurance policy. "Binder" does not

include conditional receipts by life insurance companies under which issuance of the policy or

coverage under the policy is contingent upon the acceptability of the risk to the insurer.

(2) Binding oral contracts of insurance may only be made as to casualty insurance, liability

insurance, property insurance, vehicle liability insurance, workers' compensation insurance,

and as to combinations of these coverages. The insurer shall issue a policy or binder as soon

as reasonably possible after negotiation of any oral contract under this subsection.

(3) No binder is valid beyond the issuance of the policy as to which the binder was given, or

beyond 150 days from the binder's effective date, whichever occurs first.

(4) If a policy has not been issued as to a binder, the binder may be extended or renewed beyond

150 days, but only upon the commissioner's written approval, or under rules adopted by the

commissioner.

(5) A binder may be cancelled by the insurer prior to its expiration date only in the same manner as

and subject to the same restrictions that apply to insurance policies under Section 31A-21-303.

Amended by Chapter 261, 1989 General Session

31A-21-103 Capacity to contract.

Any person 16 years of age or older who is otherwise competent to contract under Utah law,

and who is not subject to any legal disability, may contract for insurance. If there is a conservator

appointed under Title 75, Utah Uniform Probate Code, the conservator, rather than the person

whose property is subject to the conservatorship, may contract for insurance to protect the property

under conservatorship. In the case of a conservatorship over the person or property of a person

under 16 years of age, the conservator may invest funds of the estate in life or accident and health

insurance or annuity contracts, but only with the approval of the court having jurisdiction over the

conservatorship.

Amended by Chapter 116, 2001 General Session

31A-21-104 Insurable interest and consent -- Scope.

(1) As used in this chapter:

(a) For purposes of this section, "exchange" means an exchange made pursuant to Section

1035, Internal Revenue Code, as may be amended.

(b) "Insurable interest" in a person means the following, including a circumstance described in

Subsection (3):

(i) for a person closely related by blood or by law, a substantial interest engendered by love and

affection; or

(ii) in the case of a person not described in Subsection (1)(b)(i), a lawful and substantial interest

in having the life, health, and bodily safety of the person insured continue.

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in the nonoccurrence of the event insured against.

(d) "Life settlement" is as defined in Section 31A-36-102.

(2)

(a) An insurer may not knowingly provide insurance to a person who does not have or expect to

have an insurable interest in the subject of the insurance.

(b) A person may not knowingly procure, directly, by assignment, or otherwise, an interest in

the proceeds of an insurance policy unless that person has or expects to have an insurable

interest in the subject of the insurance.

(i) are satisfied if the requirements are met:

(A) at the effective date of the insurance policy; and

(B) at the time of a later procurement, if any, of an interest in the proceeds of an insurance

policy; and

(ii) do not need to be met at the time that proceeds of an insurance policy are payable if the

requirements are met at the times specified in Subsection (2)(c)(i).

(d) Except as provided in Subsections (7) and (8), insurance provided in violation of this

Subsection (2) is subject to Subsection (6).

(e) A policy holder in a group insurance policy does not need an insurable interest if a certificate

holder or a person other than the group policyholder who is specified by the certificate holder

is the recipient of the proceeds of the group insurance policy.

(3) The following is a nonexhaustive list of insurable interests:

(a) A person has an unlimited insurable interest in that person's own life and health.

(b) A shareholder, member, or partner has an insurable interest in the life of another shareholder,

member, or partner for purposes of an insurance contract that is an integral part of a

legitimate buy-sell agreement respecting shares, membership interests, or partnership

interests in the business.

(c)

(i) A trust has an insurable interest in the subject of the insurance to the extent that all

beneficiaries of the trust have an insurable interest.

(ii) A trust violates this section if the trust:

(A) is created to give the appearance of an insurable interest, but an insurable interest does

not exist; and

(B) is used to initiate a policy for an investor or other person who has no insurable interest in

the insured.

(d)

(i) Subject to Subsection (3)(d)(v), an employer or an employer sponsored trust:

(A) has an insurable interest in the lives of the employer's:

(I) directors;

(II) officers;

(III) managers;

(IV) nonmanagement employees; and

(V) retired employees; and

(B) may insure a life listed in Subsection (3)(d)(i)(A):

(I) on an individual or group basis; and

(II) with the written consent of the insured.

(ii)

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(A) A trustee of a trust established by an employer for the sole benefit of the employer has the

same insurable interest in the life and health of any person as does the employer.

(B) Without limiting the general principle in Subsection (3)(d)(ii)(A), a trustee of a trust

established by an employer that provides life, health, disability, retirement, or similar

benefits to an individual identified in Subsection (3)(d)(i)(A) has an insurable interest in

the life of the individual described in Subsection (3)(d)(i)(A) for whom the benefits are

provided.

(iii)

(A) For the purpose of exchanging life insurance, an individual described in Subsection (3)(d)

(i)(A) includes an individual who was formerly included under Subsection (3)(d)(i)(A) if the

life insurance to be exchanged:

(I) is purchased or acquired while the individual is a current director, officer, manager, or

employee; and

(II) is exchanged for life insurance in an amount that does not exceed the amount of the

insurance being exchanged.

(B) Written consent of an individual described in this Subsection (3)(d)(iii) is not required at

the time of the exchange of the life insurance.

(c).

(iv)

(A) If an employer or trustee establishes an insurable interest as provided in this Subsection

(3)(d) and all of the employer's business is acquired, purchased, merged into, or otherwise

transferred to a subsequent employer, the insurable interest of the original employer or

trustee in an individual described in Subsection (3)(d)(i)(A) is automatically transferred to:

(I) the subsequent employer; or

(II) the trustee of a trust established by the subsequent employer for the subsequent

employer's sole benefit.

(B) A subsequent employer or a trustee of a trust described in Subsection (3)(d)(iv)(A)(II)

may exchange life insurance that is purchased or acquired in an individual described

in Subsection (3)(d)(i)(A) by the original employer or trustee without establishing a new

insurable interest at the time of the exchange of the insurance.

(v) The extent of an employer's or employer sponsored trust's insurable interest for a

nonmanagement or retired employee under Subsection (3)(d)(i) is limited to an amount

commensurate with the employer's unfunded liabilities at the time insurance on the

nonmanagement or retired employee is procured.

(4)

(a) Except as provided in Subsection (5), an insurer may not knowingly issue an individual life or

accident and health insurance policy to a person other than the one whose life or health is at

risk unless that person:

(i) is 18 years of age or older;

(ii) is not under guardianship under Title 75, Chapter 5, Protection of Persons Under Disability

and Their Property; and

(iii) gives written consent to the issuance of the policy.

(b) A person shall express consent:

(i) by signing an application for the insurance with knowledge of the nature of the document; or

(ii) in any other reasonable way.

(5)

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(a) A life or accident and health insurance policy may be taken out without consent in a

circumstance described in this Subsection (5)(a).

(i) A person may obtain insurance on a dependent who does not have legal capacity.

(ii) A creditor may, at the creditor's expense, obtain insurance on the debtor in an amount

reasonably related to the amount of the debt.

(iii) A person may obtain life and accident and health insurance on an immediate family

member who is living with or dependent on the person.

(iv) A person may obtain an accident and health insurance policy on others that would merely

indemnify the policyholder against expenses the person would be legally or morally

obligated to pay.

(v) The commissioner may adopt rules permitting issuance of insurance for a limited term on

the life or health of a person serving outside the continental United States who is in the

public service of the United States, if the policyholder is related within the second degree by

blood or by marriage to the person whose life or health is insured.

(b) Consent may be given by another in a circumstance described in this Subsection (5)(b).

(i) A parent, a person having legal custody of a minor, or a guardian of a person under Title 75,

Chapter 5, Protection of Persons Under Disability and Their Property, may consent to the

issuance of a policy on a dependent child or on a person under guardianship under Title 75,

Chapter 5, Protection of Persons Under Disability and Their Property.

(ii) A grandparent may consent to the issuance of life or accident and health insurance on a

grandchild.

(iii) A court of general jurisdiction may give consent to the issuance of a life or accident and

health insurance policy on an ex parte application showing facts the court considers

sufficient to justify the issuance of that insurance.

(6)

(a) An insurance policy is not invalid because:

(i) the insurance policy is issued or procured in violation of Subsection (2); or

(ii) consent has not been given.

(b) Notwithstanding Subsection (6)(a), a court with appropriate jurisdiction may:

(i) order the proceeds to be paid to some person who is equitably entitled to the proceeds, other

than the one to whom the policy is designated to be payable; or

(ii) create a constructive trust in the proceeds or a part of the proceeds on behalf of a person

who is equitably entitled to the proceeds, subject to all the valid terms and conditions of the

policy other than those relating to insurable interest or consent.

(7) This section does not prevent an organization described under Section 501(c)(3), (e), or

(f), Internal Revenue Code, as amended, and the regulations made under this section, and

which is regulated under Title 13, Chapter 22, Charitable Solicitations Act, from soliciting and

procuring, by assignment or designation as beneficiary, a gift or assignment of an interest in life

insurance on the life of the donor or assignor or from enforcing payment of proceeds from that

interest.

(8)

(a) Subsection (8)(b) applies if:

(i) an insurance policy is transferred pursuant to a life settlement in accordance with Chapter

36, Life Settlements Act; and

(ii) before the transfer described in Subsection (8)(a)(i) the insurable interest requirements of

Subsection (2)(c)(i) are met for the insurance policy.

(b) An insurance policy described in Subsection (8)(a) is not subject to Subsection (6)(b) and

nothing in this section prevents:

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(i) an owner of life insurance, whether or not the owner is also the subject of the insurance,

from entering into a life settlement;

(ii) a life settlement producer from soliciting a person to enter into a life settlement;

(iii) a person from enforcing payment of proceeds from the interest obtained under a life

settlement; or

(iv) the execution:

(A) of any of the following with respect to the death benefit or ownership of any portion of a

settled policy as provided for in Section 31A-36-109:

(I) an assignment;

(II) a sale;

(III) a transfer;

(IV) a devise; or

(V) a bequest; and

(B) by any of the following:

(I) a life settlement provider;

(II) a life settlement purchaser;

(III) a financing entity;

(IV) a related provider trust;

(V) a special purpose entity;

(VI) a qualified institutional buyer as defined in Rule 144A, 17 C.F.R. Sec. 230.144A; or

(VII) an accredited investor as defined in Regulation D, Rule 501, 17 C.F.R. Sec. 230.501.

(9)

(a) The insurable interests described in this section:

(i) are not exclusive;

(ii) are cumulative of an insurable interest that is not expressly included in this section but exists

in common law; and

(iii) are not in lieu of an insurable interest that is not expressly included in this section but exists

in common law.

(b) The inclusion of an insurable interest in this section may not be considered to be excluding

another insurable interest that is similar to the insurable interest included in this section.

(c)

(i) The recognition of an insurable interest in this section by Chapter 89, Laws of Utah 2007,

does not imply or create a presumption that the insurable interest did not exist before April

30, 2007.

(ii) An insurable interest shall be presumed with respect to a life insurance policy issued before

April 30, 2007 to a person whose insurable interest is recognized in this section by Chapter

89, Laws of Utah 2007.

Amended by Chapter 355, 2009 General Session

31A-21-105 Representations, warranties, and conditions.

(1)

(a) No statement, representation, or warranty made by any person representing the insurer in the

negotiation for an individual or franchise insurance contract affects the insurer's obligations

under the policy unless it is stated in the policy or in a written application signed by the

applicant. No person, except the applicant or another by his written consent, may alter the

application, except for administrative purposes in a way which is clearly not ascribable to the

applicant.

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(b) No statement, representation, or warranty made by or on behalf of a particular certificate

holder under a group policy affects the insurer's obligations under the certificate unless it is

stated in the certificate or in a written document signed by the certificate holder, and a copy of

it is supplied to the certificate holder.

insurance, and any person whose life or health is insured under a policy may request, in

writing, from the company a copy of the application, if he did not receive the policy or a copy

of it, or if the policy has been reinstated or renewed without the attachment of a copy of the

original application. If the insurer does not deliver or mail a copy as requested within 30

days after receipt of the request by the insurer or its agent, or in the case of a group policy

certificate holder, does not inform that person within the same period how he may inspect the

policy or a copy of it and application or enrollment card or a copy of it during normal business

hours at a place reasonably convenient to the certificate holder, nothing in the application or

enrollment card affects the insurer's obligations under the policy to the person making the

request. Each person whose life or health is insured under a group policy has the same right

to request a copy of any document under Subsection (1)(b).

(2) Except as provided in Subsection (5), no misrepresentation or breach of an affirmative warranty

affects the insurer's obligations under the policy unless:

(a) the insurer relies on it and it is either material or is made with intent to deceive; or

(b) the fact misrepresented or falsely warranted contributes to the loss.

(3) No failure of a condition prior to the loss and no breach of a promissory warranty affects the

insurer's obligations under the policy unless it exists at the time of the loss and either increases

the risk at the time of the loss or contributes to the loss. This Subsection (3) does not apply to

failure to tender payment of premium.

(4) Nondisclosure of information not requested by the insurer is not a defense to an action against

the insurer. Failure to correct within a reasonable time any representation that becomes

incorrect because of changes in circumstances is misrepresentation, not nondisclosure.

(5) If after issuance of a policy the insurer acquires knowledge of sufficient facts to constitute

a general defense to all claims under the policy, the defense is only available if the insurer

notifies the insured within 60 days after acquiring the knowledge of its intention to defend

against a claim if one should arise, or within 120 days if the insurer considers it necessary

to secure additional medical information and is actively seeking the information at the end of

the 60 days. The insurer and insured may mutually agree to a policy rider in order to continue

the policy in force with exceptions or modifications. For purposes of this Subsection (5), an

insurer has acquired knowledge only if the information alleged to give rise to the knowledge

was disclosed to the insurer or its agent in connection with communications or investigations

associated with the insurance policy under which the subject claim arises.

(6)

(a) An insurer that offers coverage to a small employer group as required by Pub. L. No.

104-191, 110 Stat. 1979, Sec. 2711(a), may not rescind a policy or individual certificate holder

based on application misrepresentation unless the insurer would not have been required to

issue the coverage in the absence of the misrepresentation.

(b) Subsection (6)(a) does not prevent an insurer from correcting rates if:

(i) in the absence of misrepresentation a different rate would have been required; and

(ii) the corrected rates are in compliance with Section 31A-30-106.

(7) No trivial or transitory breach of or noncompliance with any provision of this chapter is a basis

for avoiding an insurance contract.

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Amended by Chapter 131, 2003 General Session

31A-21-106 Incorporation by reference.

(1)

(a) Except as provided in Subsection (1)(b), an insurance policy may not contain any agreement

or incorporate any provision not fully set forth in the policy or in an application or other

document attached to and made a part of the policy at the time of its delivery, unless the

policy, application, or agreement accurately reflects the terms of the incorporated agreement,

provision, or attached document.

(b)

(i) A policy may by reference incorporate rate schedules and classifications of risks and short-

rate tables filed with the commissioner.

(ii) By rule or order, the commissioner may authorize incorporation by reference of provisions

for:

(A) administrative arrangements;

(B) premium schedules; and

(c)

(i) A policy of title insurance insuring the mortgage or deed of trust of an institutional lender

may, if requested by an institutional lender, incorporate by reference generally applicable

policy terms that are contained in a specifically identified policy that has been filed with the

commissioner.

(ii) As used in Subsection (1)(c)(i), "institutional lender" means a person that regularly engages

in the business of making loans secured by real estate.

(d) A policy may incorporate by reference the following by citing in the policy:

(i) a federal law or regulation;

(ii) a state law or rule; or

(iii) a public directive of a federal or state agency.

(2) A purported modification of a contract during the term of the policy may not affect the

obligations of a party to the contract:

(a) unless the modification is:

(i) in writing; and

(ii) agreed to by the party against whose interest the modification operates; and

(b) except:

(i) as provided in:

(A) Subsection (3) or (4);

(B) Subsection 31A-22-618.6(8); or

(ii) as otherwise mandated by law.

(3) Subsection (2) does not prevent a change in coverage under group contracts resulting from:

(a) provisions of an employer eligibility rule;

(b) the terms of a collective bargaining agreement; or

(4) Subsection (2) does not prevent a premium increase at any renewal date that is applicable

uniformly to all comparable persons.

Amended by Chapter 292, 2017 General Session

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31A-21-107 Contract rights under noncomplying policies.

(1) Except as otherwise specifically provided by this title, a policy is enforceable against the insurer

according to its terms, even if it exceeds the authority of the insurer.

(2) Any insurance policy, rider, or endorsement issued after July 1, 1986, and which is otherwise

valid, which contains any condition or provision not in compliance with the requirements of this

title, is not rendered invalid by this title. However, those conditions and provisions shall be

construed and applied as if the policy, rider, or endorsement was in full compliance with this

title.

(3) Upon written request of the policyholder or an insured whose rights under the policy are

continuing and not transitory, an insurer shall reform and reissue or amend by a clearly stated

rider its written policy to comply with the requirements of the law existing at the date of issuance

of the policy. Subject to this section and Section 31A-21-102, a person seeking to reform a

written insurance agreement by complaint or petition to a judicial authority shall show by clear

and convincing evidence the existence of facts establishing the reformation.

Amended by Chapter 204, 1986 General Session

31A-21-108 Subrogation actions.

Subrogation actions may be brought by the insurer in the name of its insured.

Enacted by Chapter 204, 1986 General Session

31A-21-109 Debt cancellation agreements and debt suspension agreements.

(1) As used in this section:

(a) "Debt cancellation agreement" means a contract between a lender and a borrower where

the lender, for a separately stated consideration, agrees to waive all or part of the debt in

the event of a fortuitous event such as death, disability, or the destruction of the lender's

collateral.

(b) "Debt suspension agreement" means a contract between a lender and a borrower where

the lender, for a separately stated consideration, agrees to suspend scheduled installment

payments for an agreed period of time in the event of a:

(i) fortuitous event such as involuntary unemployment or accident; or

(ii) fortuitous condition such as sickness.

(d) "Institution" means:

(i) a bank as defined in Section 7-1-103;

(ii) a credit union as defined in Section 7-1-103;

(iii) an industrial bank as defined in Section 7-1-103; or

(iv) a savings and loan association as defined in Section 7-1-103.

(e) "Regulate the issuance" includes regulation of the following with respect to a debt cancellation

agreement or a debt suspension agreement:

(i) terms;

(ii) conditions;

(iii) rates;

(iv) forms; and

(v) claims.

(f) "Subsidiary" is as defined in Section 7-1-103.

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(2) Except as provided in Subsection (6), the commissioner has sole jurisdiction over the regulation

of a debt cancellation agreement or debt suspension agreement.

(3) Subject to this section, the commissioner may by rule, made in accordance with Title 63G,

Chapter 3, Utah Administrative Rulemaking Act:

(a) authorize an insurer to issue:

(i) a debt cancellation agreement; or

(ii) a debt suspension agreement; and

(b) regulate the issuance of:

(i) a debt cancellation agreement; or

(ii) a debt suspension agreement.

(4) Except as provided in Subsection (6), a debt cancellation agreement or a debt suspension

agreement may be issued only by an insurer authorized to issue a debt cancellation agreement

or debt suspension agreement under this section.

(5)

(a) The rules promulgated by the commissioner under this section shall regulate the issuance

of a debt cancellation agreement or debt suspension agreement according to the functional

insurance equivalent of each type of debt cancellation agreement or debt suspension

agreement.

(b) Except as provided in Subsection (5)(c), in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act, the commissioner may by rule determine the functional

insurance equivalent of each type of debt cancellation agreement or debt suspension

agreement.

agreement that provides for the cancellation of indebtedness at death is credit life insurance.

(6) Notwithstanding the other provisions of this section, the issuance of a debt cancellation

agreement or a debt suspension agreement by an institution or a subsidiary of an institution is:

(a) not subject to this section; and

(b) subject to the jurisdiction of the primary regulator of:

(i) the institution; or

(ii) the subsidiary of an institution.

(7) This section does not apply to a guaranteed asset protection waiver.

Amended by Chapter 274, 2010 General Session

31A-21-110 Prohibition against certain use of Social Security number -- Exceptions --

Applicability of section.

(1) As used in this section "publicly display or publicly post" means to intentionally communicate or

otherwise make available to the general public.

(2) An insurer not subject to Section 31A-22-634 may not do any of the following:

(a) publicly display or publicly post in any manner an individual's Social Security number; or

(b) print an individual's Social Security number on any card required for the individual to access

products or services provided or covered by the insurer.

(3) This section does not prevent:

(a) the collection, use, or release of a Social Security number as required by state or federal law;

(b) the use of a Social Security number for internal verification or administrative purposes; or

(i) for claims administration purposes; or

(ii) as part of the verification, eligibility, or payment process.

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(4)

(a) An insurer shall comply with this section by July 1, 2005.

(b) An insurer may obtain an extension for compliance with this section in accordance with this

Subsection (4)(b).

(i) The request for extension shall:

(A) be in writing to the department prior to July 1, 2005; and

(B) provide an explanation as to why the insurer cannot comply.

(ii) The commissioner shall grant a request for extension:

(A) for a period of time not to exceed March 1, 2006; and

(B) if the commissioner finds that the explanation provided under Subsection (4)(b)(i) is a

reasonable explanation.

Enacted by Chapter 2, 2004 General Session

31A-21-111 Insurers to follow terms of policy.

Unless otherwise provided by this title, an insurer shall follow the terms of an insurance policy

issued or assumed by the insurer.

Enacted by Chapter 197, 2006 General Session

31A-21-112 Language other than English.

(1) An insurer may conduct a transaction in a language other than English through an employee or

agent acting as interpreter or through an interpreter provided by the customer.

(2) An insurer may provide a customer an insurance policy, endorsement, rider, or explanatory

or advertising material in a language other than English. If there is a dispute or complaint

regarding the insurance policy, endorsement, rider, or explanatory or advertising material, the

English language version of the insurance coverage shall control the resolution of the dispute or

complaint.

(3) A non-English language policy delivered or issued for delivery in this state is considered to be

in compliance with this title if the insurer certifies that the policy is translated from an English

language policy that complies with this title.

(4) If an insurance policy, endorsement, or rider is provided in a language other than English, it

shall be accompanied by:

(a) the corresponding English language version; and

(b) a disclaimer in both English and the other language that states that the foreign language

version is provided only as an accommodation or courtesy to the customer and the English

language version shall control the resolution of any dispute or complaint.

Enacted by Chapter 443, 2013 General Session

Part 2

Approval of Forms

31A-21-201 Filing of forms.

(1)

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(a) Except as exempted under Subsections 31A-21-101(2) through (6), a form may not be used,

sold, or offered for sale until the form is filed with the commissioner.

(b) A form is considered filed with the commissioner when the commissioner receives:

(i) the form;

(ii) the applicable filing fee as prescribed under Section 31A-3-103; and

(iii) the applicable transmittal forms as required by the commissioner.

(2) In filing a form for use in this state the insurer is responsible for assuring that the form is in

compliance with this title and rules adopted by the commissioner.

(3)

(a) The commissioner may prohibit the use of a form at any time upon a finding that:

(i) the form:

(A) is inequitable;

(B) is unfairly discriminatory;

(D) is deceptive;

(E) is obscure;

(F) is unfair;

(G) encourages misrepresentation; or

(H) is not in the public interest;

(ii) the form provides benefits or contains another provision that endangers the solidity of the

insurer;

(iii) except for a life or accident and health insurance policy form, the form is an insurance policy

or application for an insurance policy, that fails to conspicuously provide:

(A) the exact name of the insurer; and

(B) the state of domicile of the insurer filing the insurance policy or application for the

insurance policy;

(iv) except an application required by Section 31A-22-635, the form is a life or accident and

health insurance form that fails to conspicuously provide:

(A) the exact name of the insurer;

(B) the state of domicile of the insurer; and

the form;

(v) the form violates a statute or a rule adopted by the commissioner; or

(vi) the form is otherwise contrary to law.

(b)

(i) When the commissioner prohibits the use of a form under Subsection (3)(a), the

commissioner may order that, on or before a date not less than 15 days after the day on

which the commissioner issues the order, the use of the form be discontinued.

(ii) Once use of a form is prohibited, the form may not be used until appropriate changes are

filed with and reviewed by the commissioner.

(iii) When the commissioner prohibits the use of a form under Subsection (3)(a), the

commissioner may require the insurer to disclose contract deficiencies to the existing

policyholders.

(i) be in writing;

(ii) constitute an order; and

(iii) state the reasons for the prohibition.

(4)

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(a) If, after a hearing, the commissioner determines that it is in the public interest, the

commissioner may require by rule or order that a form be subject to the commissioner's

approval before an insurer uses the form.

(b) The rule or order described in Subsection (4)(a) shall prescribe the filing procedures for a

form if the procedures are different from the procedures stated in this section.

before use includes:

(i) a form for a particular class of insurance;

(ii) a form for a specific line of insurance;

(iii) a specific type of form; or

(iv) a form for a specific market segment.

(5)

(a) An insurer shall maintain a complete and accurate record of the following for the time period

described in Subsection (5)(b):

(i) a form:

(A) filed under this section for use; or

(B) that is in use; and

(ii) a document filed under this section with a form described in Subsection (5)(a)(i).

(b) The insurer shall maintain a record required under Subsection (5)(a) for the balance of the

current year, plus five years from:

(i) the last day on which the form is used; or

(ii) the last day an insurance policy that is issued using the form is in effect.

Amended by Chapter 198, 2022 General Session

31A-21-202 Explicit approval required.

(1) The following clauses are disapproved unless the commissioner gives them explicit approval:

(a) clauses requiring more expeditious notice of loss or proof of loss than is required by Section

31A-21-312 or rules adopted under that section; and

(b) a schedule of reinstatement fees under Section 31A-22-608, if made a part of the policy. This

type of schedule need not be included in the policy but may be given approval as a separate

document specifically made applicable to particular classes of policies and incorporated in the

policy by reference.

(2) If an insurer fails to obtain explicit approval from the commissioner for the clauses specified in

Subsection (1), the clauses are void.

Amended by Chapter 204, 1986 General Session

31A-21-203 Authorized clauses for insurance forms.

(1) The commissioner may not adopt mandatory uniform clauses. However, the commissioner may

adopt authorized clauses by rule upon a finding that:

(a) price or coverage competition is ineffective because diversity in language or content makes

comparison difficult;

(b) provision of language, content, or form of specific clauses is necessary to provide certainty of

meaning to those clauses;

if there were increased standardization of certain clauses; or

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(d) reasonable minimum standards of insurance protection are needed for policies to serve a

useful purpose.

(2) Any rule creating an authorized clause may prescribe that to be treated as an authorized

clause there shall be verbatim or substantial adherence to prescribed language, that certain

standards or criteria shall be met, or that certain drafting principles shall be followed. The

rules may also permit liberalization of prescribed language. A rule may prescribe verbatim

adherence only after the commissioner has made a finding that substantial adherence to the

prescribed language is not sufficient and that liberalization of prescribed language will frustrate

the purposes of the prescription. If an insurer uses authorized clauses as part of filed forms,

the commissioner may only disapprove those clauses under Section 31A-21-201 upon a finding

that improper combination of clauses makes them violate the criteria of Section 31A-21-201.

Enacted by Chapter 242, 1985 General Session

Part 3

Specific Clauses in Contracts

31A-21-301 Clauses required to be in a prominent position.

(1) The following portions of insurance policies shall appear conspicuously in the policy:

(a) as required by Subsections 31A-21-201(3)(a)(iii) and (iv):

(i) the exact name of the insurer;

(ii) the state of domicile of the insurer; and

(iii) for life insurance and annuity policies only, the address of the administrative office of the

insurer;

(b) information that two or more insurers under Subsection (1)(a) undertake only several liability,

as required by Section 31A-21-306;

(d) a statement that benefits are variable, as required by Section 31A-22-411; however, the

methods of calculation need not be in a prominent position;

(e) the right to return a life or accident and health insurance policy under Sections 31A-22-423

and 31A-22-606; and

(f) the beginning and ending dates of insurance protection.

(2) Each clause listed in Subsection (1) shall be displayed conspicuously and separately from any

other clause.

Amended by Chapter 32, 2020 General Session

31A-21-302 Premiums.

(1) Subject to Section 31A-21-310 and Subsection 31A-21-106(1), the policy shall clearly state the

amount of the total premium or shall explain in detail how it is calculated. Any fee, charge, or

other consideration that is not part of the premium shall be disclosed and explained in writing to

the insured. The disclosure and explanation shall be clearly stated either on the policy, or on

the insurer's billing to the insured. The premium need not be contained in a certificate issued

under a group policy. This Subsection (1) does not preclude premium adjustments or changes

upon the renewal or endorsement of an existing policy. However, the renewal or endorsement

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notice shall contain or be accompanied by a statement of the renewal or endorsement premium

or credit.

(2) Except as provided in Chapter 23a, Insurance Marketing - Licensing Producers, Consultants,

and Reinsurance Intermediaries, no person may charge or receive any consideration for the

insurance policy which is not stated in Subsection (1).

(3) No person may knowingly collect any excessive amount as a premium or any amount for

insurance which is not in the course of processing. Any amount unknowingly collected shall

be returned immediately on learning of the mistake. Prepayment of premiums pursuant to the

policy is not an excessive collection. Insurance is in the course of processing if an application

has been made for it which is being considered by the insurer, even though it has not yet been

accepted or rejected.

Amended by Chapter 298, 2003 General Session

31A-21-303 Cancellation, issuance, and renewal.

(1)

(a) Except as otherwise provided in this section, other statutes, or by rule under Subsection (1)

(c), this section applies to all policies of insurance:

(i) except for:

(A) life insurance;

(B) accident and health insurance; and

(ii) if the policies of insurance are issued on forms that are subject to filing under Subsection

31A-21-201(1).

(b) A policy may provide terms more favorable to insureds than this section requires.

insurance policies in which the insureds do not need protection against arbitrary or

unannounced termination.

(d) The rights provided by this section are in addition to and do not prejudice any other rights the

insureds may have at common law or under other statutes.

(2)

(a) As used in this Subsection (2), "grounds" means:

(i) material misrepresentation;

(ii) substantial change in the risk assumed, unless the insurer should reasonably have foreseen

the change or contemplated the risk when entering into the contract;

(iii) substantial breaches of contractual duties, conditions, or warranties;

(iv) attainment of the age specified as the terminal age for coverage, in which case the insurer

may cancel by notice under Subsection (2)(c), accompanied by a tender of proportional

return of premium; or

(v) in the case of motor vehicle insurance, revocation or suspension of the driver's license of:

(A) the named insured; or

(B) any other person who customarily drives the motor vehicle.

(b)

(i) Except as provided in Subsection (2)(e) or unless the conditions of Subsection (2)(b)(ii) are

met, an insurance policy may not be canceled by the insurer before the earlier of:

(A) the expiration of the agreed term; or

(B) one year from the effective date of the policy or renewal.

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(ii) Notwithstanding Subsection (2)(b)(i), an insurance policy may be canceled by the insurer

for:

(A) nonpayment of a premium when due; or

(B) on grounds defined in Subsection (2)(a).

(c)

(i) The cancellation provided by Subsection (2)(b), except cancellation for nonpayment of

premium, is effective no sooner than 30 days after the delivery or first-class mailing of a

written notice to the policyholder.

(ii) Cancellation for nonpayment of premium of a personal lines policy is effective no sooner

than 10 days after delivery or first-class mailing of a written notice to the policyholder.

(iii) Cancellation for nonpayment of premium of a commercial lines policy is effective no sooner

than 10 days after delivery or first-class mailing of a written notice to:

(A) the policyholder;

(B) each assignee of the policyholder, if the assignee is named in the policy; and

if the loss payee, mortgagee, or lienholder is named in the policy.

(iv) An insurer shall deliver or send by first-class mail a copy of the notice of cancellation

for nonpayment of premium described in Subsection (2)(c)(iii) to an agent of record of

the policyholder on or before the day on which the insurer provides the notice to the

policyholder.

(d)

(i) Notice of cancellation for nonpayment of premium shall include a statement of the reason for

cancellation.

(ii) Subsection (7) applies to the notice required for grounds of cancellation other than

nonpayment of premium.

(e)

(i) Subsections (2)(a) through (d) do not apply to any insurance contract that has not been

previously renewed if the contract has been in effect less than 60 days on the day on which

the written notice of cancellation is mailed or delivered.

(ii) A cancellation under this Subsection (2)(e) may not be effective until at least 10 days after

the day on which a written notice of cancellation is delivered to the insured.

(iii) If the notice required by this Subsection (2)(e) is sent by first-class mail, postage prepaid, to

the insured at the insured's last-known address, delivery is considered accomplished after

the passing, since the mailing date, of the mailing time specified in the Utah Rules of Civil

Procedure.

(iv) A policy cancellation subject to this Subsection (2)(e) is not subject to the procedures

described in Subsection (7).

(3) A policy may be issued for a term longer than one year or for an indefinite term if the policy

includes a clause providing for cancellation by the insurer by giving notice as provided in

Subsection (4)(b)(i) 30 days before an anniversary date.

(4)

(a) Subject to Subsections (2), (3), and (4)(b), a policyholder has a right to have the policy

renewed:

(i) on the terms then being applied by the insurer to similar risks; and

(ii)

(A) for an additional period of time equivalent to the expiring term if the agreed term is one

year or less; or

(B) for one year if the agreed term is longer than one year.

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(b) Except as provided in Subsections (4)(c) and (5), the right to renewal under Subsection (4)(a)

is extinguished if:

(i) at least 30 days before the day on which the policy expires or completes an anniversary,

the insurer delivers or sends by first-class mail a notice of intention not to renew the policy

beyond the agreed expiration or anniversary date to the policyholder at the policyholder's

last-known address;

(ii) not more than 45 nor less than 14 days before the day on which the renewal premium

is due, the insurer delivers or sends by first-class mail a notice to the policyholder at the

policyholder's last-known address, clearly stating:

(A) the renewal premium;

(B) how the renewal premium may be paid, including the due date for payment of the renewal

premium;

and

(D) subject to Subsection (4)(e), that the extinguishment of the right to renew for nonpayment

of premium is effective no sooner than at least 10 days after delivery or first-class mailing

of a written notice to the policyholder that the policyholder has failed to pay the premium

when due;

(iii) the policyholder has:

(A) accepted replacement coverage; or

(B) requested or agreed to nonrenewal; or

(iv) the policy is expressly designated as nonrenewable.

insurance policy as a result of a telephone call or other inquiry that:

(i) references a policy coverage; and

(ii) does not result in the insured requesting payment of a claim.

(d) Failure to renew under this Subsection (4) is subject to Subsection (5).

(e)

(i)

(A) If the policy is a personal lines policy, during the period that begins when an insurer

delivers or sends by first-class mail the notice described in Subsection (4)(b)(ii)(D) and

ends when the premium is paid, coverage exists and premiums are due.

(B) If the policy is a commercial lines policy, during the period that begins when an insurer

delivers or sends by first-class mail the notice described in Subsection (2)(c)(iii) and ends

when the premium is paid, coverage exists and premiums are due.

(ii)

(A) If after receiving the notice required by Subsection (4)(b)(ii)(D) a personal lines

policyholder fails to pay the renewal premium, the coverage is extinguished as of the date

the renewal premium is originally due.

(B) If after receiving the notice required under Subsection (2)(c)(iii), a commercial lines

policyholder fails to pay the renewal premium within the 10 days before the day on which

cancellation for nonpayment is effective, the coverage is extinguished as of the day on

which the renewal premium is originally due.

(iii) Delivery of the notice required by Subsection (2)(c)(iii), (2)(c)(iv), or (4)(b)(ii)(D) includes

electronic delivery in accordance with Section 31A-21-316.

(iv) An insurer is not subject to Subsection (4)(b)(ii)(D) if:

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(A) the insurer provides notice of the extinguishment of the right to renew for failure to pay

premium at least 15 days, but no longer than 45 days, before the day on which the

renewal payment is due; and

(B) the policy is a personal lines policy.

(v) Subsection (4)(b)(ii)(D) does not apply to a policy that provides coverage for 30 days or less.

(5) Notwithstanding Subsection (4), an insurer may not fail to renew the following personal lines

insurance policies solely on the basis of:

(a) in the case of a motor vehicle insurance policy:

(i) a claim from the insured that:

(A) results from an accident in which:

(I) the insured is not at fault; and

(II) the driver of the motor vehicle that is covered by the motor vehicle insurance policy is 21

years of age or older; and

(B) is the only claim meeting the condition of Subsection (5)(a)(i)(A) within a 36-month period;

(ii) a single traffic violation by an insured that:

(A) is a violation of a speed limit under Title 41, Chapter 6a, Traffic Code;

(B) is not in excess of 10 miles per hour over the speed limit;

(I) Section 41-6a-601;

(II) Section 41-6a-604; or

(III) Section 41-6a-605;

(D) is not a violation by an insured driver who is younger than 21 years of age; and

(E) is the only violation meeting the conditions of Subsections (5)(a)(ii)(A) through (D) within a

36-month period; or

(iii) a claim for damage that:

(A) results solely from:

(I) wind;

(II) hail;

(III) lightning; or

(IV) an earthquake;

(B) is not preventable by the exercise of reasonable care; and

month period; and

(b) in the case of a homeowner's insurance policy, a claim by the insured that is for damage that:

(i) results solely from:

(A) wind;

(B) hail; or

(ii) is not preventable by the exercise of reasonable care; and

(iii) is the only claim meeting the conditions of Subsections (5)(b)(i) and (ii) within a 36-month

period.

(6)

(a)

(i) Subject to Subsection (6)(b), if the insurer offers or purports to renew the policy, but on less

favorable terms or at higher rates, the new terms or rates take effect on the renewal date if

the insurer delivered or sent by first-class mail to the policyholder notice of the new terms or

rates at least 30 days before the day on which the previous policy expires.

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(ii) If the insurer did not give the prior notification described in Subsection (6)(a)(i) to the

policyholder, the new terms or rates do not take effect until 30 days after the day on which

the insurer delivers or sends by first-class mail the notice, in which case the policyholder

may elect to cancel the renewal policy at any time during the 30-day period.

(iii) Return premiums or additional premium charges shall be calculated proportionately on the

basis that the old rates apply.

(b) Except as provided in Subsection (6)(c), Subsection (6)(a) does not apply if the only change

in terms that is adverse to the policyholder is:

(i) a rate increase generally applicable to the class of business to which the policy belongs;

(ii) a rate increase resulting from a classification change based on the altered nature or extent

of the risk insured against; or

(iii) a policy form change made to make the form consistent with Utah law.

policy.

(7)

(a) If a notice of cancellation or nonrenewal under Subsection (2)(c) does not state with

reasonable precision the facts on which the insurer's decision is based, the insurer shall send

by first-class mail or deliver that information within 10 working days after receipt of a written

request by the policyholder.

(b) A notice under Subsection (2)(c) is not effective unless it contains information about the

policyholder's right to make the request.

(8)

(a) An insurer that gives a notice of nonrenewal or cancellation of insurance on a motor vehicle

insurance policy issued in accordance with the requirements of Chapter 22, Part 3, Motor

Vehicle Insurance, for nonpayment of a premium shall provide notice of nonrenewal or

cancellation to a lienholder if the insurer has been provided the name and mailing address of

the lienholder.

(b) An insurer shall provide the notice described in Subsection (8)(a) to the lienholder by first-

class mail or, if agreed by the parties, any electronic means of communication.

notification to an insurer that is required to make a notification under Subsection (8)(a).

(9) If a risk-sharing plan under Section 31A-2-214 exists for the kind of coverage provided by the

insurance being cancelled or nonrenewed, a notice of cancellation or nonrenewal required

under Subsection (2)(c) or (4)(b)(i) may not be effective unless the notice contains instructions

to the policyholder for applying for insurance through the available risk-sharing plan.

(10) There is no liability on the part of, and no cause of action against, any insurer, its authorized

representatives, agents, employees, or any other person furnishing to the insurer information

relating to the reasons for cancellation or nonrenewal or for any statement made or information

given by them in complying or enabling the insurer to comply with this section unless actual

malice is proved by clear and convincing evidence.

(11) This section does not alter any common law right of contract rescission for material

misrepresentation.

(12) If a person is required to pay a premium in accordance with this section:

(a) the person may make the payment using:

(i) the United States Postal Service;

(ii) a delivery service the commissioner describes or designates by rule made in accordance

with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; or

(iii) electronic means; and

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(b) the payment is considered to be made:

(i) for a payment that is mailed using the method described in Subsection (12)(a)(i), on the date

on which the payment is postmarked;

(ii) for a payment that is delivered using the method described in Subsection (12)(a)(ii), on the

date on which the delivery service records or marks the payment as having been received

by the delivery service; or

(iii) for a payment that is made using the method described in Subsection (12)(a)(iii), on the

date on which the payment is made electronically.

Amended by Chapter 198, 2022 General Session

31A-21-304 Special cancellation provisions.

Whether or not Section 31A-21-303 is also applicable:

(1) Section 31A-21-305 applies to cancellation on request of a premium finance company;

(2) Section 70C-6-304 applies to cancellation upon request of a creditor; and

(3) Sections 41-12a-404 and 41-12a-405 apply to the cancellation or other termination of insurance

coverage or of a surety bond after the insurer or surety has provided a certificate of insurance

or suretyship to the Department of Public Safety.

Amended by Chapter 91, 1987 General Session

31A-21-305 Cancellation upon request of a premium finance company.

(1) As used in this section:

(a) "Insurance premium finance company" means a person engaged in the business of entering

into premium finance agreements.

(b) "Premium finance agreement" means an agreement by which an insured or prospective

insured promises to pay to an insurance premium finance company the amount advanced or

to be advanced under the agreement to an insurer or to an insurance producer in payment of

premiums on an insurance policy, together with a service charge, an interest charge, or both.

(2) When a premium finance agreement contains a power of attorney or other authority enabling

the insurance premium finance company to cancel any insurance policy listed in the agreement,

the following applies:

(a) Not less than 10 days' written notice of the intent of the insurance premium finance company

to order cancellation of the insurance policy, unless the policyholder's default is cured prior to

the date stated in the notice, shall be delivered or mailed first-class to the policyholder. The

insurance producer indicated on the premium finance agreement shall also be given the same

notice.

(b) Pursuant to the power of attorney or other authority, evidence of which is delivered to the

insurer, the insurance premium finance company may order cancellation on behalf of the

insured. This cancellation shall be effected by mailing to the insurer a written notice stating

when the cancellation is effective. The insurance policy shall be cancelled as if the notice of

cancellation had been given by the insured, but without requiring the return of the insurance

policy. The insurance premium finance company shall also send a copy of the same notice to

the insured at his last known address and to the insurance producer indicated on the premium

finance agreement.

be cancelled unless notice is given to a governmental agency, mortgagee, or other third

party, the insurer shall give the prescribed notice on behalf of itself or the insured to that

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governmental agency, mortgagee, or other third party within a reasonable time after the day it

receives the notice of cancellation from the premium finance company. When any statutory,

rule, or contractual restrictions require the continuation of insurance beyond the effective date

of cancellation specified by the premium finance company, the insurance is limited to the

coverage required by those restrictions and to the persons those restrictions are designed to

protect.

(d) Whenever a financed insurance policy is cancelled, the insurer shall return any unearned

premiums due under the insurance policy to the insurance premium finance company for the

account of the insured, and this action by the insurer satisfies the insurer's obligations under

the insurance policy which relate to the return of unearned premiums. If the crediting of return

premiums to the account of the insured results in a surplus over the amount due from the

insured, the premium finance company shall refund that excess to the insured if it exceeds

$5.

(3) No filing of the premium finance agreement or recording of a premium finance transaction is

necessary to perfect the validity of the agreement as a secured transaction as against creditors,

subsequent purchasers, pledgees, encumbrancers, successors, or assigns.

Amended by Chapter 298, 2003 General Session

31A-21-306 Policies or surety bonds jointly issued.

Two or more insurers may together issue a policy or surety bond. Their liability shall be joint

and several with respect to the policy or bond. The policy or bond shall state the proportion or

amount of premium to be paid to each insurer and, as between the issuing insurers, the type

and the proportion or amount of liability each insurer assumes. Service of process on any of the

insurers is service on all of them.

Amended by Chapter 204, 1986 General Session

31A-21-307 Other insurance.

(1) When two or more policies promise to indemnify an insured against the same loss without

intending cumulative coverage, no "other insurance" provisions of the policies may reduce the

aggregate protection of the insured below the lesser of the actual insured loss suffered by the

insured and the maximum indemnification promised by any policy without regard to any "other

insurance" provision.

(2) Subject to Subsection (1), the policies may by their terms define the extent to which each

insurance is primary and each is excess, but if the "other insurance" terms of the policies are

inconsistent, there is joint and several liability to the insured on any coverage which overlaps

and which has inconsistent terms. Subsequent settlement among the insurers does not alter

any rights of the insured. The commissioner may adopt rules consistent with this section

concerning "other insurance."

(3) This section does not apply to accident and health insurance policies. Refer to Section

31A-22-619 for the coordination of accident and health benefits.

Amended by Chapter 116, 2001 General Session

31A-21-308 Limitations on loss to be borne by insurer.

(1) An insurance policy indemnifying an insured against loss may by clear language limit the part

of the loss to be paid by the insurer to a specified or determinable maximum amount, to loss in

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excess of a specified or determinable amount, to a specified proportion of the loss which may

vary with the amount of the loss, or to any combination of these methods. If the policy covers

various risks, different limitations may be provided separately for each risk, if the policy clearly

states that.

(2) A policy indemnifying an insured against loss of or damage to property may limit the part of the

loss to be paid by the insurer to a percentage of the total loss that corresponds to the ratio of

the insured sum to a specified percentage of the value of the insured property.

Enacted by Chapter 242, 1985 General Session

31A-21-309 Nonwaiver clause.

An insurer may insert a provision in any insurance policy that no change in the policy is valid

unless approved by an executive officer of the insurer, or unless the approval is endorsed on the

policy or attached to it, or both, and that no agent has authority to change the policy or waive any

of its provisions. This does not preclude a person claiming a right under the policy from relying on

waiver or estoppel in an appropriate case.

Enacted by Chapter 242, 1985 General Session

31A-21-310 Dividends on policies.

(1) Section 31A-22-418 applies to life insurance and annuities.

(2) Any insurer may distribute a portion of surplus attributable to policies other than life insurance

or annuities, in amounts and with classifications the board of directors determines to be fair and

reasonable. This distribution may not be contingent on the renewal of any policy or of premium

payments unless the policy stated that limitation when it was written. A schedule explaining

the basis for the distribution shall be filed with the commissioner prior to the distribution. The

schedule shall be kept confidential by the commissioner unless he finds that the interests of

insureds and the public require that it be made public.

(3) Any insurer may distribute surplus to any class of policyholder, even if their policies do not

provide for it. A schedule explaining the basis for the distribution shall be filed with the

commissioner under Subsection (2) at least 30 days prior to the distribution. The commissioner

shall disallow any distribution which is materially unfair to other policyholders or which would

place the insurer in a financially hazardous condition.

(4) It is permissible to provide an indivisible dividend to classes of policyholders having more than

one type of policy, including a combination of life or annuities with other types of insurance.

Enacted by Chapter 242, 1985 General Session

31A-21-311 Delivery of policy or certificate.

(1)

(a) An insurer issuing an individual or group life insurance policy or an accident and health

insurance policy shall deliver a copy of the policy to the policyholder as soon as practicable

but no later than 90 days after the day on which the coverage is effective.

(b) The policy described in this Subsection (1) shall:

(i) provide the exact name of the insurer; and

(ii) state the state of domicile of the insurer.

(2)

(a)

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(i) Except under Subsection (2)(d), an insurer issuing a group insurance policy other than a

blanket insurance policy shall, as soon as practicable after the coverage is effective, but no

later than 90 days after the day on which the coverage is effective, provide a certificate for

each member of the insured group, except that only one certificate need be provided for the

members of a family unit.

(ii) The certificate described in this Subsection (2) shall:

(A) provide the exact name of the insurer;

(B) state the state of domicile of the insurer; and

(I) any rights of conversion to an individual policy;

(II) in the case of group life insurance, any continuation of coverage during total disability;

and

(III) in the case of group life insurance, the incontestability provision.

(iii) Upon receiving a written request, the insurer shall inform any insured how the insured may

inspect, during normal business hours at a place reasonably convenient to the insured:

(A) a copy of the policy; or

(B) a summary of the policy containing all the details that are relevant to the certificate holder.

(b) The commissioner may by rule impose a requirement similar to Subsection (2)(a) on any

class of blanket insurance policies for which the commissioner finds that the group of persons

covered is constant enough for that type of action to be practicable and not unreasonably

expensive.

(c)

(i) A certificate shall be provided in a manner reasonably calculated to bring the certificate to

the attention of the certificate holder.

(ii) The insurer may deliver or mail a certificate:

(A) directly to the certificate holders; or

(B) in bulk to the policyholder to transmit to certificate holders.

(iii) An affidavit by the insurer that the insurer mailed the certificates in the usual course of

business creates a rebuttable presumption that the insurer has mailed the certificate to:

(A) a certificate holder; or

(B) a policyholder as provided in Subsection (2)(c)(ii)(B).

(d) The commissioner may by rule or order prescribe substitutes for delivery or mailing of

certificates that are reasonably calculated to inform a certificate holder of the certificate

holder's rights, including:

(i) booklets describing the coverage;

(ii) the posting of notices in the place of business; or

(iii) publication in a house organ.

(3) Unless a policy, certificate or an authorized substitute has been made available to the

policyholder or certificate holder, as applicable, when required by this section, an act or

omission forbidden to or required of the policyholder or certificate holder by the policy or

certificate after the coverage has become effective as to the policyholder or certificate holder,

other than intentionally causing the loss insured against or failing to make required contributory

premium payments, may not affect the insurer's obligations under the insurance contract.

Amended by Chapter 193, 2019 General Session

31A-21-312 Notice and proof of loss.

(1) Every insurance policy shall provide that:

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(a) when notice of loss is required separately from proof of loss, notice given by or on behalf of

the insured to any authorized agent of the insurer within this state, with particulars sufficient to

identify the policy, is notice to the insurer; and

(b) failure to give any notice or file any proof of loss required by the policy within the time

specified in the policy does not invalidate a claim made by the insured, if the insured shows

that it was not reasonably possible to give the notice or file the proof of loss within the

prescribed time and that notice was given or proof of loss filed as soon as reasonably

possible.

(2) Failure to give notice or file proof of loss as required by Subsection (1)(b) does not bar recovery

under the policy if the insurer fails to show it was prejudiced by the failure. This subsection

may not be construed to extend the statute of limitations applicable under Section 31A-21-313.

(3) The insurer shall, on request, promptly furnish an insured any forms or instructions needed to

make a proof of loss.

(4) As an alternative to giving notice directly under Subsection (1)(a), it is a sufficient service of

notice or of proof of loss if a first class postage prepaid envelope addressed to the insurer and

containing the proper notice or proof of loss is deposited in any United States post office within

the time prescribed.

(5) The commissioner shall adopt rules dealing with notice of loss and proof of loss time limitations

under insurance policies. Under Section 31A-21-202, the commissioner's express approval

shall be received before any contract clause requiring notice of loss or proof of loss in a manner

inconsistent with the rule may be used in an insurance contract.

(6) The acknowledgment by the insurer of the receipt of notice, the furnishing of forms for filing

proofs of loss, the acceptance of those proofs, or the investigation of any claim are not alone

sufficient to waive any of the rights of the insurer in defense of any claim arising under the

insurance policy.

Amended by Chapter 297, 2011 General Session

31A-21-313 Limitation of actions.

(1)

(a) A person shall commence an action on a written policy or contract of first party insurance

within three years after the inception of the loss except as provided in:

(i) Subsection 31A-22-305(11); and

(ii) Subsection 31A-22-307(7).

(b) The inception of the loss on a fidelity bond is the date the insurer first denies all or part of a

claim made under the fidelity bond.

(2) Except as provided in Subsection (1) or elsewhere in this title, an action on a written policy

or contract for insurance is subject to the law applicable to limitation of actions in Title 78B,

Chapter 2, Statutes of Limitations.

(3) An insurance policy may not:

(a) limit the time for beginning an action on the policy to a time less than that authorized by

statute;

(b) prescribe in what court an action may be brought on the policy; or

contracts.

(4)

(a) Unless by verified complaint it is alleged that prejudice to the complainant will arise from a

delay in bringing suit against an insurer, which prejudice is other than the delay itself, an

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action may not be brought against an insurer on an insurance policy to compel payment

under the insurance policy until the earlier of:

(i) 60 days after proof of loss has been furnished as required under the policy;

(ii) waiver by the insurer of proof of loss; or

(iii)

(A) the insurer's denial of full payment; or

(B) for an accident and health insurance policy, the insurer's denial of payment.

(b) Under an accident and health insurance policy, an insurer may not require the completion of

an appeals process that exceeds the provisions in 29 C.F.R. Sec. 2560.503-1 to bring suit

under this Subsection (4).

(5) The period of limitation is tolled during the period in which the parties conduct an appraisal or

arbitration procedure prescribed by the insurance policy, by law, or as agreed to by the parties.

Amended by Chapter 185, 2023 General Session

31A-21-314 Prohibited provisions.

(1) As used in this section:

(a) "Reserving discretionary authority" means a policy provision that:

(i) has the effect of conferring discretion on an insurer, or other claim administrator, to:

(A) determine eligibility for benefits; or

(B) interpret the terms or provisions of the policy, contract, certificate, or agreement; and

(ii) could lead to a deferential standard of review by a reviewing court.

(b) "Reserving discretionary authority" does not include a policy provision that:

(i) informs an insured that, as part of the insurer's routine operations, the insurer applies the

terms of the contract for:

(A) making a decision, including making a determination regarding eligibility, or receipt of

benefits or claims; or

(B) explaining the insurer's policies and procedures; and

(ii) does not give rise to a deferential standard of review by a reviewing court.

(2) An insurance policy subject to this chapter may not contain a provision:

(a) requiring the insurance policy to be construed according to the laws of another jurisdiction

except as necessary to meet the requirements of compulsory insurance laws of other

jurisdictions;

(b) depriving Utah courts of jurisdiction over an action against the insurer, except as provided in

permissible arbitration provisions;

of action accrues; or

(d) for life insurance or accident and health insurance, reserving discretionary authority.

(3) For purposes of Subsection (2)(c), the cause of action accrues on a fidelity bond on the date

the insurer first denies all or part of a claim made under the fidelity bond.

Amended by Chapter 351, 2018 General Session

31A-21-315 Refund of canceled health insurance premiums and Medicare supplement

insurance premiums.

(1) As used in this section, "unearned amount of the collected premium" means the amount of the

collected premium applicable to the unexpired portion of the time period to which the policy or

certificate relates.

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(2) If a health insurance policy or a Medicare supplement policy is cancelled for a reason other

than a material misrepresentation, the insurer shall refund the unearned amount of the

collected premium.

(3) If an insurer cancels a health insurance policy or a Medicare supplement policy because of a

material misrepresentation on the application, the insurer shall refund all premiums collected

minus claims that have been paid.

Amended by Chapter 156, 2009 General Session

31A-21-316 Electronic notices and documents.

(1) As used in this section:

(a) "Delivered by electronic means" includes:

(i) delivery to an electronic mail address at which a party has consented to receive a notice or

document; or

(ii) posting on an electronic network or site accessible by way of the Internet, a mobile

application, a computer, a mobile device, a tablet, or any other electronic device, together

with separate notice of the posting that is provided by:

(A) electronic mail to the address at which the party has consented to receive notice; or

(B) any other delivery method that has been consented to by the party.

(b)

(i) "Party" means a recipient of a notice or document required as part of an insurance

transaction.

(ii) "Party" includes an applicant, an insured, or a policyholder.

(2) Subject to Subsections (4) and (5), a notice to a party or another document required under

applicable law in an insurance transaction or that serves as evidence of insurance coverage

may be delivered, stored, and presented by electronic means if it meets the requirements of

Title 46, Chapter 4, Uniform Electronic Transactions Act.

(3) Delivery of a notice or document in accordance with this section is considered equivalent to any

delivery method required under applicable law.

(4) A notice or document may be delivered by electronic means by an insurer to a party under this

section if:

(a) the party has affirmatively consented to that method of delivery and has not withdrawn the

consent;

(b) the party, before giving consent, is provided with a clear and conspicuous statement informing

the party of:

(i) any right or option of the party to have the notice or document provided or made available in

paper or another nonelectronic form;

(ii) the right of the party to withdraw consent to have a notice or document delivered by

electronic means, including:

(A) a condition or consequence imposed if consent is withdrawn;

(B) when the insurer will make the party's withdrawal effective, during or at the conclusion of

the policy term; and

delivered by electronic means;

(iii) whether the party's consent applies:

(A) only to the particular transaction as to which the notice or document must be given; or

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(B) to identified categories of notices or documents that may be delivered by electronic means

during the course of the party's relationship with the insured; and

(iv) the means, after consent is given, by which a party may obtain a paper copy of a notice or

document delivered by electronic means; and

(i) before giving consent, is provided with a statement of the electronic delivery and retrieval

method requirements for access to and retention of a notice or document delivered by

electronic means;

(ii) consents electronically, or confirms consent electronically, in a manner that reasonably

demonstrates that the party can access information in the electronic form that will be used

for a notice or document delivered by electronic means as to which the party has given

consent; and

(iii) is provided a process to update information needed to contact the party electronically;

(d) after consent of the party is given and if a change in the electronic delivery or retrieval

methods creates a substantial risk that the party will not be able to access or retain a

subsequent notice or document to which the consent applies, the insurer:

(i) provides the party with a statement of:

(A) the revised electronic delivery or retrieval methods; and

(B) the right of the party to withdraw consent without the imposition of any condition or

consequence that was not disclosed under Subsection (4)(b)(ii);

(ii) complies with Subsection (4)(b); and

(e) an insurer files with the department the consent statement described under Subsection (4)

(b), which includes conditions or consequences for a party to revoke the party's consent to

conduct an insurance transaction, electronically.

(i) An insurer shall file the consent statement described in Subsection (4)(b) before the insurer

uses the consent statement.

(ii) The insurer shall communicate to the party in accordance with Subsection (4)(b) the

conditions or consequences for a party to revoke the party's consent.

(5)

(a) An insurer may deliver a policy document to a party, by electronic means and without the

party's consent to receive the policy document by electronic means, if:

(i) the party has not withdrawn the consent described in this Subsection (5);

(ii) the insurer provides a clear and conspicuous statement in paper form, to the party, informing

the party of:

(A) the party's right or option to have the policy document provided or made available in paper

or another nonelectronic form;

(B) the party's right to withdraw consent to the electronic delivery of a policy document,

including the procedure a party must follow to withdraw consent to electronic delivery of a

policy document;

(D) the means by which a party may obtain a paper copy of a policy document that the insurer

delivered electronically;

(E) the electronic delivery and retrieval method requirements for access to and retention of a

policy document delivered electronically; and

(F) the process to update the party's electronic contact information; and

(iii) the party demonstrates the ability to electronically access the information contained in the

policy document.

(b) This Subsection (5) does not apply to a life insurance policy document.

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(6) A withdrawal of consent by a party does not affect the legal effectiveness, validity, or

enforceability of a notice or document delivered by electronic means to the party before the

withdrawal of consent is effective.

(7) This section does not affect requirements related to content or timing of any notice or document

required under applicable law.

(8) If a provision of this title or applicable law requiring a notice or document to be provided to a

party expressly requires verification or acknowledgment of receipt of the notice or document,

the notice or document may be delivered by electronic means only if the method used provides

for verification or acknowledgment of receipt.

(9) The legal effectiveness, validity, or enforceability of a contract or policy of insurance executed

by a party may not be denied solely because of the failure to obtain electronic consent or

confirmation of consent of the party in accordance with Subsection (4)(c)(ii).

(10) This section does not apply to or affect a notice or document delivered by an insurer in an

electronic form before July 1, 2014, to a party who, before July 1, 2014, has consented to

receive the notice or document in an electronic form otherwise allowed by law.

(11) If the consent of a party to receive certain notices or documents in an electronic form is on file

with an insurer before July 1, 2014, and pursuant to this section, an insurer intends to deliver

an additional notice or document to the party in an electronic form, then before delivering the

additional notices or documents electronically, the insurer shall notify the party of:

(a) the notices or documents that may be delivered by electronic means under this section that

were not previously delivered electronically; and

(b) the party's right to withdraw consent to have notices or documents delivered by electronic

means.

(12)

(a) Except as otherwise provided by Section 31A-21-102, if an oral communication or a recording

of an oral communication from a party can be reliably stored and reproduced by an insurer,

the oral communication or recording may qualify as a notice or document delivered by

electronic means for purposes of this section.

(b) If a provision of this title or applicable law requires a signature, notice, or document to be

notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the

electronic signature of the party authorized to perform those acts, together with all other

information required to be included by the provision, is attached to or logically associated with

the signature, notice, or document.

(13) For purposes of this section, an insurer's failure to comply with Subsection (4) or (5)

constitutes a withdrawal of the party's consent.

(14) A party is presumed to have withdrawn consent under this section if the email address the

party provides to receive a policy document returns a message stating that the message is

undeliverable each time the insurer attempts electronic delivery over a period of up to two

business days.

(15) This section may not be construed to modify, limit, or supersede the federal Electronic

Signatures in Global and National Commerce Act, P. Law 106-229, as amended.

Amended by Chapter 120, 2024 General Session

Part 4

Mass Marketed Life or Accident and Health Insurance

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31A-21-401 Scope and construction of part.

This part applies to all mass marketed life or accident and health insurance, notwithstanding

Subsection 31A-1-103(3). This part may not be construed to limit the application of other

provisions of this title to insurers effecting mass marketed life or accident and health insurance

policies on persons in this state.

Amended by Chapter 116, 2001 General Session

31A-21-402 Definitions.

As used in this part, "mass marketed life or accident and health insurance" means the insurance

under any individual, franchise, group, or blanket insurance policy offering life or accident and

health insurance:

(1) that is offered by means of direct response solicitation through:

(a) a sponsoring organization; or

(b) the mails or other mass communications media; and

(2) under which the person insured pays all or substantially all of the cost of the person's

insurance.

Amended by Chapter 120, 2024 General Session

31A-21-403 Orders terminating effectiveness of policies.

Upon the commissioner's order, no mass marketed life or accident and health insurance issued

by an insurer may continue to be effected on persons in this state. The commissioner may issue

an order under this section only if the commissioner finds, after a hearing, that the total charges

for the insurance to the persons insured are unreasonable in relation to the benefits provided. The

commissioner's findings under this section shall be in writing. Orders under this section may direct

the insurer to cease effecting the insurance until the total charges for the insurance are found by

the commissioner to be reasonable in relation to the benefits provided.

Amended by Chapter 297, 2011 General Session

31A-21-404 Out-of-state insurers.

Notwithstanding Subsection 31A-1-103(3)(h), an insurer extending mass marketed life or

accident and health insurance under a group insurance policy issued outside of this state to

residents of this state or a blanket insurance policy issued outside of this state to residents of this

state shall, with respect to the mass marketed life or accident and health insurance policy:

(1) comply with:

(a) Sections 31A-23a-402, 31A-23a-402.5, and 31A-23a-403; and

(b) Chapter 26, Part 3, Claim Practices; and

(2) upon the commissioner's request, deliver to the commissioner a copy of:

(a) any mass marketed life or accident and health insurance policy;

(b) a certificate issued under a mass marketed life or accident and health insurance policy;

(d) an enrollment form for a mass marketed life or accident and health insurance policy; and

(e) advertising material used in this state in connection with a mass marketed life or accident and

health insurance policy.

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Amended by Chapter 252, 2021 General Session

Part 5

Domestic Violence or Child Abuse - Insurance Practices

31A-21-501 Definitions.

For purposes of this part:

(1) "Applicant" means:

(a) in the case of an individual life or accident and health policy, the person who seeks to contract

for insurance benefits; or

(b) in the case of a group life or accident and health policy, the proposed certificate holder.

(2) "Cohabitant" means an emancipated individual pursuant to Section 15-2-1 or an individual who

is 16 years old or older who:

(a) is or was a spouse of the other party;

(b) is or was living as if a spouse of the other party;

(d) has one or more children in common with the other party; or

(e) resides or has resided in the same residence as the other party.

(3) "Child abuse" means the commission or attempt to commit against a child a criminal offense

described in:

(a) Title 76, Chapter 5, Part 1, Assault and Related Offenses;

(b) Title 76, Chapter 5, Part 4, Sexual Offenses;

(d) Section 76-9-702.1, Sexual battery; or

(e) Section 76-9-702.5, Lewdness involving a child.

(4) "Domestic violence" means any criminal offense involving violence or physical harm or threat

of violence or physical harm, or any attempt, conspiracy, or solicitation to commit a criminal

offense involving violence or physical harm, when committed by one cohabitant against another

and includes commission or attempt to commit, any of the following offenses by one cohabitant

against another:

(a) aggravated assault, as described in Section 76-5-103;

(b) assault, as described in Section 76-5-102;

(d) harassment, as described in Section 76-5-106;

(e) electronic communication harassment, as described in Section 76-9-201;

(f) kidnapping, child kidnapping, or aggravated kidnapping, as described in Sections 76-5-301,

76-5-301.1, and 76-5-302;

(g) mayhem, as described in Section 76-5-105;

(h) sexual offenses, as described in Title 76, Chapter 5, Part 4, Sexual Offenses, and Sections

76-5b-201 and 76-5b-201.1;

(i) stalking, as described in Section 76-5-106.5;

(j) unlawful detention or unlawful detention of a minor, as described in Section 76-5-304;

(k) violation of a protective order or ex parte protective order, as described in Section 76-5-108;

(l) any offense against property described in Title 76, Chapter 6, Part 1, Property Destruction,

Part 2, Burglary and Criminal Trespass, or Part 3, Robbery;

(m) possession of a deadly weapon with intent to assault, as described in Section 76-10-507; or

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(n) discharge of a firearm from a vehicle, near a highway, or in the direction of any person,

building, or vehicle, as described in Section 76-10-508.

(5) "Subject of domestic abuse" means an individual who is, has been, may currently be, or may

have been subject to domestic violence or child abuse.

Amended by Chapter 185, 2022 General Session

Amended by Chapter 430, 2022 General Session

31A-21-502 Scope of part.

This part applies to only life and accident and health insurance.

Amended by Chapter 116, 2001 General Session

31A-21-503 Discrimination based on domestic violence or child abuse prohibited.

(1) Except as provided in Subsection (2), an insurer of life or accident and health insurance may

not consider whether an insured or applicant is the subject of domestic abuse as a factor to:

(a) refuse to insure the applicant;

(b) refuse to continue to insure the insured;

(d) limit the amount, extent, or kind of coverage available to the insured or applicant;

(e) charge a different rate for coverage to the insured or applicant;

(f) exclude or limit benefits or coverage under an insurance policy or contract for losses incurred;

(g) deny a claim; or

(h) terminate coverage or fail to provide conversion privileges in violation of Section 31A-22-612

under a group accident and health policy for the insured because the coverage was issued in

the name of the perpetrator of the domestic violence or abuse.

(2)

(a) Notwithstanding Subsection (1), an insurer may underwrite on the basis of the physical

or mental condition of an insured or applicant if the underwriting is on the basis of a

determination that there is a correlation between the medical or mental condition and a

material increase in insurance risk.

(b) For purposes of Subsection (2)(a), the fact that an insured or applicant is a subject of

domestic abuse is not a mental or physical condition.

actuarial principles.

(d) Within 30 days after receiving an oral or written request from an insured or applicant, an

insurer shall disclose in writing:

(i) the basis of an action permitted under Subsection (2)(a); and

(ii) if the policy has been issued or modified, the extent the action taken will impact the amount,

extent, or kind of coverage or benefits available to the insured.

Amended by Chapter 319, 2013 General Session

31A-21-504 Investigation -- Use of information used -- Disclosure.

(1) An insurer may not ask an insured or applicant or use any other means to determine whether

the insured or applicant is the subject of domestic abuse.

(2) If an insured or applicant voluntarily discloses to the insurer or to the insured's or applicant's

treating physician that the insured or applicant or a member of the insured's or applicant's

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household is the subject of domestic abuse, an insurer may not use the information of domestic

violence or child abuse in violation of this part.

(3)

(a) An insurer may not disclose or transfer information to a third party relating to whether a

specifically identifiable insured or applicant is the subject of domestic abuse unless the

information:

(i) is required to be disclosed by the commissioner;

(ii) is required to be disclosed by a court of competent jurisdiction;

(iii) is necessary for the direct provision of health care services;

(iv) is permitted to be disclosed to an authorized agency under Chapter 31, Insurance Fraud

Act;

(v) is required to be disclosed by abuse reporting laws; or

(vi) is authorized to be disclosed by the written consent of the individual who is the subject of

domestic abuse, if that person is at least 18 years old.

(b) Subsection (3)(a) may not prevent an insured or applicant from obtaining the insured's or

applicant's own medical or insurance records.

law related to the confidentiality of medical information.

(d) For purposes of Subsection (3)(a), "third party" does not include an insurer's employees,

agents, or contractors who are engaged in the insurer's necessary business operation.

(4) This section may not be construed to prohibit an insurer from:

(a) asking an applicant or insured about a medical condition, even if the condition is related to

domestic violence or child abuse;

(b) using information obtained under Subsection (4)(a) for the purpose of actions or practices

permitted under this part.

Enacted by Chapter 132, 1997 General Session

31A-21-505 Limit on liability.

An insurer that issues a life or accident and health insurance policy to an individual who is the

subject of domestic abuse is not liable civilly or criminally for the death of or any injuries to the

insured as a result of domestic violence or child abuse beyond the obligations of the insurer under:

(1) the insurance policy; or

(2) this title.

Amended by Chapter 116, 2001 General Session

31A-21-506 Enforcement -- Private rights.

(1) An insurer that violates this part is subject to any penalty permitted under this title.

(2) This part does not:

(a) create a private right of action for a violation of this part; or

(b) limit or impair the right of an individual to sue and recover damages from the insurer in a civil

action for a cause of action that is not based on a violation of this part.

Enacted by Chapter 132, 1997 General Session

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Chapter 22

Contracts in Specific Lines

Part 1

Contracts of Suretyship

31A-22-101 Scope of part.

This Part 1, Contracts of Suretyship, applies to those suretyship obligations that are subject to

Chapter 21, Insurance Contracts in General, and this chapter under Section 31A-21-101.

Amended by Chapter 90, 2004 General Session

31A-22-102 Bonds need not be under seal.

Under this code, no suretyship obligation is required to be under seal.

Enacted by Chapter 242, 1985 General Session

31A-22-103 Validity of surety bonds.

(1) An undertaking to stand as surety which is issued by an insurer authorized to do a surety

business in this state is complete compliance with any qualification requirement in Utah law

respecting surety bonds. This undertaking is acceptable to any state official or court-appointed

fiduciary authorized to receive or empowered to require the undertaking. A copy of a surety's

certificate of authority, certified by the commissioner, is prima facie evidence that a surety was

authorized to do business in this state on the date of the certificate.

(2) No instrument executed by an insurer authorized to do a surety business is ineffective because

of the insurer's failure to attach a copy of its certificate of authority to do business in this state.

However, a public official or court-appointed fiduciary may, by prior written request, require that

a copy of the insurer's certificate of authority, certified by the commissioner, be delivered. The

insurer's failure to deliver a certified copy of the surety's certificate of authority within 10 days

of receipt of the request is adequate grounds for refusing to accept the suretyship instrument.

Failure to request a copy of the certificate of authority prior to accepting the surety instrument is

a waiver of the right to request the certificate.

(3) After executing an obligation of suretyship, no insurer may deny its corporate power to execute

that type of instrument or to incur that type of liability in any proceeding against the insurer upon

that instrument.

Amended by Chapter 204, 1986 General Session

31A-22-104 Indemnity agreements and security for benefit of surety.

(1) Any insurer authorized to do a surety business may contract with any person, including a

principal debtor under a suretyship obligation, for indemnity or security to protect the surety

against losses. No indemnity agreement or provision of security by the principal debtor

releases from or changes the liability of the principal debtor or of the sureties from the terms

established in the bond. No surety may be indemnified through funds held by the principal

debtor in a fiduciary capacity.

(2) Security may be in any of the following forms:

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(a) deposits of money or other property of the principal debtor which can be held by a responsible

financial institution authorized by law to do that type of business, in a manner that prevents

withdrawal or alienation of the money or other property without the written consent of the

sureties or an order of a court of competent jurisdiction made after notice is given to the

sureties and a hearing is held as directed by the court; or

(b) security interests in real or personal property perfected under the laws of Utah.

(3) This section does not affect a surety's common-law right to reimbursement, subrogation, or

exoneration.

Amended by Chapter 218, 1987 General Session

31A-22-105 Common control of fiduciary funds permissible.

Any fiduciary from whom a bond, undertaking, or other obligation is required may agree and

arrange with his sureties for the deposit for safekeeping of any and all assets for which he is

responsible with a depository institution authorized by law to hold the assets, in a manner which

prevents the withdrawal or alienation of any part of the property without the written consent of

the sureties, or an order of the court made after notice is given to the sureties and a hearing is

held as directed by the court. This deposit agreement does not release or change the fiduciary

responsibility of the principal, or the liability of the principal or sureties as established under the

bond.

Enacted by Chapter 242, 1985 General Session

31A-22-106 Petition of fiduciary's surety to be relieved from liability.

Any surety securing others against losses caused by breach of duty by a fiduciary, herein called

"principal," may petition the court where the surety's obligation is filed or which has jurisdiction over

the principal, for an order relieving the surety from further liability for the acts or omissions of the

principal. This order may be issued only after the court is satisfied that the principal has accounted

to the petitioner and has obtained a new surety. The surety relieved from liability shall refund any

unearned part of the premium paid which the surety held as consideration for its promise to be

surety. To relieve a surety from liability, the court may order the principal to account, to obtain a

new surety, or to refrain from acting except to preserve property held in a fiduciary capacity.

Enacted by Chapter 242, 1985 General Session

31A-22-107 Bond premium allowable expense of fiduciary.

Any fiduciary required by law, or the court in providing a surety to secure the fiduciary's

performance, may include as part of the expense of executing the fiduciary responsibility a

reasonable premium paid to a surety for becoming the fiduciary's surety. However, the court may

not allow an expense allowance greater than the larger of 1% of the surety's maximum obligation

or $25.

Enacted by Chapter 242, 1985 General Session

Part 2

Liability Insurance in General

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31A-22-201 Required provisions of liability insurance policies.

Every liability insurance policy shall provide that the bankruptcy or insolvency of the insured

may not diminish any liability of the insurer to third parties, and that if execution against the insured

is returned unsatisfied, an action may be maintained against the insurer to the extent that the

liability is covered by the policy.

Enacted by Chapter 242, 1985 General Session

31A-22-202 Protection of third-party claimants.

(1) An insurance contract insuring against loss or damage through legal liability for the bodily injury

or death by accident of any person, or for damage to the property of any person, may not be

retroactively abrogated to the detriment of any third-party claimant by any agreement between

the insurer and insured after the occurrence of any injury, death, or damage for which the

insured may be liable. This attempted abrogation is void.

(2) A motor vehicle liability policy may be rescinded or cancelled as to an insured for fraud,

material misrepresentation, or any reason allowable under the law.

(3) A motor vehicle liability policy may not be rescinded for fraud or material misrepresentation, as

to minimum liability coverage limits under Section 31A-22-304, to the detriment of a third party

for a loss otherwise covered by the policy.

Amended by Chapter 138, 2016 General Session

31A-22-203 Notice and proof of loss.

Section 31A-21-312 applies to the notice required under liability policies. Subsection

31A-21-312(1) may not be construed to extend the normal provisions of any claims-made

coverage that required notice of an occurrence or claim prior to the expiration of the policy for

coverage to be in force.

Amended by Chapter 10, 1988 Special Session 2

31A-22-204 Restriction on limitation of coverage.

No insurer may limit coverage under a policy insuring against legal liability to claims that are first

made against the insured while the policy is in force, unless the policy contains on the cover page,

a conspicuous statement that the coverage of the policy is limited in that way.

Enacted by Chapter 242, 1985 General Session

31A-22-205 Applicability of restatement of law.

(1) A restatement of the law of liability insurance is not the law or public policy of this state if the

statement of law is inconsistent or in conflict with:

(a) the Constitution of the United States;

(b) the Utah Constitution;

(d) state case law; or

(e) state-adopted common law.

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(2) Nothing in this section precludes a court from referencing or considering a restatement or other

legal treatise.

Enacted by Chapter 32, 2020 General Session

Part 3

Motor Vehicle Insurance

Superseded 1/1/2025

31A-22-301 Definitions.

As used in this part:

(1) "Motor vehicle" means the same as that term is defined in Section 41-6a-102.

(2) "Motor vehicle business" means a motor vehicle sales agency, repair shop, service station,

storage garage, or public parking place.

(3) "Motor vehicle liability policy" means a policy which satisfies the requirements of Sections

31A-22-303 and 31A-22-304.

(4) "Occupying" means being in or on a motor vehicle as a passenger or operator, or being

engaged in the immediate acts of entering, boarding, or alighting from a motor vehicle.

(5) "Operator" means the same as that term is defined in Subsection 41-12a-103(7).

(6) "Owner" means the same as that term is defined in Subsection 41-12a-103(8).

(7) "Pedestrian" means any natural person not occupying a motor vehicle.

Amended by Chapter 245, 2021 General Session

Effective 1/1/2025

31A-22-301 Definitions.

As used in this part:

(1)

(a) "Motor vehicle" means the same as that term is defined in Section 41-6a-102.

(b) For purposes of this chapter, "motor vehicle" includes a street-legal all-terrain vehicle.

(2) "Motor vehicle business" means a motor vehicle sales agency, repair shop, service station,

storage garage, or public parking place.

(3) "Motor vehicle liability policy" means a policy which satisfies the requirements of Sections

31A-22-303 and 31A-22-304.

(4) "Motorboat" means the same as that term is defined in Section 73-18c-102.

(5) "Occupying" means being in or on a motor vehicle as a passenger or operator, or being

engaged in the immediate acts of entering, boarding, or alighting from a motor vehicle.

(6) "Operator" means the same as that term is defined in Subsection 41-12a-103(7).

(7) "Owner" means the same as that term is defined in Subsection 41-12a-103(8).

(8) "Pedestrian" means any natural person not occupying a motor vehicle.

(9) "Street-legal all-terrain vehicle" means the same as that term is defined in Section 41-6a-102.

Amended by Chapter 236, 2024 General Session

31A-22-302 Required components of motor vehicle insurance policies -- Exceptions.

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(1) Every policy of insurance or combination of policies purchased to satisfy the owner's or

operator's security requirement of Section 41-12a-301 shall include:

(a) motor vehicle liability coverage under Sections 31A-22-303 and 31A-22-304;

(b) uninsured motorist coverage under Section 31A-22-305, unless affirmatively waived under

Subsection 31A-22-305(5);

under Subsection 31A-22-305.3(3); and

(d) except as provided in Subsection (2) and subject to Subsection (4), personal injury protection

under Sections 31A-22-306 through 31A-22-309.

(2) A policy of insurance or combination of policies, purchased to satisfy the owner's or operator's

security requirement of Section 41-12a-301 for a motorcycle, off-highway vehicle, street-legal

all-terrain vehicle, trailer, or semitrailer is not required to have personal injury protection under

Sections 31A-22-306 through 31A-22-309.

(3) A card issued by an insurance company as evidence of owner's or operator's security under

Section 41-12a-303.2 on or after July 1, 2014, may not display the owner's or operator's

address on the card.

(4)

(a) First party medical coverages may be offered or included in policies issued to motorcycle, off-

highway vehicle, street-legal all-terrain vehicle, trailer, and semitrailer owners or operators.

(b) Owners and operators of motorcycles, off-highway vehicles, street-legal all-terrain vehicles,

trailers, and semitrailers are not covered by personal injury protection coverages in

connection with injuries incurred while operating any of these vehicles.

(5) First party medical coverage expenses shall be governed by the relative value study provisions

under Subsections 31A-22-307(2) and (3).

Amended by Chapter 91, 2013 General Session

31A-22-302.5 Named driver exclusions.

(1) A policy of personal lines insurance or combination of personal lines policies purchased

to satisfy the owner's or operator's security requirement under Section 41-12a-301 may

specifically exclude from coverage:

(a) a person who is a resident of the named insured's household, including a person who usually

makes the person's home in the same household but temporarily lives elsewhere; or

(b) a person who usually or customarily operates the motor vehicle.

(2) The named driver exclusion under Subsection (1) is effective only if:

(a) at the time of the proposed exclusion, each person excluded from coverage satisfies the

owner's or operator's security requirement under Section 41-12a-301, independently of the

named insured's proof of owner's or operator's security;

(b) any named insured and the person excluded from coverage each provide written consent to

the exclusion; and

insurance provided to an additional insured or loss payee.

(3) The provisions of Subsection (2)(a) do not apply to the named driver exclusion of the person

excluded from coverage if the person's driver license has been denied, suspended, or revoked.

(4) The named driver exclusion shall remain effective until removed by the insurer.

(5) If the driver license of a person excluded from coverage under Subsection (1) has been denied,

suspended, revoked, or disqualified and the person excluded from coverage subsequently

operates a motor vehicle, the exclusion shall:

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(a) exclude all liability coverage and all physical damage coverage without regard to the

comparative fault of the excluded driver;

(b) proportionately reduce any benefits otherwise payable to the person excluded from

coverage and to any named insured for benefits payable under uninsured motorist coverage,

underinsured motorist coverage, personal injury protection coverage, and first party medical

coverage to the extent the person excluded from coverage was comparatively at fault; and

the excluded driver and any named insured from recovering any benefits under any coverage

listed under Subsection (5)(b).

(6) The named driver exclusion under Subsection (1) does not apply when the person excluded

from coverage is:

(a) a non-driving passenger in a motor vehicle; or

(b) a pedestrian.

Amended by Chapter 425, 2011 General Session

31A-22-303 Motor vehicle liability coverage.

(1)

(a) In addition to complying with the requirements of Chapter 21, Insurance Contracts in General,

and Part 2, Liability Insurance in General, a policy of motor vehicle liability coverage under

Subsection 31A-22-302(1)(a) shall:

(i) name the motor vehicle owner or operator in whose name the policy was purchased, state

that named insured's address, the coverage afforded, the premium charged, the policy

period, and the limits of liability;

(ii)

(A) if it is an owner's policy, designate by appropriate reference all the motor vehicles on

which coverage is granted, insure the person named in the policy, insure any other person

using any named motor vehicle with the express or implied permission of the named

insured, and, except as provided in Section 31A-22-302.5, insure any person included in

Subsection (1)(a)(iii) against loss from the liability imposed by law for damages arising out

of the ownership, maintenance, or use of these motor vehicles within the United States

and Canada, subject to limits exclusive of interest and costs, for each motor vehicle, in

amounts not less than the minimum limits specified under Section 31A-22-304; or

(B) if it is an operator's policy, insure the person named as insured against loss from the

liability imposed upon him by law for damages arising out of the insured's use of any motor

vehicle not owned by him, within the same territorial limits and with the same limits of

liability as in an owner's policy under Subsection (1)(a)(ii)(A);

(iii) except as provided in Section 31A-22-302.5, insure persons related to the named insured

by blood, marriage, adoption, or guardianship who are residents of the named insured's

household, including those who usually make their home in the same household but

temporarily live elsewhere, to the same extent as the named insured;

(iv) where a claim is brought by the named insured or a person described in Subsection (1)(a)

(iii), the available coverage of the policy may not be reduced or stepped-down because:

(A) a permissive user driving a covered motor vehicle is at fault in causing an accident; or

(B) the named insured or any of the persons described in Subsection (1)(a)(iii) driving a

covered motor vehicle is at fault in causing an accident; and

(v) cover damages or injury resulting from a covered driver of a motor vehicle who is stricken

by an unforeseeable paralysis, seizure, or other unconscious condition and who is not

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reasonably aware that paralysis, seizure, or other unconscious condition is about to occur to

the extent that a person of ordinary prudence would not attempt to continue driving.

(b) The driver's liability under Subsection (1)(a)(v) is limited to the insurance coverage.

(c)

(i) "Guardianship" under Subsection (1)(a)(iii) includes the relationship between a foster parent

and a minor who is in the legal custody of the Division of Child and Family Services if:

(A) the minor resides in a foster home, as defined in Section 62A-2-101, with a foster parent

who is the named insured; and

(B) the foster parent has signed to be jointly and severally liable for compensatory damages

caused by the minor's operation of a motor vehicle in accordance with Section 53-3-211.

(ii) "Guardianship" as defined under this Subsection (1)(c) ceases to exist when a minor

described in Subsection (1)(c)(i)(A) is no longer a resident of the named insured's

household.

(2)

(a) A policy containing motor vehicle liability coverage under Subsection 31A-22-302(1)(a) may:

(i) provide for the prorating of the insurance under that policy with other valid and collectible

insurance;

(ii) grant any lawful coverage in addition to the required motor vehicle liability coverage;

(iii) if the policy is issued to a person other than a motor vehicle business, limit the coverage

afforded to a motor vehicle business or its officers, agents, or employees to the minimum

limits under Section 31A-22-304, and to those instances when there is no other valid and

collectible insurance with at least those limits, whether the other insurance is primary,

excess, or contingent; and

(iv) if issued to a motor vehicle business, restrict coverage afforded to anyone other than the

motor vehicle business or its officers, agents, or employees to the minimum limits under

Section 31A-22-304, and to those instances when there is no other valid and collectible

insurance with at least those limits, whether the other insurance is primary, excess, or

contingent.

(b)

(i) The liability insurance coverage of a permissive user of a motor vehicle owned by a motor

vehicle business shall be primary coverage.

(ii) The liability insurance coverage of a motor vehicle business shall be secondary to the

liability insurance coverage of a permissive user as specified under Subsection (2)(b)(i).

(3) Motor vehicle liability coverage need not insure any liability:

(a) under any workers' compensation law under Title 34A, Utah Labor Code;

(b) resulting from bodily injury to or death of an employee of the named insured, other than a

domestic employee, while engaged in the employment of the insured, or while engaged in the

operation, maintenance, or repair of a designated vehicle; or

insured.

(4) An insurance carrier providing motor vehicle liability coverage has the right to settle any claim

covered by the policy, and if the settlement is made in good faith, the amount of the settlement

is deductible from the limits of liability specified under Section 31A-22-304.

(5) A policy containing motor vehicle liability coverage imposes on the insurer the duty to defend,

in good faith, any person insured under the policy against any claim or suit seeking damages

which would be payable under the policy.

(6)

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(a) If a policy containing motor vehicle liability coverage provides an insurer with the defense

of lack of cooperation on the part of the insured, that defense is not effective against a third

person making a claim against the insurer, unless there was collusion between the third

person and the insured.

(b) If the defense of lack of cooperation is not effective against the claimant, after payment, the

insurer is subrogated to the injured person's claim against the insured to the extent of the

payment and is entitled to reimbursement by the insured after the injured third person has

been made whole with respect to the claim against the insured.

(7)

(a) A policy of motor vehicle coverage may limit coverage to the policy minimum limits under

Section 31A-22-304 if the policy or a specifically reduced premium was extended to the

insured upon express written declaration executed by the insured that the insured motor

vehicle would not be operated by a person described in Subsection (7)(c) operating in a

manner described in Subsection (7)(b)(i).

(b)

(i) A policy of motor vehicle liability coverage may limit coverage as described in Subsection (7)

(a) if the insured motor vehicle is operated by an individual described in Subsection (7)(c) if

the individual described in Subsection (7)(c) is guilty of:

(A) driving under the influence as described in Section 41-6a-502;

(B) impaired driving as described in Section 41-6a-502.5; or

described in Section 41-6a-517.

(ii) An individual's refusal to submit to a chemical test as described in Sections 41-6a-520 and

41-6a-520.1 is admissible evidence, but not conclusive, that the individual is guilty of an

offense described in Subsection (7)(b)(i).

(i) the insured;

(ii) the spouse of the insured; or

(iii) if the individual has a separate policy as a secondary source of coverage, and:

(A) the individual is over the age of 21 and resides in the household of the insured; or

(B) the individual is a permissible user of the motor vehicle.

(d) A reduction in coverage as described in Subsection (7)(a) does not apply to an individual

under the age of 21 who is a relative of the insured and a resident of the insured's household.

(8)

(a) When a claim is brought exclusively by a named insured or a person described in Subsection

(1)(a)(iii) and asserted exclusively against a named insured or an individual described in

Subsection (1)(a)(iii), the claimant may elect to resolve the claim:

(i) by submitting the claim to binding arbitration; or

(ii) through litigation.

(b) Once the claimant has elected to commence litigation under Subsection (8)(a)(ii), the claimant

may not elect to resolve the claim through binding arbitration under this section without the

written consent of both parties and the defendant's liability insurer.

(c)

(i) Unless otherwise agreed on in writing by the parties, a claim that is submitted to binding

arbitration under Subsection (8)(a)(i) shall be resolved by a panel of three arbitrators.

(ii) Unless otherwise agreed on in writing by the parties, each party shall select an arbitrator.

The arbitrators selected by the parties shall select a third arbitrator.

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(d) Unless otherwise agreed on in writing by the parties, each party will pay the fees and costs of

the arbitrator that party selects. Both parties shall share equally the fees and costs of the third

arbitrator.

(e) Except as otherwise provided in this section, an arbitration procedure conducted under this

section shall be governed by Title 78B, Chapter 11, Utah Uniform Arbitration Act, unless

otherwise agreed on in writing by the parties.

(f)

(i) Discovery shall be conducted in accordance with Rules 26b through 36, Utah Rules of Civil

Procedure.

(ii) All issues of discovery shall be resolved by the arbitration panel.

(g) A written decision of two of the three arbitrators shall constitute a final decision of the

arbitration panel.

(h) Prior to the rendering of the arbitration award:

(i) the existence of a liability insurance policy may be disclosed to the arbitration panel; and

(ii) the amount of all applicable liability insurance policy limits may not be disclosed to the

arbitration panel.

(i) The amount of the arbitration award may not exceed the liability limits of all the defendant's

applicable liability insurance policies, including applicable liability umbrella policies. If the

initial arbitration award exceeds the liability limits of all applicable liability insurance policies,

the arbitration award shall be reduced to an amount equal to the liability limits of all applicable

liability insurance policies.

(j) The arbitration award is the final resolution of all claims between the parties unless the award

was procured by corruption, fraud, or other undue means.

(k) If the arbitration panel finds that the action was not brought, pursued, or defended in good

faith, the arbitration panel may award reasonable fees and costs against the party that failed

to bring, pursue, or defend the claim in good faith.

(l) Nothing in this section is intended to limit any claim under any other portion of an applicable

insurance policy.

(9) An at-fault driver or an insurer issuing a policy of insurance under this part that is covering an

at-fault driver may not reduce compensation to an injured party based on the injured party not

being covered by a policy of insurance that provides personal injury protection coverage under

Sections 31A-22-306 through 31A-22-309.

Amended by Chapter 415, 2023 General Session

31A-22-304 Motor vehicle liability policy minimum limits.

(1) A policy issued or renewed on or before December 31, 2024, containing motor vehicle liability

coverage may not limit the insurer's liability under that coverage below the following:

(a)

(i) $25,000 because of liability for bodily injury to or death of one person, arising out of the use

of a motor vehicle in any one accident;

(ii) subject to the limit for one person in Subsection (1)(a)(i), in the amount of $65,000 because

of liability for bodily injury to or death of two or more persons arising out of the use of a

motor vehicle in any one accident; and

(iii) in the amount of $15,000 because of liability for injury to, or destruction of, property of

others arising out of the use of a motor vehicle in any one accident; or

(b) $80,000 in any one accident whether arising from bodily injury to or the death of others, or

from destruction of, or damage to, the property of others.

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(2) Subject to Subsection (3), a policy issued or renewed on or after January 1, 2025, containing

motor vehicle liability coverage may not limit the insurer's liability under that coverage below the

following:

(a)

(i) $30,000 because of liability for bodily injury to or death of one person, arising out of the use

of a motor vehicle in any one accident;

(ii) subject to the limit for one person in Subsection (2)(a)(i), in the amount of $65,000 because

of liability for bodily injury to or death of two or more persons arising out of the use of a

motor vehicle in any one accident; and

(iii) in the amount of $25,000 because of liability for injury to, or destruction of, property of

others arising out of the use of a motor vehicle in any one accident; or

(b) $90,000 in any one accident whether arising from bodily injury to or the death of others, or

from destruction of, or damage to, the property of others.

(3) Notwithstanding Subsection (2), for a policy for a self-insured, private rental fleet, the policy

containing motor vehicle liability coverage may not limit the insurer's liability under that

coverage below the following:

(a)

(i) $25,000 because of liability for bodily injury to or death of one person, arising out of the use

of a motor vehicle in any one accident;

(ii) subject to the limit for one person in Subsection (3)(a)(i), in the amount of $65,000 because

of liability for bodily injury to or death of two or more persons arising out of the use of a

motor vehicle in any one accident; and

(iii) in the amount of $15,000 because of liability for injury to, or destruction of, property of

others arising out of the use of a motor vehicle in any one accident; or

(b) $80,000 in any one accident whether arising from bodily injury to or the death of others, or

from destruction of, or damage to, the property of others.

Amended by Chapter 51, 2023 General Session

31A-22-305 Uninsured motorist coverage.

(1) As used in this section, "covered persons" includes:

(a) the named insured;

(b) for a claim arising on or after May 13, 2014, the named insured's dependent minor children;

residents of the named insured's household, including those who usually make their home in

the same household but temporarily live elsewhere;

(d) any person occupying or using a motor vehicle:

(i) referred to in the policy; or

(ii) owned by a self-insured; and

(e) any person who is entitled to recover damages against the owner or operator of the

uninsured or underinsured motor vehicle because of bodily injury to or death of persons under

Subsection (1)(a), (b), (c), or (d).

(2) As used in this section, "uninsured motor vehicle" includes:

(a)

(i) a motor vehicle, the operation, maintenance, or use of which is not covered under a liability

policy at the time of an injury-causing occurrence; or

(ii)

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(A) a motor vehicle covered with lower liability limits than required by Section 31A-22-304;

and

(B) the motor vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of the

deficiency;

(b) an unidentified motor vehicle that left the scene of an accident proximately caused by the

motor vehicle operator;

liability insurer for more than 60 days or continues to be disputed for more than 60 days; or

(d)

(i) an insured motor vehicle if, before or after the accident, the liability insurer of the motor

vehicle is declared insolvent by a court of competent jurisdiction; and

(ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent that the

claim against the insolvent insurer is not paid by a guaranty association or fund.

(3) Uninsured motorist coverage under Subsection 31A-22-302(1)(b) provides coverage for

covered persons who are legally entitled to recover damages from owners or operators of

uninsured motor vehicles because of bodily injury, sickness, disease, or death.

(4)

(a) For new policies written on or after January 1, 2001, the limits of uninsured motorist coverage

shall be equal to the lesser of the limits of the named insured's motor vehicle liability coverage

or the maximum uninsured motorist coverage limits available by the insurer under the named

insured's motor vehicle policy, unless a named insured rejects or purchases coverage in a

lesser amount by signing an acknowledgment form that:

(i) is filed with the department;

(ii) is provided by the insurer;

(iii) waives the higher coverage;

(iv) need only state in this or similar language that uninsured motorist coverage provides

benefits or protection to you and other covered persons for bodily injury resulting from

an accident caused by the fault of another party where the other party has no liability

insurance; and

(v) discloses the additional premiums required to purchase uninsured motorist coverage with

limits equal to the lesser of the limits of the named insured's motor vehicle liability coverage

or the maximum uninsured motorist coverage limits available by the insurer under the

named insured's motor vehicle policy.

(b) Any selection or rejection under this Subsection (4) continues for that issuer of the liability

coverage until the insured requests, in writing, a change of uninsured motorist coverage from

that liability insurer.

(c)

(i) Subsections (4)(a) and (b) apply retroactively to any claim arising on or after January

1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for

arbitration or filed a complaint in a court of competent jurisdiction.

(ii) The Legislature finds that the retroactive application of Subsections (4)(a) and (b) clarifies

legislative intent and does not enlarge, eliminate, or destroy vested rights.

(d) For purposes of this Subsection (4), "new policy" means:

(i) any policy that is issued which does not include a renewal or reinstatement of an existing

policy; or

(ii) a change to an existing policy that results in:

(A) a named insured being added to or deleted from the policy; or

(B) a change in the limits of the named insured's motor vehicle liability coverage.

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(e)

(i) As used in this Subsection (4)(e), "additional motor vehicle" means a change that increases

the total number of vehicles insured by the policy, and does not include replacement,

substitute, or temporary vehicles.

(ii) The adding of an additional motor vehicle to an existing personal lines or commercial lines

policy does not constitute a new policy for purposes of Subsection (4)(d).

(iii) If an additional motor vehicle is added to a personal lines policy where uninsured motorist

coverage has been rejected, or where uninsured motorist limits are lower than the named

insured's motor vehicle liability limits, the insurer shall provide a notice to a named insured

within 30 days that:

(A) in the same manner as described in Subsection (4)(a)(iv), explains the purpose of

uninsured motorist coverage; and

(B) encourages the named insured to contact the insurance company or insurance producer

for quotes as to the additional premiums required to purchase uninsured motorist

coverage with limits equal to the lesser of the limits of the named insured's motor vehicle

liability coverage or the maximum uninsured motorist coverage limits available by the

insurer under the named insured's motor vehicle policy.

(f) A change in policy number resulting from any policy change not identified under Subsection

(4)(d)(ii) does not constitute a new policy.

(g)

(i) Subsection (4)(d) applies retroactively to any claim arising on or after January 1, 2001, for

which, as of May 1, 2012, an insured has not made a written demand for arbitration or filed

a complaint in a court of competent jurisdiction.

(ii) The Legislature finds that the retroactive application of Subsection (4):

(A) does not enlarge, eliminate, or destroy vested rights; and

(B) clarifies legislative intent.

(h) A self-insured, including a governmental entity, may elect to provide uninsured motorist

coverage in an amount that is less than its maximum self-insured retention under Subsections

(4)(a) and (5)(a) by issuing a declaratory memorandum or policy statement from the chief

financial officer or chief risk officer that declares the:

(i) self-insured entity's coverage level; and

(ii) process for filing an uninsured motorist claim.

(i) Uninsured motorist coverage may not be sold with limits that are less than the minimum bodily

injury limits for motor vehicle liability policies under Section 31A-22-304.

(j) The acknowledgment under Subsection (4)(a) continues for that issuer of the uninsured

motorist coverage until the named insured requests, in writing, different uninsured motorist

coverage from the insurer.

(k)

(i) In conjunction with the first two renewal notices sent after January 1, 2001, for policies

existing on that date, the insurer shall disclose in the same medium as the premium renewal

notice, an explanation of:

(A) the purpose of uninsured motorist coverage in the same manner as described in

Subsection (4)(a)(iv); and

(B) a disclosure of the additional premiums required to purchase uninsured motorist coverage

with limits equal to the lesser of the limits of the named insured's motor vehicle liability

coverage or the maximum uninsured motorist coverage limits available by the insurer

under the named insured's motor vehicle policy.

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(ii) The disclosure required under Subsection (4)(k)(i) shall be sent to all named insureds that

carry uninsured motorist coverage limits in an amount less than the named insured's motor

vehicle liability policy limits or the maximum uninsured motorist coverage limits available by

the insurer under the named insured's motor vehicle policy.

(l) For purposes of this Subsection (4), a notice or disclosure sent to a named insured in a

household constitutes notice or disclosure to all insureds within the household.

(5)

(a)

(i) Except as provided in Subsection (5)(b), the named insured may reject uninsured motorist

coverage by an express writing to the insurer that provides liability coverage under

Subsection 31A-22-302(1)(a).

(ii) This rejection shall be on a form provided by the insurer that includes a reasonable

explanation of the purpose of uninsured motorist coverage.

(iii) This rejection continues for that issuer of the liability coverage until the insured in writing

requests uninsured motorist coverage from that liability insurer.

(b)

(i) All persons, including governmental entities, that are engaged in the business of, or that

accept payment for, transporting natural persons by motor vehicle, and all school districts

that provide transportation services for their students, shall provide coverage for all motor

vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,

uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.

(ii) This coverage is secondary to any other insurance covering an injured covered person.

(i) in order to avoid double recovery, does not cover any benefit under Title 34A, Chapter

2, Workers' Compensation Act, or Title 34A, Chapter 3, Utah Occupational Disease

Act, provided by the workers' compensation insurance carrier, uninsured employer, the

Uninsured Employers' Fund created in Section 34A-2-704, or the Employers' Reinsurance

Fund created in Section 34A-2-702, except that:

(A) the covered person is credited an amount described in Subsection 34A-2-106(5); and

(B) the benefits described in this Subsection (5)(c)(i) do not need to be paid before an

uninsured motorist claim may be pursued and resolved;

(ii) may not be subrogated by the workers' compensation insurance carrier, uninsured

employer, the Uninsured Employers' Fund created in Section 34A-2-704, or the Employers'

Reinsurance Fund created in Section 34A-2-702;

(iii) may not be reduced by any benefits provided by the workers' compensation insurance

carrier, uninsured employer, the Uninsured Employers' Fund created in Section 34A-2-704,

or the Employers' Reinsurance Fund created in Section 34A-2-702;

(iv) notwithstanding Subsection 31A-1-103(3)(f), may be reduced by health insurance

subrogation only after the covered person has been made whole;

(v) may not be collected for bodily injury or death sustained by a person:

(A) while committing a violation of Section 41-1a-1314;

(B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated in

violation of Section 41-1a-1314; or

(vi) notwithstanding Subsection (5)(c)(v), may be recovered:

(A) for a person under 18 years old who is injured within the scope of Subsection (5)(c)(v) but

limited to medical and funeral expenses; or

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(B) by a law enforcement officer as defined in Section 53-13-103, who is injured within the

course and scope of the law enforcement officer's duties.

(d) As used in this Subsection (5), "motor vehicle" means the same as that term is defined in

Section 41-1a-102.

(6) When a covered person alleges that an uninsured motor vehicle under Subsection (2)(b)

proximately caused an accident without touching the covered person or the motor vehicle

occupied by the covered person, the covered person shall show the existence of the uninsured

motor vehicle by clear and convincing evidence consisting of more than the covered person's

testimony.

(7)

(a) The limit of liability for uninsured motorist coverage for two or more motor vehicles may not be

added together, combined, or stacked to determine the limit of insurance coverage available

to an injured person for any one accident.

(b)

(i) Subsection (7)(a) applies to all persons except a covered person as defined under

Subsection (8)(b).

(ii) A covered person as defined under Subsection (8)(b)(ii) is entitled to the highest limits of

uninsured motorist coverage afforded for any one motor vehicle that the covered person is

the named insured or an insured family member.

(iii) This coverage shall be in addition to the coverage on the motor vehicle the covered person

is occupying.

(iv) Neither the primary nor the secondary coverage may be set off against the other.

and the coverage elected by a person described under Subsections (1)(a) through (c) shall be

secondary coverage.

(8)

(a) Uninsured motorist coverage under this section applies to bodily injury, sickness, disease,

or death of covered persons while occupying or using a motor vehicle only if the motor

vehicle is described in the policy under which a claim is made, or if the motor vehicle is a

newly acquired or replacement motor vehicle covered under the terms of the policy. Except

as provided in Subsection (7) or this Subsection (8), a covered person injured in a motor

vehicle described in a policy that includes uninsured motorist benefits may not elect to collect

uninsured motorist coverage benefits from any other motor vehicle insurance policy under

which the person is a covered person.

(b) Each of the following persons may also recover uninsured motorist benefits under any one

other policy in which they are described as a "covered person" as defined in Subsection (1):

(i) a covered person injured as a pedestrian by an uninsured motor vehicle; and

(ii) except as provided in Subsection (8)(c), a covered person injured while occupying or using a

motor vehicle that is not owned, leased, or furnished:

(A) to the covered person;

(B) to the covered person's spouse; or

(c)

(i) A covered person may recover benefits from no more than two additional policies, one

additional policy from each parent's household if the covered person is:

(A) a dependent minor of parents who reside in separate households; and

(B) injured while occupying or using a motor vehicle that is not owned, leased, or furnished:

(I) to the covered person;

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(II) to the covered person's resident parent; or

(III) to the covered person's resident sibling.

(ii) Each parent's policy under this Subsection (8)(c) is liable only for the percentage of the

damages that the limit of liability of each parent's policy of uninsured motorist coverage

bears to the total of both parents' uninsured coverage applicable to the accident.

(d) A covered person's recovery under any available policies may not exceed the full amount of

damages.

(e) A covered person in Subsection (8)(b) is not barred against making subsequent elections if

recovery is unavailable under previous elections.

(f)

(i) As used in this section, "interpolicy stacking" means recovering benefits for a single incident

of loss under more than one insurance policy.

(ii) Except to the extent permitted by Subsection (7) and this Subsection (8), interpolicy stacking

is prohibited for uninsured motorist coverage.

(9)

(a) When a claim is brought by a named insured or a person described in Subsection (1) and is

asserted against the covered person's uninsured motorist carrier, the claimant may elect to

resolve the claim:

(i) by submitting the claim to binding arbitration; or

(ii) through litigation.

(b) Unless otherwise provided in the policy under which uninsured benefits are claimed, the

election provided in Subsection (9)(a) is available to the claimant only, except that if the policy

under which insured benefits are claimed provides that either an insured or the insurer may

elect arbitration, the insured or the insurer may elect arbitration and that election to arbitrate

shall stay the litigation of the claim under Subsection (9)(a)(ii).

may not elect to resolve the claim through binding arbitration under this section without the

written consent of the uninsured motorist carrier.

(d) For purposes of the statute of limitations applicable to a claim described in Subsection (9)(a),

if the claimant does not elect to resolve the claim through litigation, the claim is considered

filed when the claimant submits the claim to binding arbitration in accordance with this

Subsection (9).

(e)

(i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to binding

arbitration under Subsection (9)(a)(i) shall be resolved by a single arbitrator.

(ii) All parties shall agree on the single arbitrator selected under Subsection (9)(e)(i).

(iii) If the parties are unable to agree on a single arbitrator as required under Subsection (9)(e)

(ii), the parties shall select a panel of three arbitrators.

(f) If the parties select a panel of three arbitrators under Subsection (9)(e)(iii):

(i) each side shall select one arbitrator; and

(ii) the arbitrators appointed under Subsection (9)(f)(i) shall select one additional arbitrator to be

included in the panel.

(g) Unless otherwise agreed to in writing:

(i) each party shall pay an equal share of the fees and costs of the arbitrator selected under

Subsection (9)(e)(i); or

(ii) if an arbitration panel is selected under Subsection (9)(e)(iii):

(A) each party shall pay the fees and costs of the arbitrator selected by that party; and

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(B) each party shall pay an equal share of the fees and costs of the arbitrator selected under

Subsection (9)(f)(ii).

(h) Except as otherwise provided in this section or unless otherwise agreed to in writing by the

parties, an arbitration proceeding conducted under this section shall be governed by Title

78B, Chapter 11, Utah Uniform Arbitration Act.

(i)

(i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f), 27 through

37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of Subsections

(10)(a) through (c) are satisfied.

(ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure shall be

determined based on the claimant's specific monetary amount in the written demand for

payment of uninsured motorist coverage benefits as required in Subsection (10)(a)(i)(A).

(iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to arbitration claims

under this part.

(j) All issues of discovery shall be resolved by the arbitrator or the arbitration panel.

(k) A written decision by a single arbitrator or by a majority of the arbitration panel shall constitute

a final decision.

(l)

(i) Except as provided in Subsection (10), the amount of an arbitration award may not exceed

the uninsured motorist policy limits of all applicable uninsured motorist policies, including

applicable uninsured motorist umbrella policies.

(ii) If the initial arbitration award exceeds the uninsured motorist policy limits of all applicable

uninsured motorist policies, the arbitration award shall be reduced to an amount equal to the

combined uninsured motorist policy limits of all applicable uninsured motorist policies.

(m) The arbitrator or arbitration panel may not decide the issues of coverage or extra-contractual

damages, including:

(i) whether the claimant is a covered person;

(ii) whether the policy extends coverage to the loss; or

(iii) any allegations or claims asserting consequential damages or bad faith liability.

(n) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or class-

representative basis.

(o) If the arbitrator or arbitration panel finds that the action was not brought, pursued, or defended

in good faith, the arbitrator or arbitration panel may award reasonable attorney fees and costs

against the party that failed to bring, pursue, or defend the claim in good faith.

(p) An arbitration award issued under this section shall be the final resolution of all claims not

excluded by Subsection (9)(m) between the parties unless:

(i) the award was procured by corruption, fraud, or other undue means; and

(ii) within 20 days after service of the arbitration award, a party:

(A) files a complaint requesting a trial de novo in a court with jurisdiction under Title 78A,

Judiciary and Judicial Administration; and

(B) serves the nonmoving party with a copy of the complaint requesting a trial de novo under

Subsection (9)(p)(ii)(A).

(q)

(i) Upon filing a complaint for a trial de novo under Subsection (9)(p), the claim shall proceed

through litigation in accordance with the Utah Rules of Civil Procedure and Utah Rules of

Evidence.

(ii) In accordance with Rule 38, Utah Rules of Civil Procedure, a party may request a jury trial

with a complaint requesting a trial de novo under Subsection (9)(p)(ii)(A).

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(r)

(i) If the claimant, as the moving party in a trial de novo requested under Subsection (9)

(p), does not obtain a verdict that is at least $5,000 and is at least 20% greater than the

arbitration award, the claimant is responsible for all of the nonmoving party's costs.

(ii) If the uninsured motorist carrier, as the moving party in a trial de novo requested under

Subsection (9)(p), does not obtain a verdict that is at least 20% less than the arbitration

award, the uninsured motorist carrier is responsible for all of the nonmoving party's costs.

(iii) Except as provided in Subsection (9)(r)(iv), the costs under this Subsection (9)(r) shall

include:

(A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and

(B) the costs of expert witnesses and depositions.

(iv) An award of costs under this Subsection (9)(r) may not exceed $2,500 unless Subsection

(10)(h)(iii) applies.

(s) For purposes of determining whether a party's verdict is greater or less than the arbitration

award under Subsection (9)(r), a court may not consider any recovery or other relief granted

on a claim for damages if the claim for damages:

(i) was not fully disclosed in writing prior to the arbitration proceeding; or

(ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil Procedure.

(t) If a court determines, upon a motion of the nonmoving party, that the moving party's use of the

trial de novo process was filed in bad faith in accordance with Section 78B-5-825, the court

may award reasonable attorney fees to the nonmoving party.

(u) Nothing in this section is intended to limit any claim under any other portion of an applicable

insurance policy.

(v) If there are multiple uninsured motorist policies, as set forth in Subsection (8), the claimant

may elect to arbitrate in one hearing the claims against all the uninsured motorist carriers.

(10)

(a) Within 30 days after a covered person elects to submit a claim for uninsured motorist benefits

to binding arbitration or files litigation, the covered person shall provide to the uninsured

motorist carrier:

(i) a written demand for payment of uninsured motorist coverage benefits, setting forth:

(A) subject to Subsection (10)(l), the specific monetary amount of the demand, including a

computation of the covered person's claimed past medical expenses, claimed past lost

wages, and the other claimed past economic damages; and

(B) the factual and legal basis and any supporting documentation for the demand;

(ii) a written statement under oath disclosing:

(A)

(I) the names and last known addresses of all health care providers who have rendered

health care services to the covered person that are material to the claims for which

uninsured motorist benefits are sought for a period of five years preceding the date

of the event giving rise to the claim for uninsured motorist benefits up to the time the

election for arbitration or litigation has been exercised; and

(II) the names and last known addresses of the health care providers who have rendered

health care services to the covered person, which the covered person claims are

immaterial to the claims for which uninsured motorist benefits are sought, for a period of

five years preceding the date of the event giving rise to the claim for uninsured motorist

benefits up to the time the election for arbitration or litigation has been exercised that

have not been disclosed under Subsection (10)(a)(ii)(A)(I);

(B)

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(I) the names and last known addresses of all health insurers or other entities to whom the

covered person has submitted claims for health care services or benefits material to

the claims for which uninsured motorist benefits are sought, for a period of five years

preceding the date of the event giving rise to the claim for uninsured motorist benefits up

to the time the election for arbitration or litigation has been exercised; and

(II) the names and last known addresses of the health insurers or other entities to whom

the covered person has submitted claims for health care services or benefits, which the

covered person claims are immaterial to the claims for which uninsured motorist benefits

are sought, for a period of five years preceding the date of the event giving rise to the

claim for uninsured motorist benefits up to the time the election for arbitration or litigation

have not been disclosed;

of the covered person for a period of five years preceding the date of the event giving rise

to the claim for uninsured motorist benefits up to the time the election for arbitration or

litigation has been exercised;

(D) other documents to reasonably support the claims being asserted; and

(E) all state and federal statutory lienholders including a statement as to whether the covered

person is a recipient of Medicare or Medicaid benefits or Utah Children's Health Insurance

Program benefits under Title 26B, Chapter 3, Part 9, Utah Children's Health Insurance

Program, or if the claim is subject to any other state or federal statutory liens; and

(iii) signed authorizations to allow the uninsured motorist carrier to only obtain records and

billings from the individuals or entities disclosed under Subsections (10)(a)(ii)(A)(I), (B)(I),

and (C).

(b)

(i) If the uninsured motorist carrier determines that the disclosure of undisclosed health care

providers or health care insurers under Subsection (10)(a)(ii) is reasonably necessary, the

uninsured motorist carrier may:

(A) make a request for the disclosure of the identity of the health care providers or health care

insurers; and

(B) make a request for authorizations to allow the uninsured motorist carrier to only obtain

records and billings from the individuals or entities not disclosed.

(ii) If the covered person does not provide the requested information within 10 days:

(A) the covered person shall disclose, in writing, the legal or factual basis for the failure to

disclose the health care providers or health care insurers; and

(B) either the covered person or the uninsured motorist carrier may request the arbitrator or

arbitration panel to resolve the issue of whether the identities or records are to be provided

if the covered person has elected arbitration.

(iii) The time periods imposed by Subsection (10)(c)(i) are tolled pending resolution of the

dispute concerning the disclosure and production of records of the health care providers or

health care insurers.

(c)

(i) An uninsured motorist carrier that receives an election for arbitration or a notice of filing

litigation and the demand for payment of uninsured motorist benefits under Subsection (10)

(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the demand and

receipt of the items specified in Subsections (10)(a)(i) through (iii), to:

(A) provide a written response to the written demand for payment provided for in Subsection

(10)(a)(i);

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(B) except as provided in Subsection (10)(c)(i)(C), tender the amount, if any, of the uninsured

motorist carrier's determination of the amount owed to the covered person; and

Health Insurance Program benefits under Title 26B, Chapter 3, Part 9, Utah Children's

Health Insurance Program, or if the claim is subject to any other state or federal statutory

liens, tender the amount, if any, of the uninsured motorist carrier's determination of the

amount owed to the covered person less:

(I) if the amount of the state or federal statutory lien is established, the amount of the lien; or

(II) if the amount of the state or federal statutory lien is not established, two times the

amount of the medical expenses subject to the state or federal statutory lien until such

time as the amount of the state or federal statutory lien is established.

(ii) If the amount tendered by the uninsured motorist carrier under Subsection (10)(c)(i) is the

total amount of the uninsured motorist policy limits, the tendered amount shall be accepted

by the covered person.

(d) A covered person who receives a written response from an uninsured motorist carrier as

provided for in Subsection (10)(c)(i), may:

(i) elect to accept the amount tendered in Subsection (10)(c)(i) as payment in full of all

uninsured motorist claims; or

(ii) elect to:

(A) accept the amount tendered in Subsection (10)(c)(i) as partial payment of all uninsured

motorist claims; and

(B) continue to litigate or arbitrate the remaining claim in accordance with the election made

under Subsections (9)(a) through (c).

(e) If a covered person elects to accept the amount tendered under Subsection (10)(c)(i) as

partial payment of all uninsured motorist claims, the final award obtained through arbitration,

litigation, or later settlement shall be reduced by any payment made by the uninsured motorist

carrier under Subsection (10)(c)(i).

(f) In an arbitration proceeding on the remaining uninsured claims:

(i) the parties may not disclose to the arbitrator or arbitration panel the amount paid under

Subsection (10)(c)(i) until after the arbitration award has been rendered; and

(ii) the parties may not disclose the amount of the limits of uninsured motorist benefits provided

by the policy.

(g) If the final award obtained through arbitration or litigation is greater than the average of the

covered person's initial written demand for payment provided for in Subsection (10)(a)(i) and

the uninsured motorist carrier's initial written response provided for in Subsection (10)(c)(i),

the uninsured motorist carrier shall pay:

(i) the final award obtained through arbitration or litigation, except that if the award exceeds the

policy limits of the subject uninsured motorist policy by more than $15,000, the amount shall

be reduced to an amount equal to the policy limits plus $15,000; and

(ii) any of the following applicable costs:

(A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;

(B) the arbitrator or arbitration panel's fee; and

evidence during arbitration or litigation.

(h)

(i) The covered person shall provide an affidavit of costs within five days of an arbitration

award.

(ii)

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(A) Objection to the affidavit of costs shall specify with particularity the costs to which the

uninsured motorist carrier objects.

(B) The objection shall be resolved by the arbitrator or arbitration panel.

(iii) The award of costs by the arbitrator or arbitration panel under Subsection (10)(g)(ii) may not

exceed $5,000.

(i)

(i) A covered person shall disclose all material information, other than rebuttal evidence, within

30 days after a covered person elects to submit a claim for uninsured motorist coverage

benefits to binding arbitration or files litigation as specified in Subsection (10)(a).

(ii) If the information under Subsection (10)(i)(i) is not disclosed, the covered person may not

recover costs or any amounts in excess of the policy under Subsection (10)(g).

(j) This Subsection (10) does not limit any other cause of action that arose or may arise against

the uninsured motorist carrier from the same dispute.

(k) The provisions of this Subsection (10) only apply to motor vehicle accidents that occur on or

after March 30, 2010.

(l)

(i)

(A) The written demand requirement in Subsection (10)(a)(i)(A) does not affect the covered

person's requirement to provide a computation of any other economic damages claimed,

and the one or more respondents shall have a reasonable time after the receipt of the

computation of any other economic damages claimed to conduct fact and expert discovery

as to any additional damages claimed.

(B) The changes made by Laws of Utah 2014, Chapter 290, Section 10, and

Chapter 300, Section 10, to this Subsection (10)(l) and Subsection (10)(a)(i)(A) apply to a

claim submitted to binding arbitration or through litigation on or after May 13, 2014.

(ii) The changes made by Laws of Utah 2014, Chapter 290, Section 10, and Chapter

300, Section 10, to Subsections (10)(a)(ii)(A)(II) and (B)(II) apply to any claim submitted to

binding arbitration or through litigation on or after May 13, 2014.

(11)

(a) A person shall commence an action on a written policy or contract for uninsured motorist

coverage within four years after the inception of loss.

(b) Subsection (11)(a) shall apply to all claims that have not been time barred by Subsection

31A-21-313(1)(a) as of May 14, 2019.

Amended by Chapter 158, 2024 General Session

31A-22-305.3 Underinsured motorist coverage.

(1) As used in this section:

(a) "Covered person" means the same as that term is defined in Section 31A-22-305.

(b)

(i) "Underinsured motor vehicle" includes a motor vehicle, the operation, maintenance, or use

of which is covered under a liability policy at the time of an injury-causing occurrence, but

which has insufficient liability coverage to compensate fully the injured party for all special

and general damages.

(ii) The term "underinsured motor vehicle" does not include:

(A) a motor vehicle that is covered under the liability coverage of the same policy that also

contains the underinsured motorist coverage;

(B) an uninsured motor vehicle as defined in Subsection 31A-22-305(2); or

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(I) a named insured;

(II) a named insured's spouse; or

(III) a dependent of a named insured.

(2)

(a) Underinsured motorist coverage under Subsection 31A-22-302(1)(c) provides coverage for a

covered person who is legally entitled to recover damages from an owner or operator of an

underinsured motor vehicle because of bodily injury, sickness, disease, or death.

(b) A covered person occupying or using a motor vehicle owned, leased, or furnished to the

covered person, the covered person's spouse, or covered person's resident relative may

recover underinsured benefits only if the motor vehicle is:

(i) described in the policy under which a claim is made; or

(ii) a newly acquired or replacement motor vehicle covered under the terms of the policy.

(3)

(a) For purposes of this Subsection (3), "new policy" means:

(i) any policy that is issued that does not include a renewal or reinstatement of an existing

policy; or

(ii) a change to an existing policy that results in:

(A) a named insured being added to or deleted from the policy; or

(B) a change in the limits of the named insured's motor vehicle liability coverage.

(b) For new policies written on or after January 1, 2001, the limits of underinsured motorist

coverage shall be equal to the lesser of the limits of the named insured's motor vehicle liability

coverage or the maximum underinsured motorist coverage limits available by the insurer

under the named insured's motor vehicle policy, unless a named insured rejects or purchases

coverage in a lesser amount by signing an acknowledgment form that:

(i) is filed with the department;

(ii) is provided by the insurer;

(iii) waives the higher coverage;

(iv) need only state in this or similar language that "underinsured motorist coverage provides

benefits or protection to you and other covered persons for bodily injury resulting from an

accident caused by the fault of another party where the other party has insufficient liability

insurance"; and

(v) discloses the additional premiums required to purchase underinsured motorist coverage with

limits equal to the lesser of the limits of the named insured's motor vehicle liability coverage

or the maximum underinsured motorist coverage limits available by the insurer under the

named insured's motor vehicle policy.

coverage until the insured requests, in writing, a change of underinsured motorist coverage

from that liability insurer.

(d)

(i) Subsections (3)(b) and (c) apply retroactively to any claim arising on or after January

1, 2001, for which, as of May 14, 2013, an insured has not made a written demand for

arbitration or filed a complaint in a court of competent jurisdiction.

(ii) The Legislature finds that the retroactive application of Subsections (3)(b) and (c) clarifies

legislative intent and does not enlarge, eliminate, or destroy vested rights.

(e)

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(i) As used in this Subsection (3)(e), "additional motor vehicle" means a change that increases

the total number of vehicles insured by the policy, and does not include replacement,

substitute, or temporary vehicles.

(ii) The adding of an additional motor vehicle to an existing personal lines or commercial lines

policy does not constitute a new policy for purposes of Subsection (3)(a).

(iii) If an additional motor vehicle is added to a personal lines policy where underinsured

motorist coverage has been rejected, or where underinsured motorist limits are lower than

the named insured's motor vehicle liability limits, the insurer shall provide a notice to a

named insured within 30 days that:

(A) in the same manner described in Subsection (3)(b)(iv), explains the purpose of

underinsured motorist coverage; and

(B) encourages the named insured to contact the insurance company or insurance producer

for quotes as to the additional premiums required to purchase underinsured motorist

coverage with limits equal to the lesser of the limits of the named insured's motor vehicle

liability coverage or the maximum underinsured motorist coverage limits available by the

insurer under the named insured's motor vehicle policy.

(f) A change in policy number resulting from any policy change not identified under Subsection

(3)(a)(ii) does not constitute a new policy.

(g)

(i) Subsection (3)(a) applies retroactively to any claim arising on or after January 1, 2001 for

which, as of May 1, 2012, an insured has not made a written demand for arbitration or filed

a complaint in a court of competent jurisdiction.

(ii) The Legislature finds that the retroactive application of Subsection (3)(a):

(A) does not enlarge, eliminate, or destroy vested rights; and

(B) clarifies legislative intent.

(h) A self-insured, including a governmental entity, may elect to provide underinsured motorist

coverage in an amount that is less than its maximum self-insured retention under Subsections

(3)(b) and (l) by issuing a declaratory memorandum or policy statement from the chief

financial officer or chief risk officer that declares the:

(i) self-insured entity's coverage level; and

(ii) process for filing an underinsured motorist claim.

(i) Underinsured motorist coverage may not be sold with limits that are less than:

(i) $10,000 for one person in any one accident; and

(ii) at least $20,000 for two or more persons in any one accident.

(j) An acknowledgment under Subsection (3)(b) continues for that issuer of the underinsured

motorist coverage until the named insured, in writing, requests different underinsured motorist

coverage from the insurer.

(k)

(i) The named insured's underinsured motorist coverage, as described in Subsection (2),

is secondary to the liability coverage of an owner or operator of an underinsured motor

vehicle, as described in Subsection (1).

(ii) Underinsured motorist coverage may not be set off against the liability coverage of the

owner or operator of an underinsured motor vehicle, but shall be added to, combined with,

or stacked upon the liability coverage of the owner or operator of the underinsured motor

vehicle to determine the limit of coverage available to the injured person.

(l)

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(i) In conjunction with the first two renewal notices sent after January 1, 2001, for policies

existing on that date, the insurer shall disclose in the same medium as the premium renewal

notice, an explanation of:

(A) the purpose of underinsured motorist coverage in the same manner as described in

Subsection (3)(b)(iv); and

(B) a disclosure of the additional premiums required to purchase underinsured motorist

coverage with limits equal to the lesser of the limits of the named insured's motor vehicle

liability coverage or the maximum underinsured motorist coverage limits available by the

insurer under the named insured's motor vehicle policy.

(ii) The disclosure required under this Subsection (3)(l) shall be sent to all named insureds that

carry underinsured motorist coverage limits in an amount less than the named insured's

motor vehicle liability policy limits or the maximum underinsured motorist coverage limits

available by the insurer under the named insured's motor vehicle policy.

(m) For purposes of this Subsection (3), a notice or disclosure sent to a named insured in a

household constitutes notice or disclosure to all insureds within the household.

(4)

(a)

(i) Except as provided in this Subsection (4), a covered person injured in a motor vehicle

described in a policy that includes underinsured motorist benefits may not elect to collect

underinsured motorist coverage benefits from another motor vehicle insurance policy.

(ii) The limit of liability for underinsured motorist coverage for two or more motor vehicles may

not be added together, combined, or stacked to determine the limit of insurance coverage

available to an injured person for any one accident.

(iii) Subsection (4)(a)(ii) applies to all persons except a covered person described under

Subsections (4)(b)(i) and (ii).

(b)

(i) A covered person injured as a pedestrian by an underinsured motor vehicle may recover

underinsured motorist benefits under any one other policy in which they are described as a

covered person.

(ii) Except as provided in Subsection (4)(b)(iii), a covered person injured while occupying,

using, or maintaining a motor vehicle that is not owned, leased, or furnished to the covered

person, the covered person's spouse, or the covered person's resident parent or resident

sibling, may also recover benefits under any one other policy under which the covered

person is also a covered person.

(iii)

(A) A covered person may recover benefits from no more than two additional policies, one

additional policy from each parent's household if the covered person is:

(I) a dependent minor of parents who reside in separate households; and

(II) injured while occupying or using a motor vehicle that is not owned, leased, or furnished

to the covered person, the covered person's resident parent, or the covered person's

resident sibling.

(B) Each parent's policy under this Subsection (4)(b)(iii) is liable only for the percentage of the

damages that the limit of liability of each parent's policy of underinsured motorist coverage

bears to the total of both parents' underinsured coverage applicable to the accident.

(iv) A covered person's recovery under any available policies may not exceed the full amount of

damages.

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(v) Underinsured coverage on a motor vehicle occupied at the time of an accident is

primary coverage, and the coverage elected by a person described under Subsections

31A-22-305(1)(a), (b), and (c) is secondary coverage.

(vi) The primary and the secondary coverage may not be set off against the other.

(vii) A covered person as described under Subsection (4)(b)(i) or is entitled to the highest

limits of underinsured motorist coverage under only one additional policy per household

applicable to that covered person as a named insured, spouse, or relative.

(viii) A covered injured person is not barred against making subsequent elections if recovery is

unavailable under previous elections.

(ix)

(A) As used in this section, "interpolicy stacking" means recovering benefits for a single

incident of loss under more than one insurance policy.

(B) Except to the extent permitted by this Subsection (4), interpolicy stacking is prohibited for

underinsured motorist coverage.

(i) in order to avoid double recovery, does not cover any benefit under Title 34A, Chapter

2, Workers' Compensation Act, or Title 34A, Chapter 3, Utah Occupational Disease

Act, provided by the workers' compensation insurance carrier, uninsured employer, the

Uninsured Employers' Fund created in Section 34A-2-704, or the Employers' Reinsurance

Fund created in Section 34A-2-702, except that:

(A) the covered person is credited an amount described in Subsection 34A-2-106(5); and

(B) the benefits described in this Subsection (4)(c)(i) do not need to be paid before an

underinsured motorist claim may be pursued and resolved.

(ii) may not be subrogated by a workers' compensation insurance carrier, uninsured

employer, the Uninsured Employers Fund created in Section 34A-2-704, or the Employers'

Reinsurance Fund created in Section 34A-2-702;

(iii) may not be reduced by benefits provided by the workers' compensation insurance carrier,

uninsured employer, the Uninsured Employers Fund created in Section 34A-2-704, or the

Employers' Reinsurance Fund created in Section 34A-2-702;

(iv) notwithstanding Subsection 31A-1-103(3)(f) may be reduced by health insurance

subrogation only after the covered person is made whole;

(v) may not be collected for bodily injury or death sustained by a person:

(A) while committing a violation of Section 41-1a-1314;

(B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated in

violation of Section 41-1a-1314; or

(vi) notwithstanding Subsection (4)(c)(v), may be recovered:

(A) for a person younger than 18 years old who is injured within the scope of Subsection (4)

(c)(v), but is limited to medical and funeral expenses; or

(B) by a law enforcement officer as defined in Section 53-13-103, who is injured within the

course and scope of the law enforcement officer's duties.

(5)

(a) Notwithstanding Section 31A-21-313, an action on a written policy or contract for

underinsured motorist coverage shall be commenced within four years after the inception of

loss.

(b) The inception of the loss under Subsection 31A-21-313(1) for underinsured motorist claims

occurs upon the date of the settlement check representing the last liability policy payment.

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(6) An underinsured motorist insurer does not have a right of reimbursement against a person

liable for the damages resulting from an injury-causing occurrence if the person's liability

insurer has tendered the policy limit and the limits have been accepted by the claimant.

(7) Except as otherwise provided in this section, a covered person may seek, subject to the terms

and conditions of the policy, additional coverage under any policy:

(a) that provides coverage for damages resulting from motor vehicle accidents; and

(b) that is not required to conform to Section 31A-22-302.

(8)

(a) When a claim is brought by a named insured or a person described in Subsection

31A-22-305(1) and is asserted against the covered person's underinsured motorist carrier, the

claimant may elect to resolve the claim:

(i) by submitting the claim to binding arbitration; or

(ii) through litigation.

(b) Unless otherwise provided in the policy under which underinsured benefits are claimed, the

election provided in Subsection (8)(a) is available to the claimant only, except that if the policy

under which insured benefits are claimed provides that either an insured or the insurer may

elect arbitration, the insured or the insurer may elect arbitration and that election to arbitrate

shall stay the litigation of the claim under Subsection (8)(a)(ii).

not elect to resolve the claim through binding arbitration under this section without the written

consent of the underinsured motorist coverage carrier.

(d) For purposes of the statute of limitations applicable to a claim described in Subsection (8)(a),

if the claimant does not elect to resolve the claim through litigation, the claim is considered

filed when the claimant submits the claim to binding arbitration in accordance with this

Subsection (8).

(e)

(i) Unless otherwise agreed to in writing by the parties, a claim that is submitted to binding

arbitration under Subsection (8)(a)(i) shall be resolved by a single arbitrator.

(ii) All parties shall agree on the single arbitrator selected under Subsection (8)(e)(i).

(iii) If the parties are unable to agree on a single arbitrator as required under Subsection (8)(e)

(ii), the parties shall select a panel of three arbitrators.

(f) If the parties select a panel of three arbitrators under Subsection (8)(e)(iii):

(i) each side shall select one arbitrator; and

(ii) the arbitrators appointed under Subsection (8)(f)(i) shall select one additional arbitrator to be

included in the panel.

(g) Unless otherwise agreed to in writing:

(i) each party shall pay an equal share of the fees and costs of the arbitrator selected under

Subsection (8)(e)(i); or

(ii) if an arbitration panel is selected under Subsection (8)(e)(iii):

(A) each party shall pay the fees and costs of the arbitrator selected by that party; and

(B) each party shall pay an equal share of the fees and costs of the arbitrator selected under

Subsection (8)(f)(ii).

(h) Except as otherwise provided in this section or unless otherwise agreed to in writing by the

parties, an arbitration proceeding conducted under this section is governed by Title 78B,

Chapter 11, Utah Uniform Arbitration Act.

(i)

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(i) The arbitration shall be conducted in accordance with Rules 26(a)(4) through (f), 27 through

37, 54, and 68 of the Utah Rules of Civil Procedure, once the requirements of Subsections

(9)(a) through (c) are satisfied.

(ii) The specified tier as defined by Rule 26(c)(3) of the Utah Rules of Civil Procedure shall be

determined based on the claimant's specific monetary amount in the written demand for

payment of uninsured motorist coverage benefits as required in Subsection (9)(a)(i)(A).

(iii) Rules 26.1 and 26.2 of the Utah Rules of Civil Procedure do not apply to arbitration claims

under this part.

(j) An issue of discovery shall be resolved by the arbitrator or the arbitration panel.

(k) A written decision by a single arbitrator or by a majority of the arbitration panel constitutes a

final decision.

(l)

(i) Except as provided in Subsection (9), the amount of an arbitration award may not exceed the

underinsured motorist policy limits of all applicable underinsured motorist policies, including

applicable underinsured motorist umbrella policies.

(ii) If the initial arbitration award exceeds the underinsured motorist policy limits of all applicable

underinsured motorist policies, the arbitration award shall be reduced to an amount equal

to the combined underinsured motorist policy limits of all applicable underinsured motorist

policies.

(m) The arbitrator or arbitration panel may not decide an issue of coverage or extra-contractual

damages, including:

(i) whether the claimant is a covered person;

(ii) whether the policy extends coverage to the loss; or

(iii) an allegation or claim asserting consequential damages or bad faith liability.

(n) The arbitrator or arbitration panel may not conduct arbitration on a class-wide or class-

representative basis.

(o) If the arbitrator or arbitration panel finds that the arbitration is not brought, pursued, or

defended in good faith, the arbitrator or arbitration panel may award reasonable attorney fees

and costs against the party that failed to bring, pursue, or defend the arbitration in good faith.

(p) An arbitration award issued under this section shall be the final resolution of all claims not

excluded by Subsection (8)(m) between the parties unless:

(i) the award is procured by corruption, fraud, or other undue means; or

(ii) either party, within 20 days after service of the arbitration award:

(A) files a complaint requesting a trial de novo in the a court with jurisdiction under Title 78A,

Judiciary and Judicial Administration; and

(B) serves the nonmoving party with a copy of the complaint requesting a trial de novo under

Subsection (8)(p)(ii)(A).

(q)

(i) Upon filing a complaint for a trial de novo under Subsection (8)(p), a claim shall proceed

through litigation in accordance with the Utah Rules of Civil Procedure and Utah Rules of

Evidence.

(ii) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may request a jury

trial with a complaint requesting a trial de novo under Subsection (8)(p)(ii)(A).

(r)

(i) If the claimant, as the moving party in a trial de novo requested under Subsection (8)

(p), does not obtain a verdict that is at least $5,000 and is at least 20% greater than the

arbitration award, the claimant is responsible for all of the nonmoving party's costs.

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(ii) If the underinsured motorist carrier, as the moving party in a trial de novo requested under

Subsection (8)(p), does not obtain a verdict that is at least 20% less than the arbitration

award, the underinsured motorist carrier is responsible for all of the nonmoving party's

costs.

(iii) Except as provided in Subsection (8)(r)(iv), the costs under this Subsection (8)(r) shall

include:

(A) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure; and

(B) the costs of expert witnesses and depositions.

(iv) An award of costs under this Subsection (8)(r) may not exceed $2,500 unless Subsection

(9)(h)(iii) applies.

(s) For purposes of determining whether a party's verdict is greater or less than the arbitration

award under Subsection (8)(r), a court may not consider any recovery or other relief granted

on a claim for damages if the claim for damages:

(i) was not fully disclosed in writing prior to the arbitration proceeding; or

(ii) was not disclosed in response to discovery contrary to the Utah Rules of Civil Procedure.

(t) If a court determines, upon a motion of the nonmoving party, that a moving party's use of the

trial de novo process is filed in bad faith in accordance with Section 78B-5-825, the court may

award reasonable attorney fees to the nonmoving party.

(u) Nothing in this section is intended to limit a claim under another portion of an applicable

insurance policy.

(v) If there are multiple underinsured motorist policies, as set forth in Subsection (4), the claimant

may elect to arbitrate in one hearing the claims against all the underinsured motorist carriers.

(9)

(a) Within 30 days after a covered person elects to submit a claim for underinsured motorist

benefits to binding arbitration or files litigation, the covered person shall provide to the

underinsured motorist carrier:

(i) a written demand for payment of underinsured motorist coverage benefits, setting forth:

(A) subject to Subsection (9)(l), the specific monetary amount of the demand, including a

computation of the covered person's claimed past medical expenses, claimed past lost

wages, and all other claimed past economic damages; and

(B) the factual and legal basis and any supporting documentation for the demand;

(ii) a written statement under oath disclosing:

(A)

(I) the names and last known addresses of all health care providers who have rendered

health care services to the covered person that are material to the claims for which the

underinsured motorist benefits are sought for a period of five years preceding the date

of the event giving rise to the claim for underinsured motorist benefits up to the time the

election for arbitration or litigation has been exercised; and

(II) the names and last known addresses of the health care providers who have rendered

health care services to the covered person, which the covered person claims are

immaterial to the claims for which underinsured motorist benefits are sought, for a period

of five years preceding the date of the event giving rise to the claim for underinsured

motorist benefits up to the time the election for arbitration or litigation has been exercised

that have not been disclosed under Subsection (9)(a)(ii)(A)(I);

(B)

(I) the names and last known addresses of all health insurers or other entities to whom the

covered person has submitted claims for health care services or benefits material to the

claims for which underinsured motorist benefits are sought, for a period of five years

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preceding the date of the event giving rise to the claim for underinsured motorist benefits

up to the time the election for arbitration or litigation has been exercised; and

(II) the names and last known addresses of the health insurers or other entities to whom

the covered person has submitted claims for health care services or benefits, which

the covered person claims are immaterial to the claims for which underinsured motorist

benefits are sought, for a period of five years preceding the date of the event giving rise

to the claim for underinsured motorist benefits up to the time the election for arbitration

or litigation have not been disclosed;

of the covered person for a period of five years preceding the date of the event giving rise

to the claim for underinsured motorist benefits up to the time the election for arbitration or

litigation has been exercised;

(D) other documents to reasonably support the claims being asserted; and

(E) all state and federal statutory lienholders including a statement as to whether the covered

person is a recipient of Medicare or Medicaid benefits or Utah Children's Health Insurance

Program benefits under Title 26B, Chapter 3, Part 9, Utah Children's Health Insurance

Program, or if the claim is subject to any other state or federal statutory liens; and

(iii) signed authorizations to allow the underinsured motorist carrier to only obtain records and

billings from the individuals or entities disclosed under Subsections (9)(a)(ii)(A)(I), (B)(I), and

(C).

(b)

(i) If the underinsured motorist carrier determines that the disclosure of undisclosed health care

providers or health care insurers under Subsection (9)(a)(ii) is reasonably necessary, the

underinsured motorist carrier may:

(A) make a request for the disclosure of the identity of the health care providers or health care

insurers; and

(B) make a request for authorizations to allow the underinsured motorist carrier to only obtain

records and billings from the individuals or entities not disclosed.

(ii) If the covered person does not provide the requested information within 10 days:

(A) the covered person shall disclose, in writing, the legal or factual basis for the failure to

disclose the health care providers or health care insurers; and

(B) either the covered person or the underinsured motorist carrier may request the arbitrator

or arbitration panel to resolve the issue of whether the identities or records are to be

provided if the covered person has elected arbitration.

(iii) The time periods imposed by Subsection (9)(c)(i) are tolled pending resolution of the

dispute concerning the disclosure and production of records of the health care providers or

health care insurers.

(c)

(i) An underinsured motorist carrier that receives an election for arbitration or a notice of filing

litigation and the demand for payment of underinsured motorist benefits under Subsection

(9)(a)(i) shall have a reasonable time, not to exceed 60 days from the date of the demand

and receipt of the items specified in Subsections (9)(a)(i) through (iii), to:

(A) provide a written response to the written demand for payment provided for in Subsection

(9)(a)(i);

(B) except as provided in Subsection (9)(c)(i)(C), tender the amount, if any, of the

underinsured motorist carrier's determination of the amount owed to the covered person;

and

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Health Insurance Program benefits under Title 26B, Chapter 3, Part 9, Utah Children's

Health Insurance Program, or if the claim is subject to any other state or federal statutory

liens, tender the amount, if any, of the underinsured motorist carrier's determination of the

amount owed to the covered person less:

(I) if the amount of the state or federal statutory lien is established, the amount of the lien; or

(II) if the amount of the state or federal statutory lien is not established, two times the

amount of the medical expenses subject to the state or federal statutory lien until such

time as the amount of the state or federal statutory lien is established.

(ii) If the amount tendered by the underinsured motorist carrier under Subsection (9)(c)(i) is

the total amount of the underinsured motorist policy limits, the tendered amount shall be

accepted by the covered person.

(d) A covered person who receives a written response from an underinsured motorist carrier as

provided for in Subsection (9)(c)(i), may:

(i) elect to accept the amount tendered in Subsection (9)(c)(i) as payment in full of all

underinsured motorist claims; or

(ii) elect to:

(A) accept the amount tendered in Subsection (9)(c)(i) as partial payment of all underinsured

motorist claims; and

(B) continue to litigate or arbitrate the remaining claim in accordance with the election made

under Subsections (8)(a) through (c).

(e) If a covered person elects to accept the amount tendered under Subsection (9)(c)(i) as partial

payment of all underinsured motorist claims, the final award obtained through arbitration,

litigation, or later settlement shall be reduced by any payment made by the underinsured

motorist carrier under Subsection (9)(c)(i).

(f) In an arbitration proceeding on the remaining underinsured claims:

(i) the parties may not disclose to the arbitrator or arbitration panel the amount paid under

Subsection (9)(c)(i) until after the arbitration award has been rendered; and

(ii) the parties may not disclose the amount of the limits of underinsured motorist benefits

provided by the policy.

(g) If the final award obtained through arbitration or litigation is greater than the average of the

covered person's initial written demand for payment provided for in Subsection (9)(a)(i) and

the underinsured motorist carrier's initial written response provided for in Subsection (9)(c)(i),

the underinsured motorist carrier shall pay:

(i) the final award obtained through arbitration or litigation, except that if the award exceeds the

policy limits of the subject underinsured motorist policy by more than $15,000, the amount

shall be reduced to an amount equal to the policy limits plus $15,000; and

(ii) any of the following applicable costs:

(A) any costs as set forth in Rule 54(d), Utah Rules of Civil Procedure;

(B) the arbitrator or arbitration panel's fee; and

evidence during arbitration or litigation.

(h)

(i) The covered person shall provide an affidavit of costs within five days of an arbitration

award.

(ii)

(A) Objection to the affidavit of costs shall specify with particularity the costs to which the

underinsured motorist carrier objects.

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(B) The objection shall be resolved by the arbitrator or arbitration panel.

(iii) The award of costs by the arbitrator or arbitration panel under Subsection (9)(g)(ii) may not

exceed $5,000.

(i)

(i) A covered person shall disclose all material information, other than rebuttal evidence, within

30 days after a covered person elects to submit a claim for underinsured motorist coverage

benefits to binding arbitration or files litigation as specified in Subsection (9)(a).

(ii) If the information under Subsection (9)(i)(i) is not disclosed, the covered person may not

recover costs or any amounts in excess of the policy under Subsection (9)(g).

(j) This Subsection (9) does not limit any other cause of action that arose or may arise against

the underinsured motorist carrier from the same dispute.

(k) The provisions of this Subsection (9) only apply to motor vehicle accidents that occur on or

after March 30, 2010.

(l)

(i) The written demand requirement in Subsection (9)(a)(i)(A) does not affect the covered

person's requirement to provide a computation of any other economic damages claimed,

and the one or more respondents shall have a reasonable time after the receipt of the

computation of any other economic damages claimed to conduct fact and expert discovery

as to any additional damages claimed. The changes made by Laws of Utah 2014, Chapter

290, Section 11, and Chapter 300, Section 11, to this Subsection (9)(l) and Subsection (9)

(a)(i)(A) apply to a claim submitted to binding arbitration or through litigation on or after May

13, 2014.

(ii) The changes made by Laws of Utah 2014, Chapter 290, Section 11, and Chapter

300, Section 11, under Subsections (9)(a)(ii)(A)(II) and (B)(II) apply to a claim submitted to

binding arbitration or through litigation on or after May 13, 2014.

Amended by Chapter 158, 2024 General Session

31A-22-305.5 Uninsured motorist property damage coverage -- Coverage limitations.

(1)

(a) At the request of the named insured, every motor vehicle liability policy of insurance under

Sections 31A-22-303 and 31A-22-304 or combination of policies purchased to satisfy the

owner's or operator's security requirement of Section 41-12a-301 which policy does not

provide insurance for collision damage shall provide uninsured motorist property damage

coverage for property damage to the motor vehicle described in the policy.

(b) The uninsured motorist property damage coverage provided under Subsection (1)(a) shall

be for the benefit of covered persons, as defined under Section 31A-22-305, who are legally

entitled to recover damages:

(i) from the owner or operator of an uninsured motor vehicle, as defined under Subsections

31A-22-305(2)(a), (c), and (d); and

(ii) arising out of the operation, maintenance, or use of an uninsured motor vehicle.

(2)

(a) Except as provided under Subsection (5), the coverage provided under this section shall

include payment for loss or damage to the motor vehicle described in the policy, not to

exceed the motor vehicle's actual cash value or $3,500, whichever is less.

(b) Property damage does not include compensation for loss of use of the motor vehicle.

(3) The coverage provided under this section shall be payable only if:

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(a) the occurrence causing the property damage involves actual physical contact between the

covered motor vehicle and an uninsured motor vehicle;

(b) the owner, operator, or license plate number of the uninsured motor vehicle is identified; and

his agent.

(4) Except as provided under Subsection (5), the coverage provided under this section shall be

subject to a $250 deductible and shall be excess to any other insurance covering property

damage to the motor vehicle described in the policy.

(5) The insurer providing coverage under this section may, at appropriate premium rates, make

available additional:

(a) coverage above the limits provided under Subsection (2); and

(b) deductibles for the coverage under Subsection (5)(a) above the limits provided under

Subsection (4).

(6) A rating surcharge may not be applied to any policy of motor vehicle insurance issued in this

state as a result of payment of a claim made under this section.

Amended by Chapter 37, 2005 General Session

31A-22-306 Personal injury protection.

Personal injury protection under Subsection 31A-22-302(2) provides the coverages and benefits

described under Section 31A-22-307 to persons described under Section 31A-22-308, but is

subject to the limitations, exclusions, and conditions set forth in Section 31A-22-309.

Amended by Chapter 204, 1986 General Session

31A-22-307 Personal injury protection coverages and benefits.

(1) Personal injury protection coverages and benefits include:

(a) up to the minimum amount required coverage of not less than $3,000 per person, the

reasonable value of all expenses for necessary:

(i) medical services;

(ii) surgical services;

(iii) X-ray services;

(iv) dental services;

(v) rehabilitation services, including prosthetic devices;

(vi) ambulance services;

(vii) hospital services; and

(viii) nursing services;

(b)

(i) the lesser of $250 per week or 85% of any loss of gross income and loss of earning capacity

per person from inability to work, for a maximum of 52 consecutive weeks after the loss,

except that this benefit need not be paid for the first three days of disability, unless the

disability continues for longer than two consecutive weeks after the date of injury; and

(ii) a special damage allowance not exceeding $20 per day for a maximum of 365 days, for

services actually rendered or expenses reasonably incurred for services that, but for the

injury, the injured person would have performed for the injured person's household, except

that this benefit need not be paid for the first three days after the date of injury unless the

person's inability to perform these services continues for more than two consecutive weeks;

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(d) compensation on account of death of a person, payable to the person's heirs, in the total of

$3,000.

(2)

(a)

(i) To determine the reasonable value of the medical expenses provided for in Subsection (1)

and under Subsection 31A-22-309(1)(a)(vi), the commissioner shall conduct a relative value

study of services and accommodations for the diagnosis, care, recovery, or rehabilitation

of an injured person in the most populous county in the state to assign a unit value and

determine the 75th percentile charge for each type of service and accommodation.

(ii) The relative value study shall be updated every other year.

(iii) In conducting the relative value study, the department may consult or contract with

appropriate public and private medical and health agencies or other technical experts.

(iv) The costs and expenses incurred in conducting, maintaining, and administering the relative

value study shall be funded by the tax created under Section 59-9-105.

(v) Upon completion of the relative value study, the department shall prepare and publish a

relative value study which sets forth the unit value and the 75th percentile charge assigned

to each type of service and accommodation.

(b)

(i) The reasonable value of any service or accommodation is determined by applying the unit

value and the 75th percentile charge assigned to the service or accommodation under the

relative value study.

(ii) If a service or accommodation is not assigned a unit value or the 75th percentile charge

under the relative value study, the value of the service or accommodation shall equal the

reasonable cost of the same or similar service or accommodation in the most populous

county of this state.

established or a schedule prepared by persons outside the department, if it meets the

requirements of this Subsection (2).

(d) Every insurer shall report to the commissioner any pattern of overcharging, excessive

treatment, or other improper actions by a health provider within 30 days after the day on

which the insurer has knowledge of the pattern.

(e)

(i) In disputed cases, a court on its own motion or on the motion of either party, may designate

an impartial medical panel of not more than three licensed physicians to examine the

claimant and testify on the issue of the reasonable value of the claimant's medical services

or expenses.

(ii) An impartial medical panel designated under Subsection (2)(e)(i) shall consist of a majority

of health care professionals within the same license classification and specialty as the

provider of the claimant's medical services or expenses.

(3) Medical expenses as provided for in Subsection (1)(a) and in Subsection 31A-22-309(1)(a)(vi)

include expenses for any nonmedical remedial care and treatment rendered in accordance with

a recognized religious method of healing.

(4) The insured may waive for the named insured and the named insured's spouse only the loss of

gross income benefits of Subsection (1)(b)(i) if the insured states in writing that:

(a) within 31 days of applying for coverage, neither the insured nor the insured's spouse received

any earned income from regular employment; and

(b) for at least 180 days from the date of the writing and during the period of insurance, neither

the insured nor the insured's spouse will receive earned income from regular employment.

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(5) This section does not:

(a) prohibit the issuance of a policy of insurance providing coverages greater than the minimum

coverage required under this chapter; or

(b) require the segregation of those minimum coverages from other coverages in the same

policy.

(6) Deductibles are not permitted with respect to the insurance coverages required under this

section.

(7)

(a) A person shall bring an action on a written policy or contract for personal injury protection

coverage within four years after the inception of loss.

(b) This Subsection (7) applies to a claim that is not time barred by Subsection 31A-21-313(1)(a)

as of May 3, 2023.

Amended by Chapter 185, 2023 General Session

31A-22-308 Persons covered by personal injury protection.

The following may receive benefits under personal injury protection coverage:

(1) the named insured, when injured in an accident involving any motor vehicle, regardless of

whether the accident occurs in this state, the United States, its territories or possessions, or

Canada, except where the injury is the result of the use or operation of the named insured's

own motor vehicle not actually insured under the policy;

(2) persons related to the insured by blood, marriage, adoption, or guardianship who are residents

of the insured's household, including those who usually make their home in the same

household but temporarily live elsewhere under the circumstances described in Section (1),

except where the person is injured as a result of the use or operation of his own motor vehicle

not insured under the policy; and

(3) any other natural person whose injuries arise out of an automobile accident occurring while the

person occupies a motor vehicle described in the policy with the express or implied consent

of the named insured or while a pedestrian if he is injured in an accident occurring in Utah

involving the described motor vehicle.

Amended by Chapter 327, 1990 General Session

31A-22-309 Limitations, exclusions, and conditions to personal injury protection.

(1)

(a) A person who has or is required to have direct benefit coverage under a policy which includes

personal injury protection may not maintain a cause of action for general damages arising out

of personal injuries alleged to have been caused by an automobile accident, except where the

person has sustained one or more of the following:

(i) death;

(ii) dismemberment;

(iii) permanent disability or permanent impairment based upon objective findings;

(iv) permanent disfigurement;

(v) a bone fracture; or

(vi) medical expenses to a person in excess of $3,000.

(b) Subsection (1)(a) does not apply to a person making an uninsured motorist claim.

(2)

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(a) Any insurer issuing personal injury protection coverage under this part may only exclude from

this coverage benefits:

(i) for any injury sustained by the insured while occupying another motor vehicle owned by or

furnished for the regular use of the insured or a resident family member of the insured and

not insured under the policy;

(ii) for any injury sustained by any person while operating the insured motor vehicle without the

express or implied consent of the insured or while not in lawful possession of the insured

motor vehicle;

(iii) to any injured person, if the person's conduct contributed to the person's injury:

(A) by intentionally causing injury to the person; or

(B) while committing a felony;

(iv) for any injury sustained by any person arising out of the use of any motor vehicle while

located for use as a residence or premises;

(v) for any injury due to war, whether or not declared, civil war, insurrection, rebellion or

revolution, or to any act or condition incident to any of the foregoing; or

(vi) for any injury resulting from the radioactive, toxic, explosive, or other hazardous properties

of nuclear materials.

(b) This Subsection (2) does not limit the exclusions that may be contained in other types of

coverage.

(3) The benefits payable to any injured person under Section 31A-22-307 are reduced by:

(a) any benefits which that person receives or is entitled to receive as a result of an accident

covered in this code under any workers' compensation or similar statutory plan; and

(b) any amounts which that person receives or is entitled to receive from the United States or any

of its agencies because that person is on active duty in the military service.

(4) When a person injured is also an insured party under any other policy, including those policies

complying with this part, primary coverage is given by the policy insuring the motor vehicle in

use during the accident.

(5)

(a) Payment of the benefits provided for in Section 31A-22-307 shall be made on a monthly basis

as expenses are incurred.

(b) Benefits for any period are overdue if they are not paid within 30 days after the insurer

receives reasonable proof of the fact and amount of expenses incurred during the period. If

reasonable proof is not supplied as to the entire claim, the amount supported by reasonable

proof is overdue if not paid within 30 days after that proof is received by the insurer. Any part

or all of the remainder of the claim that is later supported by reasonable proof is also overdue

if not paid within 30 days after the proof is received by the insurer.

rate of 1-1/2% per month after the due date.

(d) The person entitled to the benefits may bring an action in contract to recover the expenses

plus the applicable interest. If the insurer is required by the action to pay any overdue benefits

and interest, the insurer is also required to pay a reasonable attorney's fee to the claimant.

(6)

(a) Except as provided in Subsection (6)(b), every policy providing personal injury protection

coverage is subject to the following:

(i) that where the insured under the policy is or would be held legally liable for the personal

injuries sustained by any person to whom benefits required under personal injury protection

have been paid by another insurer, the insurer of the person who would be held legally

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liable shall reimburse the other insurer for the payment, but not in excess of the amount of

damages recoverable; and

(ii) that the issue of liability for that reimbursement and its amount shall be decided by

mandatory, binding arbitration between the insurers.

(b) There shall be no right of reimbursement between insurers under Subsection (6)(a) if the

insurer of the person who would be held legally liable for the personal injuries sustained has

tendered its policy limit.

(c)

(i) If the insurer of the person who would be held legally liable for the personal injuries

sustained reimburses a no-fault insurer prior to settling a third party liability claim with an

injured person and subsequently determines that some or all of the reimbursed amount

is needed to settle a third party claim, the insurer of the person who would be held legally

liable for the personal injuries sustained shall provide written notice to the no-fault insurer

that some or all of the reimbursed amount is needed to settle a third party liability claim.

(ii) The written notice described under Subsection (6)(c)(i) shall:

(A) identify the amount of the reimbursement that is needed to settle a third party liability

claim;

(B) provide notice to the no-fault insurer that the no-fault insurer has 15 days to return the

amount described in Subsection (6)(c)(ii)(A); and

(iii) A no-fault insurer that receives a notice under this Subsection (6)(c) shall return the portion

of the reimbursement identified under Subsection (6)(c)(ii) to the third party liability insurer

identified under Subsection (6)(c)(ii)(C) within 15 business days from receipt of a notice

under this Subsection (6)(c).

Amended by Chapter 130, 2020 General Session

31A-22-310 Assigned risk plan.

(1) After consultation with insurers authorized to issue policies containing the provisions specified

under Section 31A-22-302, the insurance commissioner shall approve a reasonable plan for the

equitable apportionment among the insurers of applicants for those policies who are in good

faith entitled to, but are unable to procure, these policies through ordinary methods.

(2) Upon the commissioner's approval of a plan under this section, all insurers issuing policies

described under Section 31A-22-302 shall subscribe to and participate in the commissioner's

approved plan.

(3) Any applicant for a policy under the commissioner's plan, any person insured under the

plan, and any insurer affected by the commissioner's plan may appeal to the insurance

commissioner from any ruling or decision of the manager or committee designated to operate

the plan.

(4) Section 31A-2-306 applies to the commissioner's decision on this appeal.

Amended by Chapter 161, 1987 General Session

31A-22-311 Definitions.

As used in Sections 31A-22-312 and 31A-22-314:

(1) "Authorized driver" means the person to whom the vehicle is rented and includes:

(a) his spouse if a licensed driver satisfying the rental company's minimum age requirement;

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(b) his employer or coworker if engaged in business activity with the renter and if they are

licensed drivers satisfying the rental company's minimum age requirement;

(d) any person who operates the vehicle while parking the vehicle at a commercial establishment;

(e) any person expressly listed by the rental company on the rental agreement as an authorized

driver.

(2) "Damage" means any damage or loss to the rented vehicle resulting from a collision, including

loss of use and any costs and expenses incident to the damage or loss.

(3) "Rental agreement" means any written agreement stating the terms and conditions governing

the use of a private passenger motor vehicle provided by a rental company.

(4) "Rental company" means any person or organization in the business of providing private

passenger motor vehicles to the public.

(5) "Renter" means any person or organization obtaining the use of a private passenger motor

vehicle from a rental company under the terms of a rental agreement.

Amended by Chapter 316, 1994 General Session

31A-22-312 Liability for collision damage -- No security required -- No waiver -- Section

inapplicable to rental companies disclosing charges.

(1) No rental company may, in rental agreements of 30 continuous days or less, hold any

authorized driver liable for any damage except when:

(a) the damage is caused intentionally by an authorized driver or as a result of his willful and

wanton misconduct;

(b) the damage arises out of the authorized driver's operation of the vehicle while illegally

intoxicated or under the influence of any illegal drug as defined or determined under the law

of the state where the damage occurred;

(d) the rental transaction is based on information supplied by the renter with the intent to defraud

the rental company;

(e) the damage arises out of the use of the vehicle while committing or otherwise engaged in a

criminal act in which the use of the motor vehicle is substantially related to the nature of the

criminal activity;

(f) the damage arises out of the use of the motor vehicle to carry persons or property for hire; or

(g) the damage arises out of the use of the motor vehicle outside of the United States or Canada

unless the use is specifically authorized by the rental agreement.

(2) No security or deposit for damage in any form may be required or requested by the rental

company during the rental period, or pending the resolution of any dispute.

(3) No waiver may be offered to provide coverage for any of the exceptions listed in this section.

(4) This section does not apply to any rental company:

(a) whose advertising in this state clearly discloses all charges and costs incidental to the basic

daily rental rate; and

(b) that provides written notice to renters clearly printed on the rental agreement and prominently

displayed at its place of business, that the renter's own motor vehicle insurance or his credit

card agreement may cover any damage or loss to the rental vehicle.

Enacted by Chapter 251, 1989 General Session

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31A-22-314 Mandatory coverage.

(1) As used in this section, "owner's or operator's security" has the same meaning as defined in

Section 41-12a-103.

(2)

(a) A rental company shall maintain owner's or operator's security meeting the requirements of

Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and Operators Act.

(b) Owner's or operator's security maintained by a rental company under Subsection (2)(a)

applies only when there is no other valid or collectible insurance or other form of security

meeting the minimum requirements of Title 41, Chapter 12a, Financial Responsibility of Motor

Vehicle Owners and Operators Act.

requirements of Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and

Operators Act, on a loss involving a rental vehicle, a rental company's obligation under Title

41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and Operators Act, is

satisfied.

(d) When no other valid or collectible insurance or other form of security exists meeting the

minimum requirements of Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle

Owners and Operators Act, a rental company shall provide security meeting the minimum

requirements of Title 41, Chapter 12a, Financial Responsibility of Motor Vehicle Owners and

Operators Act, for losses involving a rental vehicle.

(3) Nothing in this section shall be construed to expand or reduce the liability of a rental company

or to impair a rental company's right to indemnity, contribution, or both.

Amended by Chapter 391, 2007 General Session

Superseded 1/1/2025

31A-22-315 Motor vehicle insurance reporting -- Penalty.

(1)

(a) As used in this section, "commercial motor vehicle insurance coverage" means an insurance

policy that:

(i) includes motor vehicle liability coverage, uninsured motorist coverage, underinsured motorist

coverage, or personal injury coverage; and

(ii) is defined by the department.

(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the department

shall make rules defining commercial motor vehicle insurance coverage.

(2)

(a) Except as provided in Subsections (2)(b) and (c), each insurer that issues a policy that

includes motor vehicle liability coverage, uninsured motorist coverage, underinsured motorist

coverage, or personal injury coverage under this part shall before the seventh and twenty-first

day of each calendar month provide to the Department of Public Safety's designated agent

selected in accordance with Title 41, Chapter 12a, Part 8, Uninsured Motorist Identification

Database Program, a record of each motor vehicle insurance policy in effect for vehicles

registered or garaged in Utah as of the previous submission that was issued by the insurer.

(b) Each insurer that issues commercial motor vehicle insurance coverage shall before the

seventh day of each calendar month provide to the Department of Public Safety's designated

agent selected in accordance with Title 41, Chapter 12a, Part 8, Uninsured Motorist

Identification Database Program, a record of each commercial motor vehicle insurance policy

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in effect for vehicles registered or garaged in Utah as of the previous month that was issued

by the insurer.

motorist coverage, underinsured motorist coverage, or personal injury coverage under this

part is not required to provide a record of a motor vehicle insurance policy in effect for a

vehicle to the Department of Public Safety's designated agent under Subsection (2)(a) or

(b) if the policy covers a vehicle that is registered under Section 41-1a-221, 41-1a-222, or

41-1a-301.

(d) This Subsection (2) does not preclude more frequent reporting.

(3)

(a) A record provided by an insurer under Subsection (2)(a) shall include:

(i) the name, date of birth, and driver license number, if the insured provides a driver license

number to the insurer, of each insured owner or operator, and the address of the named

insured;

(ii) the make, year, and vehicle identification number of each insured vehicle; and

(iii) the policy number, effective date, and expiration date of each policy.

(b) A record provided by an insurer under Subsection (2)(b) shall include:

(i) the named insured;

(ii) the policy number, effective date, and expiration date of each policy; and

(iii) the following information, if available:

(A) the name, date of birth, and driver license number of each insured owner or operator, and

the address of the named insured; and

(B) the make, year, and vehicle identification number of each insured vehicle.

(4) Each insurer shall provide this information by an electronic means or by another form the

Department of Public Safety's designated agent agrees to accept.

(5)

(a) The commissioner may, following procedures set forth in Title 63G, Chapter 4, Administrative

Procedures Act, assess a fine against an insurer of up to $250 for each day the insurer fails to

comply with this section.

(b) If an insurer shows that the failure to comply with this section was inadvertent, accidental, or

the result of excusable neglect, the commissioner shall excuse the fine.

Amended by Chapter 382, 2008 General Session

Effective 1/1/2025

31A-22-315 Motor vehicle insurance reporting -- Penalty.

(1)

(a) As used in this section, "commercial motor vehicle insurance coverage" means an insurance

policy that:

(i) includes motor vehicle liability coverage, uninsured motorist coverage, underinsured motorist

coverage, or personal injury coverage; and

(ii) is defined by the department.

(b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the department

shall make rules defining commercial motor vehicle insurance coverage.

(2)

(a) Except as provided in Subsections (2)(b) and (c), each insurer that issues a policy that

includes motor vehicle liability coverage, uninsured motorist coverage, underinsured motorist

coverage, or personal injury coverage under this part shall before the seventh and twenty-first

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day of each calendar month provide to the Department of Public Safety's designated agent

selected in accordance with Title 41, Chapter 12a, Part 8, Uninsured Motorist Identification

Database Program, a record of each motor vehicle or motorboat insurance policy in effect for

vehicles registered or garaged in Utah as of the previous submission that was issued by the

insurer.

(b) Each insurer that issues commercial motor vehicle insurance coverage shall before the

seventh day of each calendar month provide to the Department of Public Safety's designated

agent selected in accordance with Title 41, Chapter 12a, Part 8, Uninsured Motorist

Identification Database Program, a record of each commercial motor vehicle insurance policy

in effect for vehicles registered or garaged in Utah as of the previous month that was issued

by the insurer.

motorist coverage, underinsured motorist coverage, or personal injury coverage under this

part is not required to provide a record of a motor vehicle insurance policy in effect for a

vehicle to the Department of Public Safety's designated agent under Subsection (2)(a) or

(b) if the policy covers a vehicle that is registered under Section 41-1a-221, 41-1a-222, or

41-1a-301.

(d) This Subsection (2) does not preclude more frequent reporting.

(3)

(a) A record provided by an insurer under Subsection (2)(a) shall include:

(i) the name, date of birth, and driver license number, if the insured provides a driver license

number to the insurer, of each insured owner or operator, and the address of the named

insured;

(ii) the make, year, and vehicle identification number of each insured vehicle; and

(iii) the policy number, effective date, and expiration date of each policy.

(b) A record provided by an insurer under Subsection (2)(b) shall include:

(i) the named insured;

(ii) the policy number, effective date, and expiration date of each policy; and

(iii) the following information, if available:

(A) the name, date of birth, and driver license number of each insured owner or operator, and

the address of the named insured; and

(B) the make, year, and vehicle identification number of each insured vehicle.

(4) Each insurer shall provide this information by an electronic means or by another form the

Department of Public Safety's designated agent agrees to accept.

(5)

(a) The commissioner may, following procedures set forth in Title 63G, Chapter 4, Administrative

Procedures Act, assess a fine against an insurer of up to $250 for each day the insurer fails to

comply with this section.

(b) If an insurer shows that the failure to comply with this section was inadvertent, accidental, or

the result of excusable neglect, the commissioner shall excuse the fine.

Amended by Chapter 236, 2024 General Session

31A-22-315.5 Motor vehicle insurance verification -- Penalty.

(1)

(a) Except as provided in Subsection (1)(b), and in addition to the reporting requirements under

Section 31A-22-315, each insurer that issues a policy that includes motor vehicle liability

coverage, uninsured motorist coverage, underinsured motorist coverage, or personal injury

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coverage under this part shall, upon request, provide to the Department of Public Safety's

designated agent selected in accordance with Title 41, Chapter 12a, Part 8, Uninsured

Motorist Identification Database Program, verification of whether or not a motor vehicle

insurance policy is in effect for a specified vehicle.

(b) An insurer that issues a policy that includes motor vehicle liability coverage, uninsured

motorist coverage, underinsured motorist coverage, or personal injury coverage under this

part is not required to provide verification of a motor vehicle insurance policy in effect for a

vehicle to the Department of Public Safety's designated agent under Subsection (1)(a) if:

(i) the policy covers a vehicle that is registered under Section 41-1a-221, 41-1a-222, or

41-1a-301;

(ii) the policy covers a commercial motor vehicle; or

(iii) the insurer issues insurance for less than 500 motor vehicles.

(2) Each insurer shall provide the verification required under Subsection (1) using an electronic

service established by the insurers, through the Internet, world wide web, or a similar

proprietary or common carrier electronic system that:

(a) is compliant with:

(i) the specifications and standards of the Insurance Industry Committee on Motor Vehicle

Administration; and

(ii) other applicable industry standards;

(b) is available 24 hours a day, seven days a week, subject to reasonable allowances for:

(i) scheduled maintenance; or

(ii) temporary system failures; and

(i) secure its data against unauthorized access; and

(ii) maintain a record of all information requests.

(3)

(a) The commissioner may, following procedures set forth in Title 63G, Chapter 4, Administrative

Procedures Act, assess a fine against an insurer of up to $250 for each day the insurer fails to

comply with this section.

(b) The commissioner shall excuse the fine if an insurer shows that the failure to comply with this

section was:

(i) inadvertent;

(ii) accidental; or

(iii) the result of excusable neglect.

Enacted by Chapter 243, 2012 General Session

31A-22-316 Title.

Sections 31A-22-316 through 31A-22-319 are known as the "Aftermarket Crash Parts Act."

Renumbered and Amended by Chapter 8, 1995 General Session

31A-22-317 Definitions.

As used in Sections 31A-22-316 through 31A-22-319:

(1) "Aftermarket crash part" means a replacement for any of the nonmechanical sheet metal or

plastic parts that generally constitute the exterior of a motor vehicle, including inner and outer

panels.

(2) "Installer" means an individual who replaces or repairs the parts of a motor vehicle.

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(3) "Insurer" means an insurance company and any person authorized to represent the insurer with

respect to a claim.

(4) "Nonoriginal equipment manufacturer" or "non-OEM" means a manufacturer of replacement

parts for a different manufacturer's equipment.

(5) "Non-OEM aftermarket crash part" means an aftermarket crash part not made for or by the

manufacturer of the motor vehicle.

(6) "Repair facility" means any motor vehicle dealer, garage, body shop, or other commercial entity

that repairs or replaces those parts that generally constitute the exterior of a motor vehicle.

Renumbered and Amended by Chapter 8, 1995 General Session

31A-22-318 Identification.

(1) Any aftermarket crash part supplied by a nonoriginal equipment manufacturer for use in a motor

vehicle in this state shall have the logo or name of the nonoriginal equipment manufacturer

affixed or inscribed on the aftermarket crash part.

(2) The nonoriginal equipment manufacturer's logo or name shall be visible after installation

whenever practicable.

Renumbered and Amended by Chapter 8, 1995 General Session

31A-22-319 Prohibition on insurer requiring certain parts -- Disclosure.

(1) Unless the insured is given notice in writing an insurer may not specify the use of non-OEM

aftermarket crash parts in the repair of an insured's motor vehicle. The notice required by

Subsection (1) shall identify non-OEM parts as not made for or by the vehicle manufacturer.

(2) Unless the consumer is given notice in writing prior to installation, a repair facility or installer

may not use non-OEM aftermarket parts to repair a vehicle.

(3) In all instances where non-OEM aftermarket crash parts are intended for use by an insurer:

(a) the written estimate shall clearly identify each non-OEM aftermarket crash part; and

(b) a disclosure document containing the following statements in 10 point or larger type shall

appear on or be attached to the insured's copy of the estimate: "This estimate has been

prepared based on the use of crash parts supplied by a source other than the manufacturer

of your motor vehicle. Warranties applicable to these replacement parts are provided by the

manufacturer or distributor of these parts rather than the manufacturer of your vehicle."

Renumbered and Amended by Chapter 8, 1995 General Session

31A-22-320 Use of credit information.

(1) For purposes of this section:

(a) "Credit information" means:

(i) a consumer report;

(ii) a credit score;

(iii) any information obtained by the insurer from a consumer report;

(iv) any part of a consumer report; or

(v) any part of a credit score.

(b)

(i) Except as provided in Subsection (1)(b)(ii), "consumer report" is as defined in 15 U.S.C.

1681a.

(ii) "Consumer report" does not include:

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(A) a motor vehicle record obtained from a state or an agency of a state; or

(B) any information regarding an applicant's or insured's insurance claim history.

(c)

(i) "Credit score" means a numerical value or a categorization that is:

(A) derived from information in a consumer report;

(B) derived from a statistical tool or modeling system; and

(I) future insurance claims behavior; or

(II) credit behavior.

(ii) "Credit score" includes:

(A) a risk predictor; or

(B) a risk score.

(iii) A numerical value or a categorization described in Subsection (1)(c)(i) is a credit score

if it is developed to predict the behavior described in Subsection (1)(c)(i)(C) regardless

of whether it is developed to predict other factors in addition to predicting the behavior

described in Subsection (1)(c)(i)(C).

(d) "Motor vehicle related insurance policy" means:

(i) a motor vehicle liability policy;

(ii) a policy that contains uninsured motorist coverage;

(iii) a policy that contains underinsured motorist coverage;

(iv) a policy that contains property damage coverage under this part; or

(v) a policy that contains personal injury coverage under this part.

(2) An insurer that issues a motor vehicle related insurance policy:

(a) except as provided in Subsection (2)(b), may not use credit information for the purpose of

determining for the motor vehicle related insurance policy:

(i) renewal;

(ii) nonrenewal;

(iii) termination;

(iv) eligibility;

(v) underwriting; or

(vi) rating; and

(b) notwithstanding Subsection (2)(a), may use credit information for the purpose of:

(i) if risk related factors other than credit information are considered, determining initial

underwriting; or

(ii) providing to an insured:

(A) a reduction in rates paid by the insured for the motor vehicle related insurance policy; or

(B) any other discount similar to the reduction in rates described in Subsection (2)(b)(ii)(A).

(3) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

commissioner may make rules necessary to enforce this section.

Amended by Chapter 382, 2008 General Session

31A-22-321 Use of arbitration in third party motor vehicle accident cases.

(1) A person injured as a result of a motor vehicle accident may elect to submit all third party bodily

injury claims to arbitration by filing a notice of the submission of the claim to binding arbitration

in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, if:

(a) the claimant or the claimant's representative has:

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(i) previously and timely filed a complaint in a court that includes a third party bodily injury claim;

and

(ii) filed a notice to submit the claim to arbitration within 14 days after the complaint has been

answered; and

(b) the notice required under Subsection (1)(a)(ii) is filed while the action under Subsection (1)(a)

(i) is still pending.

(2)

(a) If a party submits a bodily injury claim to arbitration under Subsection (1), the party submitting

the claim or the party's representative is limited to an arbitration award that does not exceed

$75,000 or the defendant's per person limits of third party bodily insurance, whichever is

less, in addition to any available personal injury protection benefits and any claim for property

damage.

(b) A claim for reimbursement of personal injury protection benefits is to be resolved between

insurers as provided for in Subsection 31A-22-309(6)(a)(ii).

(1) unless agreed upon by the parties in writing.

(d) A party who elects to proceed against a defendant under this section:

(i) waives the right to obtain a judgment against the personal assets of the defendant; and

(ii) is limited to recovery only against available limits of insurance , plus a maximum $15,000 in

excess of policy limits, and available costs if appealed.

(e)

(i) This section does not prevent a party from pursuing an underinsured motorist claim as set

out in Section 31A-22-305.3.

(ii) An underinsured motorist claim described in Subsection (2)(e)(i) is not limited to the

defendant's per person limits of third party bodily insurance coverage or the $75,000 limit.

(iii) There shall be no right of subrogation on the part of the underinsured motorist carrier for a

claim submitted to arbitration under this section.

(3) A claim for punitive damages may not be made in an arbitration proceeding under Subsection

(1) or any subsequent proceeding, even if the claim is later resolved through a trial de novo

under Subsection (11).

(4)

(a) A person who has elected arbitration under this section may rescind the person's election if

the rescission is made within:

(i) 90 days after the election to arbitrate; and

(ii) no less than 30 days before any scheduled arbitration hearing.

(b) A person seeking to rescind an election to arbitrate under this Subsection (4) shall:

(i) file a notice of the rescission of the election to arbitrate with the court in which the matter was

filed; and

(ii) send copies of the notice of the rescission of the election to arbitrate to all counsel of record

to the action.

the parties as allowed by the Utah Rules of Civil Procedure and Utah Rules of Evidence.

(d) A party who has elected to arbitrate under this section and then rescinded the election to

arbitrate under this Subsection (4) may not elect to arbitrate the claim under this section

again.

(5)

(a) Unless otherwise agreed to by the parties or by order of the court, an arbitration process

elected under this section is subject to Rule 26, Utah Rules of Civil Procedure.

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(b) Unless otherwise agreed to by the parties or ordered by the court, discovery shall be

completed within 150 days after the date arbitration is elected under this section or the date

the answer is filed, whichever is longer.

(6)

(a) Unless otherwise agreed to in writing by the parties, a claim that is submitted to arbitration

under this section shall be resolved by a single arbitrator.

(b) Unless otherwise agreed to by the parties or ordered by the court, all parties shall agree on

the single arbitrator selected under Subsection (6)(a) within 90 days of the answer of the

defendant.

the parties shall select a panel of three arbitrators.

(d) If the parties select a panel of three arbitrators under Subsection (6)(c):

(i) each side shall select one arbitrator; and

(ii) the arbitrators appointed under Subsection (6)(d)(i) shall select one additional arbitrator to

be included in the panel.

(7) Unless otherwise agreed to in writing:

(a) each party shall pay an equal share of the fees and costs of the arbitrator selected under

Subsection (6)(a); and

(b) if an arbitration panel is selected under Subsection (6)(d):

(i) each party shall pay the fees and costs of the arbitrator selected by that party's side; and

(ii) each party shall pay an equal share of the fees and costs of the arbitrator selected under

Subsection (6)(d)(ii).

(8) Except as otherwise provided in this section and unless otherwise agreed to in writing by the

parties, an arbitration proceeding conducted under this section shall be governed by Title 78B,

Chapter 11, Utah Uniform Arbitration Act.

(9)

(a) Subject to the provisions of this section, the Utah Rules of Civil Procedure and Utah Rules of

Evidence apply to the arbitration proceeding.

(b) The Utah Rules of Civil Procedure and Utah Rules of Evidence shall be applied liberally with

the intent of concluding the claim in a timely and cost-efficient manner.

Civil Procedure and shall be subject to the jurisdiction of the court in which the matter is filed.

(d) Dispositive motions shall be filed, heard, and decided by the court prior to the arbitration

proceeding in accordance with the court's scheduling order.

(10) A written decision by a single arbitrator or by a majority of the arbitration panel shall constitute

a final decision.

(11) An arbitration award issued under this section shall be the final resolution of all bodily injury

claims between the parties and may be reduced to judgment by the court upon motion and

notice unless:

(a) either party, within 20 days after service of the arbitration award:

(i) files a notice requesting a trial de novo in the court; and

(ii) serves the nonmoving party with a copy of the notice requesting a trial de novo under

Subsection (11)(a)(i); or

(b) the arbitration award has been satisfied.

(12)

(a) Upon filing a notice requesting a trial de novo under Subsection (11):

(i) unless otherwise stipulated to by the parties or ordered by the court, an additional 120 days

shall be allowed for further discovery;

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(ii) the additional discovery time under Subsection (12)(a)(i) shall run from the notice of appeal;

and

(iii) the claim shall proceed through litigation in accordance with the Utah Rules of Civil

Procedure and Utah Rules of Evidence.

(b) In accordance with Rule 38, Utah Rules of Civil Procedure, either party may request a jury

trial with a request for trial de novo filed under Subsection (11)(a)(i).

(13)

(a) If the plaintiff, as the moving party in a trial de novo requested under Subsection (11), does

not obtain a verdict that is at least $5,000 and is at least 30% greater than the damages

awarded in arbitration, excluding the items listed in Subsection (19), the plaintiff is responsible

for all of the nonmoving party's costs.

(b) The costs described in Subsection (13)(a) include:

(i) any costs set forth in Rule 54(d), Utah Rules of Civil Procedure;

(ii) the costs of expert witnesses and depositions;

(iii) the arbitration costs paid by the prevailing party under Subsection (7);

(iv) prejudgment interest described in Section 78B-5-824; and

(v) postjudgment interest described in Section 15-1-4.

(14)

(a) If a defendant, as the moving party in a trial de novo requested under Subsection (11),

does not obtain a verdict that is at least 30% less than the damages awarded in arbitration,

excluding the items described in Subsection (19), the defendant is responsible for all of the

nonmoving party's costs.

(b) The costs described in Subsection (14)(a) include:

(i) costs described in Rule 54(d), Utah Rules of Civil Procedure;

(ii) the costs of expert witnesses and depositions;

(iii) the arbitration costs paid by the prevailing party under Subsection (7);

(iv) prejudgment interest described in Section 78B-5-824; and

(v) postjudgment interest described in Section 15-1-4.

(15) For purposes of determining whether a party's verdict is greater or less than the arbitration

award under Subsections (13) and (14), a court may not consider any recovery or other relief

granted on a claim for damages if the claim for damages:

(a) was not fully disclosed in writing prior to the arbitration proceeding; or

(b) was not disclosed in response to discovery contrary to the Utah Rules of Civil Procedure.

(16) If a court determines, upon a motion of the nonmoving party, that the moving party's use of

the trial de novo process was filed in bad faith as defined in Section 78B-5-825, the court may

award reasonable attorney fees to the nonmoving party.

(17) Nothing in this section is intended to affect or prevent any first party claim from later being

brought under any first party insurance policy under which the injured person is a covered

person.

(18)

(a) If a defendant requests a trial de novo under Subsection (11), the total damages award at trial

may not exceed $15,000 above any available per person limits of insurance coverage, not

including the costs described in Subsection (14)(b).

(b) If a plaintiff requests a trial de novo under Subsection (11), the verdict at trial may not exceed

$75,000, or the per person limits of insurance coverage, whichever is less.

(19) All arbitration awards issued under this section shall include:

(a) the costs described in Rule 54(d), Utah Rules of Civil Procedure;

(b) the arbitration costs paid by the prevailing party under Subsection (7);

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(d) postjudgment interest described in Section 15-1-4.

(20) If a party requests a trial de novo under Subsection (11), the party shall file a copy of the

notice requesting a trial de novo with the commissioner notifying the commissioner of the

party's request for a trial de novo under Subsection (11).

Amended by Chapter 158, 2024 General Session

31A-22-322 Improper administration of cancelled auto insurance coverage.

(1) Upon cancellation by an insured of auto insurance coverage, the insurer shall discontinue any

automatic payments and withdrawals related to the cancelled policy before the later of:

(a) 15 days after the request for cancellation; or

(b) 15 days after the effective date of the cancellation.

(2) After cancellation by an insured of auto insurance coverage, the insurer may not reinstate the

cancelled policy without the express consent of the insured.

(3) After cancellation by an insured of auto insurance coverage, the insurer shall refund any funds

collected by the insurer to which the insurer is not entitled, calculated according to the terms of

the insurance policy, before the later of:

(a) 30 days after the request for cancellation; or

(b) 30 days after the effective date of the cancellation.

(4) The commissioner may order an insurer who violates this section to forfeit to the state not more

than $2,500 for each violation.

Enacted by Chapter 125, 2016 General Session

Part 4

Life Insurance and Annuities

31A-22-400 Scope of part.

This Part 4, Life Insurance and Annuities, applies to all life insurance policies and contracts,

including:

(1) an annuity contract;

(2) a credit life contract;

(3) a franchise contract;

(4) a group contract; and

(5) a blanket contract.

Amended by Chapter 90, 2004 General Session

31A-22-401 Prohibited life insurance policy provisions.

No life insurance company may issue or deliver any life insurance policy subject to this chapter

under Section 31A-21-101 which contains any provision:

(1) forfeiting the policy for failure to repay any loan on the policy or to pay interest on the loan

while the total indebtedness on the policy is less than its loan value, and in ascertaining the

indebtedness due upon policy loans, the interest, if not paid when due, may be added to the

principal of those loans and may bear interest at the same rate as the principal;

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(2) claiming that the policy was issued or became effective more than one year before the original

application for the insurance is executed, if the insured would then be rated at an age more

than one year younger than his age at the date of his application, unless the aggregate amount

of the annual premiums for the whole term of the back-dated period is paid in cash;

(3) allowing assessments or calls to be made upon policyholders; or

(4) allowing an insurer to cancel or terminate a policy for a reason other than:

(a) nonpayment of a premium when due; or

(b) as allowed pursuant to Subsection 31A-21-105(2).

Amended by Chapter 120, 2024 General Session

31A-22-402 Grace period -- Notification.

(1)

(a) Every life insurance policy other than a group policy shall contain a provision entitling the

policyholder to a grace period within which the payment of any premium may be made after

the first payment of any premium.

(b) During the grace period described in Subsection (1)(a), the policy continues in full force.

(2) The grace period required by Subsection (1) may not be less than:

(a) 31 days; or

(b) four weeks for policies whose premiums are payable more frequently than monthly.

(3) The insurer may impose an interest charge during the grace period not in excess of the interest

rate:

(a) set by the policy for policy loans; or

(b) in the absence of a provision described in Subsection (3)(a), a rate set by the commissioner

by rule.

(4) If a claim arises under the policy during the grace period, an insurer may deduct from the policy

proceeds:

(a) the amount of any premium due or overdue;

(b) interest at the rate provided in this section; and

(5)

(a) At least 30 days before the day on which the insurer terminates coverage, the insurer shall

send written notice of termination of coverage to:

(i) the policyholder's last-known address; and

(ii) a third party designated in accordance with Section 31A-22-430.

(b) An insurer shall obtain and, upon request, demonstrate proof of delivery for a notice the

insurer sends under Subsection (5)(a).

electronic delivery, a read receipt.

Amended by Chapter 221, 2021 General Session

31A-22-403 Incontestability.

(1) This section does not apply to group policies.

(2)

(a) Except as provided in Subsection (3), a life insurance policy is incontestable after the policy

has been in force for a period of two years from the policy's date of issue:

(i) during the lifetime of the insured; or

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(ii) for a survivorship life insurance policy, during the lifetime of the surviving insured.

(b) A life insurance policy shall state that the life insurance policy is incontestable after the time

period described in Subsection (2)(a).

(3)

(a) A life insurance policy described in Subsection (2) may be contested for nonpayment of

premiums.

(b) A life insurance policy described in Subsection (2) may be contested as to:

(i) provisions relating to accident and health benefits allowed under Section 31A-22-609; and

(ii) additional benefits in the event of death by accident.

issuance and for an additional premium, to obtain a death benefit that is larger than when the

policy was originally issued, the payment of the additional increment of benefit is contestable:

(i) until two years after the incremental increase of benefits; and

(ii) based only on a ground that may arise in connection with the incremental increase.

(4)

(a) A reinstated life insurance policy may be contested:

(i) for two years following reinstatement on the same basis as at original issuance; and

(ii) only as to matters arising in connection with the reinstatement.

(b) Any grounds for contest available at original issuance continue to be available for contest until

the policy has been in force for a total of two years:

(i) during the lifetime of the insured; and

(ii) for a survivorship life insurance policy, during the lifetime of the surviving insured.

(5)

(a) The limitations on incontestability under this section:

(i) preclude only a contest of the validity of the policy; and

(ii) do not preclude the good faith assertion at any time of defenses based upon provisions in

the policy that exclude or qualify coverage, whether or not those qualifications or exclusions

are specifically excepted in the policy's incontestability clause.

(b) A provision on which the contestable period would normally run may not be reformulated as a

coverage exclusion or restriction to take advantage of this Subsection (5).

(6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

commissioner may make rules to implement this section.

Amended by Chapter 382, 2008 General Session

31A-22-404 Suicide.

(1)

(a) Suicide is not a defense to a claim under a life insurance policy that is in force for two years

from the date of issuance of the later of:

(i) the policy; or

(ii) the certificate.

(b) Subsection (1)(a) applies whether:

(i) the insured's death by suicide is voluntary or involuntary; or

(ii) the insured is sane or insane.

pay to the beneficiary an amount not less than the premium paid less the following:

(i) a dividend paid;

(ii) an indebtedness; and

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(iii) a partial withdrawal.

(2)

(a) If after a life insurance policy is in effect the policy allows the policyholder to purchase a death

benefit that is larger than when the policy was originally effective for an additional premium,

the payment of the additional increment of benefit may be limited in the event of a suicide

within a two-year period beginning on the day on which the increment increase takes effect.

(b) If a suicide occurs within the two-year period described in Subsection (2)(a), the insurer shall

pay to the beneficiary an amount not less than the additional premium paid for the additional

increment of benefit.

(3) For a survivorship life insurance policy, this section applies when within two years from the day

on which the survivorship life insurance policy is issued:

(a) the death of all insureds results from suicide; or

(b) the death of the surviving insured results from suicide.

(4) This section does not apply to:

(a) a policy insuring against death by accident only; or

(b) an accident or double indemnity provision of an insurance policy.

Amended by Chapter 349, 2009 General Session

31A-22-405 Misstated age or gender.

(1) Subject to Subsection (2), if the age or gender of the person whose life is at risk is misstated

in an application for a policy of life insurance, and the error is not adjusted during the person's

lifetime, the amount payable under the policy is what the premium paid would have purchased if

the age or gender had been stated correctly.

(2) If the person whose life is at risk was, at the time the insurance was applied for, beyond the

maximum age limit designated by the insurer, the insurer shall refund at least the amount of the

premiums collected under the policy.

Amended by Chapter 308, 2002 General Session

31A-22-406 Table of installments.

Any life insurance policy which provides that the proceeds may be payable in installments,

which are determinable at the issue of the policy, shall provide in the policy a table showing the

amounts and intervals of the guaranteed installments.

Enacted by Chapter 242, 1985 General Session

31A-22-407 Reinstatement.

(1) Except as provided under Subsection (2), life insurance policies, other than group policies,

shall be reinstated upon written application made within three years, or within two years in

the case of policies with face amounts under $5,000, from the date of premium default. The

applicant shall produce evidence of insurability satisfactory to the insurer, pay all premiums

in arrears, and pay or reinstate any other indebtedness to the insurer upon the policy, all with

interest, compounded annually, at a rate not exceeding the rate set by the policy for policy

loans compounded annually. If no rate is set in the policy, the commissioner shall adopt a rule

which sets the rate the same as under Section 31A-22-402.

(2) Subsection (1) does not apply if any of these conditions exist:

(a) The policy has been surrendered for its cash surrender value.

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(b) The policy's cash surrender value has been exhausted.

Enacted by Chapter 242, 1985 General Session

31A-22-408 Standard Nonforfeiture Law for Life Insurance.

(1)

(a) This section is known as the "Standard Nonforfeiture Law for Life Insurance."

(b) This section does not apply to group life insurance.

is described in Subsection 31A-17-514(2).

(2) In the case of policies issued on or after July 1, 1961, no policy of life insurance, except as

stated in Subsection (8), may be delivered or issued for delivery in this state unless it contains

in substance the following provisions, or corresponding provisions which in the opinion of the

commissioner are at least as favorable to the defaulting or surrendering policyholder as are

the minimum requirements specified in this section, and are essentially in compliance with

Subsection (8):

(a) That, in the event of default in any premium payment, after premiums have been paid for at

least one full year the company will grant, upon proper request not later than 60 days after

the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated

in the policy, effective as of such due date, of such amount as is specified in this section. In

lieu of that stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper

request not later than 60 days after the due date of the premium in default, an actuarially

equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer

period of death benefits or, if applicable, a greater amount or earlier payment of endowment

benefits.

(b) That, upon surrender of the policy within 60 days after the due date of any premium payment

in default after premiums have been paid for at least three full years in the case of ordinary

insurance or five full years in the case of industrial insurance, the company will pay, in lieu of

any paid-up nonforfeiture benefit, a cash surrender value of such amount as is specified in

this section.

unless the person entitled to make such election elects another available option not later than

60 days after the due date of the premium in default.

(d) That, if the policy shall have been paid by the completion of all premium payments or if it is

continued under any paid-up nonforfeiture benefit which became effective on or after the third

policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case

of industrial insurance, the company will pay upon surrender of the policy within 30 days after

any policy anniversary, a cash surrender value in the amount specified in this section.

(e) In the case of policies which cause, on a basis guaranteed in the policy, unscheduled

changes in benefits or premiums, or which provide an option for changes in benefits or

premiums other than a change to a new policy, a statement of the mortality table, interest

rate, and method used in calculating cash surrender values and the paid-up nonforfeiture

benefits available under the policy. In the case of other policies, a statement of the mortality

table and interest rate used in calculating the cash surrender values and the paid-up

nonforfeiture benefit, if any, available under the policy on each policy anniversary either

during the first 20 policy years or during the term of the policy, whichever is shorter, such

values and benefits to be calculated upon the assumption that there are no dividends or paid-

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up additions credited to the policy and that there is no indebtedness to the company on the

policy.

(f) A statement that the cash surrender values and the paid-up nonforfeiture benefits available

under the policy are not less than the minimum values and benefits required by or pursuant to

the insurance law of the state in which the policy is delivered; an explanation of the manner

in which the cash surrender values and the paid-up nonforfeiture benefits are altered by

the existence of any paid-up additions credited to the policy or any indebtedness to the

company on the policy; if a detailed statement of the method of computation of the values

and benefits shown in the policy is not stated in the policy, a statement that such method

of computation has been filed with the insurance supervisory official of the state in which

the policy is delivered; and a statement of the method to be used in calculating the cash

surrender value and paid-up nonforfeiture benefit available under the policy on any policy

anniversary beyond the last anniversary for which such values and benefits are consecutively

shown in the policy.

(g) Any of the foregoing provisions or portions thereof not applicable by reason of the plan of

insurance may, to the extent inapplicable, be omitted from the policy.

(h) The company shall reserve the right to defer the payment of any cash surrender value for a

period of six months after demand therefor with surrender of the policy with the consent of the

commissioner; provided, however, that the policy shall remain in full force and effect until the

insurer has made the payment.

(3)

(a) Any cash surrender value available under the policy in the event of default in a premium

payment due on any policy anniversary, whether or not required by Subsection (2), shall be

an amount not less than the excess, if any, of the present value, on such anniversary, of the

future guaranteed benefits which would have been provided for by the policy, including any

existing paid-up additions, if there had been no default, over the sum of:

(i) the then present value of the adjusted premiums as defined in Subsections (5) and (6),

corresponding to premiums which would have fallen due on and after such anniversary; and

(ii) the amount of any indebtedness to the company on the policy.

(b) Provided, however, that for any policy issued on or after the operative date of Subsection (6)

(d) as defined in Subsection (6)(d), which provides supplemental life insurance or annuity

benefits at the option of the insured and for an identifiable additional premium by rider or

supplemental policy provision, the cash surrender value referred to in Subsection (3)(a) shall

be an amount not less than the sum of the cash surrender value as defined in Subsection (3)

(a) for an otherwise similar policy issued at the same age without such rider or supplemental

policy provision and the cash surrender value as defined in Subsection (3)(a) for a policy

which provides only the benefits otherwise provided by such rider or supplemental policy

provision.

(6)(d) as defined in Subsection (6)(d), which defines a primary insured and provides term

insurance on the life of the spouse of the primary insured expiring before the spouse's age

71, the cash surrender value referred to in Subsection (3)(a) shall be an amount not less than

the sum of the cash surrender value as defined in Subsection (3)(a) for an otherwise similar

policy issued at the same age without such term insurance on the life of the spouse and the

cash surrender value as defined in Subsection (3)(a) for a policy which provides only the

benefits otherwise provided by such term insurance on the life of the spouse.

(d) Any cash surrender value available within 30 days after any policy anniversary under any

policy paid-up by completion of all premium payments or any policy continued under any paid-

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up nonforfeiture benefit, whether or not required by Subsection (2) shall be an amount not

less than the present value, on such anniversary, of the future guaranteed benefits provided

for by the policy, including any existing paid-up additions, decreased by any indebtedness to

the company on the policy.

(4) Any paid-up nonforfeiture benefit available under the policy in the event of default in a

premium payment due on any policy anniversary shall be such that its present value as of

such anniversary shall be at least equal to the cash surrender value then provided for by the

policy or, if none is provided for, that cash surrender value which would have been required by

this section in the absence of the condition that premiums shall have been paid for at least a

specified period.

(5)

(a)

(i) This Subsection (5) does not apply to policies issued on or after the operative date of

Subsection (6)(d) as defined in Subsection (6)(d).

(ii) Except as provided in Subsection (5)(c), the adjusted premiums for any policy shall be

calculated on an annual basis and shall be such uniform percentage of the respective

premiums specified in the policy for each policy year, excluding any extra premiums

charged because of impairments or special hazards, that the present value, at the date of

issue of the policy, of all such adjusted premiums shall be equal to the sum of:

(A) the then present value of the future guaranteed benefits provided for by the policy;

(B) 2% of the amount of insurance, if the insurance be uniform in amount, or of the equivalent

uniform amount if the amount of insurance varies with duration of the policy;

(D) 25% of either the adjusted premium for the first policy year or the adjusted premium for a

whole life policy of the same uniform or equivalent uniform amount with uniform premiums

for the whole of life issued at the same age for the same amount of insurance, whichever

is less.

(iii) Provided, however, that in applying the percentages specified in Subsections (5)(a)(ii)(C)

and (D), no adjusted premium shall be considered to exceed 4% of the amount of insurance

or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this

Subsection (5) shall be the date as of which the rated age of the insured is determined.

(b) In the case of a policy providing an amount of insurance varying with duration of the policy,

the equivalent uniform amount thereof for the purpose of this Subsection (5) shall be

considered to be the uniform amount of insurance provided by an otherwise similar policy,

containing the same endowment benefit or benefits, if any, issued at the same age and for

the same term, the amount of which does not vary with duration and the benefits under which

have the same present value at the date of issue as the benefits under the policy; provided,

however, that in the case of a policy providing a varying amount of insurance issued on the

life of a child under age 10, the equivalent uniform amount may be computed as though the

amount of insurance provided by the policy before the attainment of age 10 were the amount

provided by such policy at age 10.

(c)

(i) The adjusted premiums for any policy providing term insurance benefits by rider or

supplemental policy provision shall be equal to the sum of:

(A) the adjusted premiums for an otherwise similar policy issued at the same age without

such term insurance benefits; and

(B) during the period for which premiums for such term insurance benefits are payable, the

adjusted premiums for such term insurance.

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(ii) The foregoing items (A) and (B) of Subsection (5)(c)(i) being calculated separately and as

specified in Subsections (5)(a) and (b) except that, for the purposes of (B), (C), and (D) of

Subsection (5)(a)(ii), the amount of insurance or equivalent uniform amount of insurance

used in calculation of the adjusted premiums referred to in (B) of Subsection (5)(a)(ii) shall

be equal to the excess of the corresponding amount determined for the entire policy over

the amount used in the calculation of the adjusted premiums in (A) of Subsection (5)(c)(i).

(d) Except as otherwise provided in Subsection (6), all adjusted premiums and present values

referred to in this section shall for all policies of ordinary insurance be calculated on the basis

of the Commissioner's 1941 Standard Ordinary Mortality Table, provided that for any category

of ordinary insurance issued on female risks, adjusted premiums and present values may

be calculated according to an age not more than three years younger than the actual age

of the insured and such calculations for all policies of industrial insurance shall be made on

the basis of the 1941 Standard Industrial Mortality Table. All calculations shall be made on

the basis of the rate of interest, not exceeding 3-1/2% per annum, specified in the policy for

calculating cash surrender values and paid-up nonforfeiture benefits. Provided, however,

that in calculating the present value of any paid-up term insurance with accompanying pure

endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be

not more than 130% of the rates of mortality according to such applicable table. Provided,

further, that for insurance issued on a substandard basis, the calculation of any such adjusted

premiums and present values may be based on such other table of mortality as may be

specified by the company and approved by the commissioner.

(6)

(a) This Subsection (6)(a) does not apply to ordinary policies issued on or after the operative date

of Subsection (6)(d) as defined in Subsection (6)(d). In the case of ordinary policies issued

on or after the operative date of Subsection (6)(a) as defined in Subsection (6)(b), all adjusted

premiums and present values referred to in this section shall be calculated on the basis of the

Commissioner's 1958 Standard Ordinary Mortality Table and the rate of interest as specified

in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, provided

that such rate of interest may not exceed 3-1/2% per annum for policies issued before June

1, 1973, 4% per annum for policies issued on or after May 31, 1973, and before April 2, 1980,

and the rate of interest may not exceed 5-1/2% per annum for policies issued after April 2,

1980, except that for any single premium whole life or endowment insurance policy a rate of

interest not exceeding 6-1/2% per annum may be used, and provided that for any category

of ordinary insurance issued on female risks, adjusted premiums and present values may

be calculated according to an age not more than six years younger than the actual age of

the insured. Provided, however, that in calculating the present value of any paid-up term

insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit,

the rates of mortality assumed may be not more than those shown in the Commissioner's

1958 Extended Term Insurance Table. Provided, further, that for insurance issued on a

substandard basis, the calculation of any such adjusted premiums and present values may be

based on such other table of mortality as may be specified by the company and approved by

the commissioner.

(b) Any company may file with the commissioner a written notice of its election to comply with

the provisions of Subsection (6)(a) after a specified date before January 1, 1966. After filing

such notice, then upon such specified date, which is the operative date of Subsection (6)(a)

for such company, this Subsection (6)(a) shall become operative with respect to the ordinary

policies thereafter issued by such company. If a company makes no such election, the

operative date of Subsection (6)(a) for such company is January 1, 1966.

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(c)

(i) This Subsection (6)(c) does not apply to industrial policies issued after the operative date of

Subsection (6)(d) as defined in Subsection (6)(d). In the case of industrial policies issued

on or after the operative date of this Subsection (6)(c) as defined in this Subsection (6)

(c), all adjusted premiums and present values referred to in this section shall be calculated

on the basis of the Commissioner's 1961 Standard Industrial Mortality Table and the

rate of interest specified in the policy for calculating cash surrender values and paid-up

nonforfeiture benefits, provided that such rate of interest may not exceed 3-1/2% per

annum for policies issued before June 1, 1973, 4% per annum for policies issued after

May 31, 1973, and before April 2, 1980, and 5-1/2% per annum for policies issued after

April 2, 1980, except that for any single premium whole life or endowment insurance policy

issued after April 2, 1980, a rate of interest not exceeding 6-1/2% per annum may be used.

Provided, however, that in calculating the present value of any paid-up term insurance

with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates

of mortality assumed may be not more than those shown in the Commissioner's 1961

Industrial Extended Term Insurance Table. Provided, further, that for insurance issued on

a substandard basis, the calculation of any such adjusted premiums and present values

may be based on such other table of mortality as may be specified by the company and

approved by the commissioner.

(ii) Any company may file with the commissioner a written notice of its election to comply

with the provisions of this Subsection (6)(c) after a specified date before January 1, 1968.

After filing such notice, then upon that specified date, which is the operative date of this

Subsection (6)(c) for such company, this Subsection (6)(c) shall become operative with

respect to the industrial policies thereafter issued by such company. If a company makes

no such election, the operative date of this Subsection (6)(c) for such company shall be

January 1, 1968.

(d)

(i) This Subsection (6)(d) applies to all policies issued on or after the operative date of this

Subsection (6)(d) as defined in this Subsection (6)(d). Except as provided in Subsection

(6)(d)(vii), the adjusted premiums for any policy shall be calculated on an annual basis and

shall be such uniform percentage of the respective premiums specified in the policy for each

policy year, excluding amounts payable as extra premiums to cover impairments or special

hazards and also excluding any uniform annual contract charge or policy fee specified in

the policy in a statement of the method to be used in calculating the cash surrender values

and paid-up nonforfeiture benefits, that the present value, at the date of issue of policy, of all

adjusted premiums shall be equal to the sum of:

(A) the then present value of the future guaranteed benefits provided for by the policy;

(B) 1% of either the amount of insurance, if the insurance be uniform in amount, or the

average amount of insurance at the beginning of each of the first 10 policy years; and

that in applying the percentage specified in this Subsection (6)(d)(i)(C), no nonforfeiture

net level premium shall be considered to exceed 4% of either the amount of insurance, if

the insurance be uniform in amount, or the average amount of insurance at the beginning

of each of the first 10 policy years.

(ii) The date of issue of a policy for the purpose of this Subsection (6)(d) shall be the date as of

which the rated age of the insured is determined.

(iii) The nonforfeiture net level premium shall be equal to the present value, at the date of issue

of the policy, of the guaranteed benefits provided for by the policy divided by the present

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value, at the date of issue of the policy, of an annuity of one per annum payable on the date

of issue of the policy and on each anniversary of such policy on which a premium falls due.

(iv) In the case of policies which cause on a basis guaranteed in the policy unscheduled

changes in benefits or premiums, or which provide an option for changes in benefits or

premiums other than change to a new policy, the adjusted premiums and present values

shall initially be calculated on the assumption that future benefits and premiums do not

change from those stipulated at the date of issue of the policy. At the time of any such

change in the benefits or premiums the future adjusted premiums, nonforfeiture net level

premiums, and present values shall be recalculated on the assumption that future benefits

and premiums do not change from those stipulated by the policy immediately after the

change.

(v) Except as otherwise provided in Subsection (6)(d)(viii), the recalculated future adjusted

premiums for any such policy shall be such uniform percentage of the respective future

premiums specified in the policy for each policy year, excluding amounts specified in

the policy for each policy year, excluding amounts payable as extra premiums to cover

impairments and special hazards, and also excluding any uniform annual contract charge or

policy fee specified in the policy in a statement of the method to be used in calculating the

cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time

of change to the newly defined benefits or premiums, of all such future adjusted premiums

shall be equal to the excess of:

(A) the sum of:

(I) the then present value of the then future guaranteed benefits provided for by the policy;

and

(II) the additional expense allowance, if any; over

(B) the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit

under the policy.

(vi) The additional expense allowance, at the time of the change to the newly defined benefits

or premiums, shall be the sum of:

(A) 1% of the excess, if positive, of the average amount of insurance at the beginning of

each of the first 10 policy years subsequent to the change over the average amount

of insurance before the change at the beginning of each of the first 10 policy years

subsequent to the time of the most recent previous change, or, if there has been no

previous change, the date of issue of the policy; and

(B) 125% of the increase, if positive, in the nonforfeiture net level premium.

(vii) The recalculated nonforfeiture net level premium shall be equal to:

(A) the sum of:

(I) the nonforfeiture net level premium applicable before the change times the present

value of an annuity of one per annum payable on each anniversary of the policy on or

subsequent to the date of the change on which a premium would have fallen due had

the change not occurred; and

(II) the present value of the increase in future guaranteed benefits provided for by the policy;

divided by

(B) the present value of an annuity of one per annum payable on each anniversary of the

policy on or subsequent to the date of change on which a premium falls due.

(viii) Notwithstanding any other provision of this Subsection (6)(d) to the contrary, in the case

of a policy issued on a substandard basis which provides reduced graded amounts of

insurance so that, in each policy year, such policy has the same tabular mortality cost as

an otherwise similar policy issued on the standard basis which provides higher uniform

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amounts of insurance, adjusted premiums and present values for such substandard policy

may be calculated as if it were issued to provide such higher uniform amounts of insurance

on the standard basis.

(ix) Any adjusted premiums and present values referred to in this section shall:

(A) for policies of ordinary insurance be calculated on the basis of:

(I) the Commissioner's 1980 Standard Ordinary Mortality Table; or

(II) at the election of the company for any one or more specified plans of life insurance, the

Commissioner's 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality

Factors;

(B) for all policies of industrial insurance be calculated on the basis of the Commissioner's

1961 Standard Industrial Mortality Table; and

interest not exceeding the nonforfeiture interest rate as defined in Subsection (6)(d)(xi), for

policies issued in that calendar year.

(x) Notwithstanding Subsection (6)(d)(ix):

(A) At the option of the company, calculations for all policies issued in a particular calendar

year may be made on the basis of a rate of interest not exceeding the nonforfeiture

interest rate, as defined in Subsection (6)(d)(xi), for policies issued in the immediately

preceding calendar year.

(B) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any

cash surrender value available, whether or not required by Subsection (2), shall be

calculated on the basis of the mortality table and rate of interest used in determining the

amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any.

including paid-up additions under the policy, on the basis of an interest rate no lower than

that specified in the policy for calculating cash surrender values.

(D) In calculating the present value of any paid-up term insurance with accompanying pure

endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may

be not more than those shown in the Commissioner's 1980 Extended Term Insurance

Table for policies of ordinary insurance and not more than the Commissioner's 1961

Industrial Extended Term Insurance Table for policies of industrial insurance.

(E) For insurance issued on a substandard basis, the calculation of any such adjusted

premiums and present values may be based on appropriate modifications of the

aforementioned tables.

(F) For a policy issued before the operative date of the valuation manual, a Commissioner's

Standard Ordinary Mortality Tables, adopted after 1980 by the National Association of

Insurance Commissioners, that are approved by rules adopted by the commissioner

for use in determining the minimum nonforfeiture standard, may be substituted for the

Commissioner's 1980 Standard Ordinary Mortality Table with or without Ten-Year Select

Mortality Factors or for the Commissioner's 1980 Extended Term Insurance Table. For a

policy issued on or after the operative date of the valuation manual, the valuation manual

shall provide the Commissioner's Standard Mortality Table for use in determining the

minimum nonforfeiture standard that may be substituted for the Commissioner's 1980

Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for

the Commissioner's 1980 Extended Term Insurance Table. If the commissioner approves

by rule any Commissioner's Standard Ordinary Mortality Table adopted by the National

Association of Insurance Commissioners for use in determining the minimum nonforfeiture

standard for policies issued on or after the operative date of the valuation manual, then

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that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard

provided by the valuation manual.

(G) For a policy issued before the operative date of the valuation manual, any

Commissioner's Standard Industrial Mortality Tables, adopted after 1980 by the National

Association of Insurance Commissioners, that are approved by rules adopted by the

commissioner for use in determining the minimum nonforfeiture standard may be

substituted for the Commissioner's 1961 Industrial Extended Term Insurance Table. For a

policy issued on or after the operative date of the valuation manual, the valuation manual

shall provide the Commissioner's Standard Mortality Table for use in determining the

minimum nonforfeiture standard that may be substituted for the Commissioner's 1961

Standard Industrial Mortality Table or the Commissioner's 1961 Industrial Extended

Term Insurance Table. If the commissioner approves by rule any Commissioner's

Standard Industrial Mortality Table adopted by the National Association of Insurance

Commissioners for use in determining the minimum nonforfeiture standard for policies

issued on or after the operative date of the valuation manual, then that minimum

nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the

valuation manual.

(xi) The nonforfeiture interest rate is defined in this Subsection (6)(d)(xi):

(A) for a policy issued before the operative date of the valuation manual, the nonforteiture

interest rate per annum for any policy issued in a particular calendar year shall be equal

to 125% of the calendar year statutory valuation interest rate for such policy as defined

in the Standard Valuation Law, rounded to the nearest one-fourth of 1%, except that the

nonforfeiture interest rate may not be less than 4%; and

(B) for a policy issued on and after the operative date of the valuation manual, the

nonforfeiture interest rate per annum for any policy issued in a particular calendar year

shall be provided by the valuation manual.

(xii) Notwithstanding any other provision in this title to the contrary, any refiling of nonforfeiture

values or their methods of computation for any previously approved policy form which

involves only a change in the interest rate or mortality table used to compute nonforfeiture

values does not require refiling of any other provisions of that policy form.

(xiii) After the effective date of this Subsection (6)(d), any company may, at any time before

January 1, 1989, file with the commissioner a written notice of its election to comply with

the provisions of this subsection with regard to any number of plans of insurance after a

specified date before January 1, 1989, which specified date shall be the operative date of

this Subsection (6)(d) for the plan or plans, but if a company elects to make the provisions of

this subsection operative before January 1, 1989, for fewer than all plans, the company shall

comply with rules adopted by the commissioner. There is no limit to the number of times

this election may be made. If the company makes no such election, the operative date of

this subsection for such company shall be January 1, 1989.

(7) In the case of any plan of life insurance which provides for future premium determination, the

amounts of which are to be determined by the insurance company based on the estimates

of future experience, or in the case of any plan of life insurance which is of such nature that

minimum values cannot be determined by the methods described in Subsection (2), (3), (4), (5),

(6)(a), (6)(b), (6)(c), or (6)(d), then:

(a) the insurer shall demonstrate to the satisfaction of the commissioner that the benefits

provided under the plan are substantially as favorable to policyholders and insureds as the

minimum benefits otherwise required by Subsection (2), (3), (4), (5), (6)(a), (6)(b), (6)(c), or

(6)(d);

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(b) the plan of life insurance shall satisfy the commissioner that the benefits and the pattern of

premiums of that plan are not such as to mislead prospective policyholders or insureds; and

be less than the minimum values and benefits required for the plan computed by a method

consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as

determined by rules adopted by the commissioner.

(8)

(a)

(i) Any cash surrender value and any paid-up nonforfeiture benefit, available under the policy

in the event of default in a premium payment due at any time other than on the policy

anniversary, shall be calculated with allowance for the lapse of time and the payment of

fractional premiums beyond the last preceding policy anniversary.

(ii) All values referred to in Subsections (3), (4), (5), and (6) may be calculated upon the

assumption that any death benefit is payable at the end of the policy year of death.

(iii) The net value of any paid-up additions, other than paid-up term additions, may not be less

than the amounts used to provide such additions.

(b) Notwithstanding the provisions of Subsection (3), additional benefits specified in Subsection

(8)(c) and premiums for all such additional benefits shall be disregarded in ascertaining cash

surrender values and nonforfeiture benefits required by this section, and no such additional

benefits shall be required to be included in any paid-up nonforfeiture benefits.

(i) in the event of death or dismemberment by accident or accidental means;

(ii) in the event of total and permanent disability;

(iii) as reversionary annuity or deferred reversionary annuity benefits;

(iv) as term insurance benefits provided by a rider or supplemental policy provision to which, if

issued as a separate policy, this section would not apply;

(v) as term insurance on the life of a child or on the lives of children provided in a policy on the

life of a parent of the child, if such term insurance expires before the child's age is 26, if

uniform in amount after the child's age is one, and has not become paid-up by reason of the

death of a parent of the child; and

(vi) as other policy benefits additional to life insurance endowment benefits.

(9)

(a) This Subsection (9), in addition to all other applicable subsections of this section, applies to

all policies issued on or after January 1, 1985. Any cash surrender value available under the

policy in the event of default in a premium payment due on any policy anniversary shall be in

an amount which does not differ by more than 2/10 of 1% of either the amount of insurance,

if the insurance be uniform in amount, or the average amount of insurance at the beginning of

each of the first 10 policy years, from the sum of:

(i) the greater of zero and the basic cash value specified in Subsection (9)(b); and

(ii) the present value of any existing paid-up additions less the amount of any indebtedness to

the company under the policy.

(b) The basic cash value shall be equal to the present value, on such anniversary of the future

guaranteed benefits which would have been provided for by the policy, excluding any

existing paid-up additions and before deduction of any indebtedness to the company, if there

had been no default, less the then present value of the nonforfeiture factors, as defined in

Subsection (9)(c), corresponding to premiums which would have fallen due on and after such

anniversary. Provided, however, that the effects on the basic cash value of supplemental

life insurance or annuity benefits or of family coverage, as described in Subsection (3) or (5),

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whichever is applicable, shall be the same as are the effects specified in Subsection (3) or

(5), whichever is applicable, on the cash surrender values defined in that subsection.

the adjusted premium for the policy year, as defined in Subsection (5) or (6)(d), whichever is

applicable. Except as is required by the next succeeding sentence of this paragraph, such

percentage:

(i) shall be the same percentage for each policy year between the second policy anniversary

and the later of:

(A) the fifth policy anniversary; and

(B) the first policy anniversary at which there is available under the policy a cash surrender

value in an amount, before including any paid-up additions and before deducting any

indebtedness, of at least 2/10 of 1% of either the amount of insurance, if the insurance be

uniform in amount, or the average amount of insurance at the beginning of each of the first

10 policy years; and

(ii) shall be such that no percentage after the later of the two policy anniversaries specified in

Subsection (9)(a) may apply to fewer than five consecutive policy years.

(d) Provided, that no basic cash value may be less than the value which would be obtained if the

adjusted premiums for the policy, as defined in Subsection (5) or Subsection (6)(d), whichever

is applicable, were substituted for the nonforfeiture factors in the calculation of the basic

value.

(e) All adjusted premiums and present values referred to in this Subsection (9) shall for a

particular policy be calculated on the same mortality and interest bases as are used in

demonstrating the policy's compliance with the other subsections of this nonforfeiture law.

The cash surrender values referred to in this Subsection (9) shall include any endowment

benefits provided for by the policy.

(f) Any cash surrender value available other than in the event of default in a premium payment

due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available

under the policy in the event of default in a premium payment shall be determined in manners

consistent with the manners specified for determining the analogous minimum amounts in

Subsections (2), (3), (4), (5), (6), and (8). The amounts of any cash surrender values and

of any paid-up nonforfeiture benefits granted in connection with additional benefits such as

those listed as Subsection (8)(c) shall conform with the principles of this Subsection (9).

(10)

(a) This section does not apply to any of the following:

(i) reinsurance;

(ii) group insurance;

(iii) pure endowment;

(iv) an annuity or reversionary annuity contract;

(v) a term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment

benefits, or renewal thereof, of 20 years or less expiring before age 71, for which uniform

premiums are payable during the entire term of the policy;

(vi) a term policy of decreasing amount, which provides no guaranteed nonforfeiture or

endowment benefits, on which each adjusted premium, calculated as specified in

Subsections (5) and (6), is less than the adjusted premium so calculated, on a term policy

of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or

endowment benefits, issued at the same age and for the same initial amount of insurance,

and for a term of 20 years or less expiring before age 71, for which uniform premiums are

payable during the entire term of the policy;

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(vii) a policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no

cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the

beginning of any policy year, calculated as specified in Subsections (3), (4), (5), and (6)

exceeds 2-1/2% of the amount of insurance at the beginning of the same policy year; or

(viii) a policy which shall be delivered outside this state through an agent or other

representative of the company issuing the policy.

(b) For purposes of determining the applicability of this section, the age of expiry for a joint term

insurance policy shall be the age of expiry of the oldest life.

(11) The commissioner may adopt rules interpreting, describing, and clarifying the application of

this nonforfeiture law to any form of life insurance for which the interpretation, description, or

clarification is considered necessary by the commissioner, including unusual and new forms of

life insurance.

Amended by Chapter 163, 2016 General Session

31A-22-409 Standard Nonforfeiture Law for Individual Deferred Annuities.

(1) This section is known as the "Standard Nonforfeiture Law for Individual Deferred Annuities."

(2) This section does not apply to:

(a) reinsurance;

(b) a group annuity purchased under a retirement plan or plan of deferred compensation:

(i) established or maintained by:

(A) an employer, including a partnership or sole proprietorship;

(B) an employee organization; or

(ii) other than a plan providing individual retirement accounts or individual retirement annuities

under Section 408, Internal Revenue Code;

(d) a variable annuity;

(e) an investment annuity;

(f) an immediate annuity;

(g) a deferred annuity contract after annuity payments have commenced;

(h) a reversionary annuity; or

(i) a contract that is delivered outside this state through an agent or other representative of the

company issuing the contract.

(3)

(a) If a policy is issued after this section takes effect as set forth in Subsection (15), a contract of

annuity, except as stated in Subsection (2), may not be delivered or issued for delivery in this

state unless the contract of annuity contains in substance:

(i) the provisions described in Subsection (3)(b); or

(ii) provisions corresponding to the provisions described in Subsection (3)(b) that in the opinion

of the commissioner are at least as favorable to the contractholder, governing cessation of

payment of consideration under the contract.

(b) Subsection (3)(a)(i) requires the following provisions:

(i) the company shall grant a paid-up annuity benefit on a plan stipulated in the contract of such

a value as specified in Subsections (7), (8), (9), (10), and (12):

(A) upon cessation of payment of consideration under a contract; or

(B) upon a written request of the contract owner;

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(ii) if a contract provides for a lump-sum settlement at maturity, or at any other time, upon

surrender of the contract at or before the commencement of any annuity payments, the

company shall pay in lieu of any paid-up annuity benefit a cash surrender benefit of such

amount as is specified in Subsections (7), (8), (10), and (12);

(iii) a statement of the mortality table, if any, and interest rates used in calculating any of the

following that are guaranteed under the contract:

(A) minimum paid-up annuity benefit;

(B) cash surrender benefit; or

(iv) sufficient information to determine the amounts of the benefits described in Subsection (3)

(b)(iii);

(v) a statement that any paid-up annuity, cash surrender, or death benefits that may be

available under the contract are not less than the minimum benefits required by a statute of

the state in which the contract is delivered; and

(vi) an explanation of the manner in which a benefit described in Subsection (3)(b)(v) is altered

by the existence of any:

(A) additional amounts credited by the company to the contract;

(B) indebtedness to the company on the contract; or

provide that if no consideration is received under a contract for a period of two full years and

the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract

arising from consideration paid before the period would be less than $20 monthly:

(i) the company may at the company's option terminate the contract by payment in cash of the

then present value of such portion of the paid-up annuity benefit, calculated on the basis

of the mortality table specified in the contract, if any, and the interest rate specified in the

contract for determining the paid-up annuity benefit; and

(ii) the payment described in Subsection (3)(c)(i), relieves the company of any further obligation

under the contract.

(d) A company may reserve the right to defer the payment of cash surrender benefit for a period

not to exceed six months after demand for the payment of the cash surrender benefit with

surrender of the contract.

(4) For a policy issued before June 1, 2006, the minimum values as specified in Subsections (7),

(8), (9), (10), and (12) of any paid-up annuity, cash surrender, or death benefits available under

an annuity contract shall be based upon minimum nonforfeiture amounts as established in this

Subsection (4).

(a)

(i) With respect to a contract providing for flexible considerations, the minimum nonforfeiture

amount at any time at or before the commencement of any annuity payments shall be equal

to an accumulation up to such time, at a rate of interest of 3% per annum of percentages of

the net considerations paid before such time:

(A) decreased by the sum of:

(I) any prior withdrawals from or partial surrenders of the contract accumulated at a rate of

interest of 3% per annum; and

(II) the amount of any indebtedness to the company on the contract, including interest due

and accrued; and

(B) increased by any existing additional amounts credited by the company to the contract.

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(ii) For purposes of this Subsection (4)(a), the net consideration for a given contract year used

to define the minimum nonforfeiture amount shall be:

(A) an amount not less than zero; and

(B) equal to the corresponding gross considerations credited to the contract during that

contract year less:

(I) an annual contract charge of $30; and

(II) a collection charge of $1.25 per consideration credited to the contract during that

contract year.

(iii) The percentages of net considerations shall be:

(A) 65% of the net consideration for the first contract year; and

(B) 87-1/2% of the net considerations for the second and later contract years.

(iv) Notwithstanding Subsection (4)(a)(iii), the percentage shall be 65% of the portion of the

total net consideration for any renewal contract year that exceeds by not more than two

times the sum of those portions of the net considerations in all prior contract years for which

the percentage was 65%.

(b)

(i) Except as provided in Subsections (4)(b)(ii) and (iii), with respect to a contract providing for

fixed scheduled consideration, minimum nonforfeiture amounts shall be:

(A) calculated on the assumption that considerations are paid annually in advance; and

(B) defined as for contracts with flexible considerations that are paid annually.

(ii) The portion of the net consideration for the first contract year to be accumulated shall be

equal to an amount that is the sum of:

(A) 65% of the net consideration for the first contract year; and

(B) 22-1/2% of the excess of the net consideration for the first contract year over the lesser of

the net considerations for:

(I) the second contract year; and

(II) the third contract year.

(iii) The annual contract charge shall be the lesser of $30 or 10% of the gross annual

consideration.

nonforfeiture amounts shall be defined as for contracts with flexible considerations except

that:

(i) the percentage of net consideration used to determine the minimum nonforfeiture amount

shall be equal to 90%; and

(ii) the net consideration shall be the gross consideration less a contract charge of $75.

(5)

(a) For a policy issued on or after June 1, 2006, the minimum values as specified in Subsections

(7), (8), (9), (10), and (12) of any paid-up annuity, cash surrender, or death benefits available

under an annuity contract shall be based upon minimum nonforfeiture amounts as established

in this Subsection (5).

(b) The minimum nonforfeiture amount at any time at or before the commencement of any

annuity payments shall be equal to an accumulation up to such time, at rates of interest as

indicated in Subsection (5)(c), of 87-1/2% of the gross considerations paid before such time

decreased by the sum of:

(i) any prior withdrawals from or partial surrenders of the contract accumulated at rates of

interest as indicated in Subsection (5)(c);

(ii) an annual contract charge of $50, accumulated at rates of interest as indicated in

Subsection (5)(c);

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(iii) any premium tax paid by the company for the contract, accumulated at rates of interest as

indicated in Subsection (5)(c); and

(iv) the amount of any indebtedness to the company on the contract, including interest due and

accrued.

(c)

(i) The interest rate used in determining minimum nonforfeiture amounts shall be an annual rate

of interest determined as the lesser of:

(A) 3% per annum; or

(B) the five-year Constant Maturity Treasury Rate reported by the Federal Reserve, rounded

to the nearest 1/20th of 1%, as of a date or average over a period no longer than 15

months before the contract issue date or redetermination date under Subsection (5)(c)(iii):

(I) reduced by 125 basis points; and

(II) where the resulting interest rate is not less than 100 basis points, 1% for a policy issued

on or after June 1, 2006, and before June 1, 2021, or where the resulting interest rate is

not less than 15 basis points, 0.15% for a policy issued on or after June 1, 2021.

(ii) The interest rate shall apply for an initial period and may be redetermined for additional

periods.

(iii)

(A) If the interest rate will be reset, the contract shall state:

(I) the initial period;

(II) the redetermination date;

(III) the redetermination basis; and

(IV) the redetermination period.

(B) The basis is the date or average over a specified period that produces the value of the

five-year Constant Maturity Treasury Rate to be used at each redetermination date.

(d)

(i) During the period or term that a contract provides substantive participation in an equity

indexed benefit, the reduction described in Subsection (5)(c)(i)(B)(I) may be increased by up

to an additional 100 basis points to reflect the value of the equity index benefit.

(ii) The present value of the additional reduction at the contract issue date and at each

redetermination date may not exceed the market value of the benefit.

(iii)

(A) The commissioner may require a demonstration that the present value of the additional

reduction does not exceed the market value of the benefit.

(B) If the demonstration required under Subsection (5)(d)(iii)(A) is not made to the satisfaction

of the commissioner, the commissioner may disallow or limit the additional reduction.

(6) Notwithstanding Subsection (4), for a policy issued on or after June 1, 2004 and before June

1, 2006, at the election of a company, on a contract form-by-contract form basis, the minimum

values as specified in Subsections (7), (8), (9), (10), and (12) of any paid-up annuity, cash

surrender, or death benefits available under an annuity contract may be based upon minimum

nonforfeiture amounts as established in Subsection (5).

(7)

(a) A paid-up annuity benefit available under a contract shall be such that the contract's present

value on the date annuity payments are to commence is at least equal to the minimum

nonforfeiture amount on that date.

(b) The present value described in Subsection (7)(a) shall be computed using the mortality table,

if any, and the interest rate specified in the contract for determining the minimum paid-up

annuity benefits guaranteed in the contract.

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(8)

(a) For a contract that provides cash surrender benefits, the cash surrender benefits available

before maturity may not be less than the present value as of the date of surrender of that

portion of the cash surrender value that would be provided under the contract at maturity

arising from considerations paid before the time of cash surrender:

(i) decreased by the amount appropriate to reflect any prior withdrawals from or partial

surrender of the contract;

(ii) decreased by the amount of any indebtedness to the company on the contract, including

interest due and accrued; and

(iii) increased by any existing additional amounts credited by the company to the contract.

(b) For purposes of this Subsection (8), the present value is to be calculated on the basis of

an interest rate not more than 1% higher than the interest rate specified in the contract for

accumulating the net considerations to determine the maturity value.

that time.

(d) The death benefit under a contract described in Subsection (8)(a) shall be at least equal to

the cash surrender benefit.

(9)

(a) For a contract that does not provide cash surrender benefits, the present value of any paid-

up annuity benefit available as a nonforfeiture option at any time before maturity may not be

less than the present value of that portion of the maturity value of the paid-up annuity benefit

provided under the contract arising from considerations paid before the time the contract is

surrendered in exchange for, or changed to, a deferred paid-up annuity increased by any

existing additional amounts credited by the company to the contract.

(b) For purposes of Subsection (9)(a), the present value for the period before the maturity date is

to be calculated on the basis of the interest rate specified in the contract for accumulating the

net considerations to determine maturity value.

payments, the present values shall be calculated on the basis of the interest rate and the

mortality table specified in the contract for determining the maturity value of the paid-up

annuity benefit.

(d) In no event shall the present value of a paid-up annuity benefit be less than the minimum

nonforfeiture amount at that time.

(10)

(a) For the purpose of determining the benefits calculated under Subsections (8) and (9), the

maturity date shall be considered to be:

(i) in the case of an annuity contract issued on or before May 5, 2002, under which an election

may be made to have an annuity payment commence at an optional maturity date, the latest

date for which an election is permitted by the contract, except that it may not be considered

to be later than the later of:

(A) the anniversary of the contract next following the day on which the annuitant becomes 70

years old; or

(B) the tenth anniversary of the contract; or

(ii) in the case of an annuity contract issued on or after May 6, 2002, the latest date permitted

by the contract, except that the maturity date may not be considered to be later than the

later of:

(A) the anniversary of the contract next following the day on which the annuitant becomes 70

years old; or

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(B) the tenth anniversary of the contract.

(b) In the case of an annuity contract issued on or after May 6, 2002:

(i) for a contract that provides cash surrender benefits, the cash surrender value on or past the

maturity date shall be equal to the amount used to determine the annuity benefit payments;

and

(ii) a surrender charge may not be imposed on or past maturity.

(11) A contract that does not provide cash surrender benefits or does not provide death benefits

at least equal to the minimum nonforfeiture amount before the commencement of any annuity

payments shall include a statement in a prominent place in the contract that these benefits are

not provided.

(12) A paid-up annuity, cash surrender, or death benefit available at any time, other than on the

contract anniversary under a contract with fixed scheduled considerations, shall be calculated

with allowance for the lapse of time and the payment of any scheduled considerations beyond

the beginning of the contract year in which cessation of payment of considerations under the

contract occurs.

(13)

(a) For a contract that provides, within the same contract by rider or supplemental contract

provisions, both annuity benefits and life insurance benefits that are in excess of the greater

of cash surrender benefits or a return of the gross considerations with interest, the minimum

nonforfeiture benefits shall:

(i) be equal to the sum of:

(A) the minimum nonforfeiture benefits for the annuity portion; and

(B) the minimum nonforfeiture benefits, if any, for the life insurance portion; and

(ii) computed as if each portion were a separate contract.

(b)

(i) Notwithstanding Subsections (7), (8), (9), (10), and (12), additional benefits payable, as

described in Subsection (13)(b)(ii), and consideration for the additional benefits payable,

shall be disregarded in ascertaining, if required by this section:

(A) the minimum nonforfeiture amounts;

(B) paid-up annuity;

(D) death benefits.

(ii) For purposes of this Subsection (13), an additional benefit is a benefit payable:

(A) in the event of total and permanent disability;

(B) as reversionary annuity or deferred reversionary annuity benefits; or

(iii) The inclusion of the additional benefits described in this Subsection (13) may not be

required in any paid-up benefits, unless the additional benefits separately would require:

(A) minimum nonforfeiture amounts;

(B) paid-up annuity;

(D) death benefits.

(14) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

commissioner may adopt rules necessary to implement this section, including:

(a) ensuring that any additional reduction under Subsection (5)(d) is consistent with the

requirements imposed by Subsection (5)(d); and

(b) providing for adjustments in addition to the adjustments allowed under Subsection (5)(d) to

the calculation of minimum nonforfeiture amounts for:

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(i) a contract that provides substantive participation in an equity index benefit; and

(ii) a contract for which the commissioner determines adjustments are justified.

(15)

(a) After this section takes effect, a company may file with the commissioner a written notice of

the company's election to comply with this section after a specified date before July 1, 1988.

(b) This section applies to annuity contracts of a company issued on or after the date the

company specifies in the notice.

for such company is July 1, 1988.

Amended by Chapter 252, 2021 General Session

31A-22-410 Trustee and deposit agreements.

(1) An insurer may hold as a part of its general assets the proceeds of any life insurance policy

or annuity under a trust or other agreement, upon the terms and restrictions as to revocation

by the policyholder and control by the beneficiary, and with the exemptions from the claims of

creditors of the beneficiary as the insurer and the policyholder agree to in writing and as are

otherwise recognized by law.

(2) An insurer may also receive funds in amounts and upon conditions which the insurer and the

policyholder agree to in writing:

(a) as premiums in advance upon life insurance policies or annuities; or

(b) to accumulate for the purchase of future life insurance policies or annuities.

Enacted by Chapter 242, 1985 General Session

31A-22-411 Insurance policies providing variable benefits.

(1) An insurance policy that provides for payment of a benefit in a variable amount shall contain a

statement of the essential features of the procedure to be followed by the insurer in determining

the dollar amount of the variable benefits.

(2) A variable insurance policy shall contain:

(a) an appropriate nonforfeiture benefit in lieu of those required by either Section 31A-22-408 or

31A-22-409;

(b) an appropriate reinstatement provision in lieu of those required by Section 31A-22-407; and

by Section 31A-22-402.

(3) An individual insurance policy and a certificate issued under a group insurance policy shall

conspicuously state on its first page that:

(a) the dollar amount may decrease or increase according to investment experience; and

(b) a benefit under the insurance policy is payable on a variable basis.

(4) A life insurance or annuity policy with a variable benefit issued under a separate account shall,

on either the application or the insurance policy, state that the insurer's liabilities with respect to

a variable benefit under the insurance policy are subject to satisfaction only out of the insurer's

variable account assets.

(5)

(a) A variable insurance policy shall state whether it may be amended as to:

(i) investment policy;

(ii) voting rights; and

(iii) conduct of the business and affairs of a separate account.

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(b) Subject to any preemptive provision of federal law, an amendment of the type described in

this Subsection (5) is subject to:

(i) filing under Section 31A-21-201; and

(ii) approval by a majority of the policyholders in the separate account.

Amended by Chapter 10, 2010 General Session

31A-22-412 Assignment of life insurance rights.

(1) As used in this section, "final termination of a policy" means the day after which an insurer will

not reinstate a policy without requiring:

(a) evidence of insurability; or

(b) written application.

(2)

(a) Except as provided under Subsection (4), the owner of any rights in a life insurance policy or

annuity contract may assign any of those rights, including any right to designate a beneficiary

and the rights secured under Sections 31A-22-517 through 31A-22-521 and any other

provision of this title.

(b) An assignment, valid under general contract law, vests the assigned rights in the assignee,

subject, so far as reasonably necessary for the protection of the insurer, to any provisions in

the insurance policy or annuity contract inserted to protect the insurer against double payment

or obligation.

(3) The rights of a beneficiary under a life insurance policy or annuity contract are subordinate to

those of an assignee, unless the beneficiary was designated as an irrevocable beneficiary prior

to the assignment.

(4) Assignment of insurance rights may be expressly prohibited by an annuity contract which

provides annuities as retirement benefits related to employment contracts.

(5)

(a) After July 1, 1986, when a life insurance policy or annuity is assigned in writing as security for

an indebtedness, the insurer shall mail to the assignee a copy of any cancellation notice sent

with respect to the policy, if the insurer has received:

(i) written notice of the assignment;

(ii) the name and address of the assignee; and

(iii) a request for assignment notice from the assignee.

(b) An insurer shall mail the cancellation notice described in Subsection (5)(a):

(i) prepaid, and addressed to the assignee's address filed with the insured;

(ii) not less than 10 days before the final termination of the policy; and

(iii) each time the insured fails or refuses to transmit a premium payment to the insurer before

the commencement of the policy's grace period.

of complying with this section, but in no event to exceed $5 for each notice.

(6) In lieu of providing notices to assignees of final termination of the policy under Subsection (5),

an insurer may provide an assignee with an identical copy of all notices sent to the owner of the

life insurance policy, provided these notices comply with the other requirements of this title.

Amended by Chapter 32, 2020 General Session

31A-22-413 Designation of beneficiary.

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(1) Subject to Subsection 31A-22-412(3), no life insurance policy or annuity contract may restrict

the right of a policyholder or certificate holder:

(a) to make an irrevocable designation of beneficiary effective immediately or at some

subsequent time; or

(b) if the designation of beneficiary is not explicitly irrevocable, to change the beneficiary without

the consent of the previously designated beneficiary. Subsection 75-6-201(1)(c) applies to

designations by will or by separate writing.

(2)

(a) An insurer may prescribe formalities to be complied with for the change of beneficiaries, but

those formalities may only be designed for the protection of the insurer. Notwithstanding

Section 75-2-804, the insurer discharges its obligation under the insurance policy or certificate

of insurance if it pays the properly designated beneficiary unless it has actual notice of either

an assignment or a change in beneficiary designation made pursuant to Subsection (1)(b).

(b) The insurer has actual notice if the formalities prescribed by the policy are complied with, or

if the change in beneficiary has been requested in the form prescribed by the insurer and

delivered to an agent representing the insurer at least three days prior to payment to the

earlier properly designated beneficiary.

Amended by Chapter 32, 2020 General Session

31A-22-414 Evidence as to death.

The rules relating to determination of death under Section 75-1-107 are applicable to life

insurance.

Amended by Chapter 30, 1992 General Session

31A-22-415 Simultaneous death.

Section 75-2-702 applies to all policies of life and accident and health insurance.

Amended by Chapter 116, 2001 General Session

31A-22-416 Reserved.

Enacted by Chapter 242, 1985 General Session

31A-22-417 Physical examination and autopsy.

A life insurer may, at its own expense, examine the body of the insured when and as often as

the insurer reasonably requires during the pendency of a claim, and it may make an autopsy in

case of death where it is reasonably necessary and not forbidden by law.

Enacted by Chapter 242, 1985 General Session

31A-22-418 Participating and nonparticipating policies.

(1)

(a) A stock insurer and a mutual insurer may issue both participating and nonparticipating life

insurance policies and annuity contracts, subject to this section.

(b) A fraternal insurer issuing life insurance policies in this state may only issue participating

policies, except for the following nonparticipating policies:

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(i) paid-up, temporary, pure endowment insurance, and annuity settlements provided in

exchange for lapsed, surrendered, or matured policies;

(ii) annuities beginning within one year of the making of the contract; and

(iii) those term insurance policies which the commissioner exempts by rule.

(2) Every participating policy shall by its terms give its holder full right to participate annually in the

surplus accumulations from the participating business of the insurer that are distributed.

(3) Every insurer issuing both participating and nonparticipating policies shall separately account

for the two classes of business.

(4)

(a) No life insurance policy or certificate may be issued in which the accounting, apportionment,

and distribution of surplus is deferred for a period longer than three years.

(b) Every insurer doing a participating business shall annually ascertain the surplus over required

reserves and other liabilities. After setting aside the contingency reserves it considers

necessary and as are required by law, the reasonable nondistributable surplus needed to

permit orderly growth, making provision for the payment of reasonable dividends upon capital

stock and those sums as are required by prior contracts to be held for deferred dividend

policies, the remaining surplus shall be equitably apportioned and returned as a dividend

to the participating policyholders or certificate-holders entitled to share in the dividend. A

dividend may be conditioned on the payment of the succeeding year's premium only on the

first and second anniversaries of the policy.

Amended by Chapter 204, 1986 General Session

31A-22-419 Insurer's purchase of and loans on policies.

Any life insurer may purchase for its own benefit any policy of insurance or other obligation

of the company and any claim of its policyholders. The insurer may also lend to the holders of

policies of the company a sum which does not exceed the sum of the cash value of the policies

and the surplus or dividend additions to the policies. The policies and all additions to them shall be

security for payment of the loan. An insurer's security interest in a policy under this section need

not be filed under Title 70A, Chapter 9a, Uniform Commercial Code - Secured Transactions, to be

perfected.

Amended by Chapter 252, 2000 General Session

31A-22-420 Policy loans.

(1) This section applies to all life insurance policies and annuity contracts, including certificates

issued by fraternal insurers, which contain policy loan provisions. A "policy loan" includes any

arrangement by which a premium is paid to the life insurer after the normal due date.

(2) As used in this section, "published monthly average" means:

(a) The monthly average of the composite yield on Moody's Corporate Bond Yield Average--

Monthly Average Corporates, as published by Moody's Investors Service, Inc., or any

successor to that publication; or

(b) in the event that Moody's Corporate Bond Yield Average--Monthly Average Corporates is no

longer published, a substantially similar average, established by the commissioner by rule.

(3)

(a) Policies issued on or after May 12, 1981, shall provide for policy loan interest rates by:

(i) a provision permitting a maximum interest rate of not more than 8% per annum; or

(ii) a provision permitting an adjustable maximum interest rate calculated under this section.

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(b) The rate of interest charged on a policy loan made under Subsection (3)(a)(ii) may not exceed

the higher of:

(i) the published monthly average for the calendar month ending two months before the date on

which the rate is determined; or

(ii) the rate used to compute cash surrender values under the policy during the same period,

plus 1% per annum.

contain a provision setting forth the frequency at which the rate is to be determined for that

policy.

(d) The maximum rate under Subsection (3)(a)(ii) for each policy shall be determined at regular

intervals at least once every 12 months, but not more frequently than once in any three-month

period. At the intervals specified in the policy:

(i) the rate being charged may be increased whenever the increase determined under

Subsection (3)(b) would increase that rate by 1/2% or more per annum; and

(ii) the rate being charged shall be reduced whenever the reduction determined under

Subsection (3)(b) would decrease that rate by 1/2% or more per annum.

(e) Every life insurer shall:

(i) notify the policyholder at the time a cash loan is made of the initial rate of interest on the

loan;

(ii) notify the policyholder with respect to premium loans of the initial rate of interest on the loan

as soon as it is reasonably practical to do so after making the initial loan, but notice need

not be given to the policyholder when a further premium loan is added, except as provided

in Subsection (3)(e)(iii);

(iii) send to policyholders with loans, reasonable advance notice of any increase in the rate; and

(iv) include in the notices required by Subsection (3)(e)(i), (ii), and (iii) the substance of the

pertinent provisions of Subsections (3)(a) and (c).

(f) No policy may terminate during a policy year solely because of a change in the interest rate

during that policy year. Coverage shall continue during that policy year until it would have

terminated if there had been no change in interest rate during that policy year.

(g) The pertinent provisions of Subsections (3)(a) and (c) shall be set forth in the policies to which

they apply.

(4) This section applies to an insurance policy issued before May 12, 1981, only if the policyholder

agrees to its application in writing, after receiving explicit disclosure of the provisions regarding

premiums, dividends, and nonforfeiture cash values of the existing and amended insurance

policies prior to execution of the written agreement. No other rights of the policyholder under

the insurance policy are affected by this agreement.

(5) The policy shall contain a provision permitting the insurer, upon the commissioner's approval, to

defer granting a policy loan for up to six months after application for the loan. Policy loans for

the payment of premium to the insurer may not be deferred under this subsection.

Amended by Chapter 204, 1986 General Session

31A-22-421 Facility of payment under certain life insurance policies.

A life insurance policy with a face value of $5,000 or less may provide that if the beneficiary

designated in the policy does not make a claim under the policy or does not surrender the policy

with due proof of death within a period stated in the policy, which may not be less than 30 days

after the death of the insured, or if the beneficiary is the estate of the insured, or is a minor, or dies

before the insured, or is not legally competent to give a valid release, then the insurer may make

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any payment under the policy to the executor or administrator of the insured, or to any relative of

the insured by blood or legal adoption or connection by marriage, or to any person appearing to

the insurer to be equitably entitled to the payment by reason of having incurred expense for the

maintenance, medical attention, or burial of the insured, or for other reasons. The policy may also

include a similar provision applicable to any other payment due under the policy.

Enacted by Chapter 242, 1985 General Session

31A-22-422 Conditional coverage.

Conditional or binding receipts or other documents issued by a life insurer, whatever they are

named, which conditionally grant life insurance coverage prior to physical delivery of the policy are

subject to the form filing requirements under Section 31A-21-201.

Enacted by Chapter 242, 1985 General Session

31A-22-423 Policy and annuity examination period.

(1)

(a) Except as provided under Subsection (2), a life insurance policy, life insurance certificate,

annuity contract, or annuity certificate shall contain a notice prominently printed on or

attached to the cover or front page of the policy, contract, or certificate stating that the

policyholder, contract holder, or certificate holder has the right to return the policy, contract, or

certificate for any reason on or before:

(i) 10 days after the day on which the policy, contract, or certificate is delivered; or

(ii) in case of a replacement policy, contract, or certificate, 30 days after the day on which the

replacement policy, contract, or certificate is delivered.

(b) For purposes of this section, "return" means a writing that:

(i) the policy, contract, or certificate is being returned for termination of coverage;

(ii) is:

(A) a written statement on the policy, contract, or certificate; or

(B) a writing that accompanies the policy, contract, or certificate; and

(iii) is delivered to or mailed first class to the insurer or the insurer's agent.

(d) A policyholder, contract holder, or certificate holder returning a policy or certificate is entitled

to a refund of any premium paid.

(2) This section does not apply to:

(a) group term life insurance issued under Section 31A-22-502;

(b) a group master policy;

(d) a credit life insurance certificate; and

(e) other classes of life insurance policies that the commissioner specifies by rule after finding

that a right to return those life insurance policies would be impracticable or unnecessary to

protect the policyholder's interests.

Amended by Chapter 307, 2007 General Session

31A-22-424 Documents constituting entire life insurance policy.

(1) A life insurance policy shall contain a provision that defines the documents and agreements

that constitute the entire contract between the parties.

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(2) Except as permitted by Section 31A-21-106, all documents and agreements defined under

Subsection (1) shall be attached to the policy.

Enacted by Chapter 116, 2001 General Session

31A-22-425 Rulemaking authority for standards related to life insurance and annuities.

In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commissioner

may make rules to establish standards for any of the following:

(1) if used in connection with the solicitation or sale of life insurance policies and contracts:

(a) a buyer's guide;

(b) a disclosure;

(d) a policy summary; or

(e) a recommendation; and

(2) in a life insurance policy, annuity contract, or life insurance or annuity certificate:

(a) a definition of a term;

(b) a disclosure;

(d) a limitation.

Amended by Chapter 382, 2008 General Session

31A-22-426 Coverage description.

(1) Each life insurance policy, annuity contract, and certificate of life insurance shall contain a brief

description printed on the cover page.

(2) The description shall include:

(a) the type of insurance;

(b) whether it is participating or nonparticipating;

(d) a significant specific feature stated or included in the filed policy, contract, or certificate.

Enacted by Chapter 125, 2005 General Session

31A-22-427 Life insurance and annuity policy records.

A life insurer, and its successors, shall maintain all records that affect the legal effect of a life

insurance policy, annuity contract, or certificate of life insurance for the term of the insurance plus

five years.

Enacted by Chapter 125, 2005 General Session

31A-22-428 Interest payable on life insurance proceeds.

(1) For a life insurance policy delivered or issued for delivery in this state on or after May 5, 2008,

the insurer shall pay interest on the death proceeds payable upon the death of the insured.

(2)

(a) Except as provided in Subsection (4), for the period beginning on the date of death and

ending the day before the day described in Subsection (3)(b), interest under Subsection (1)

shall accrue at a rate no less than the greater of:

(i) the rate applicable to policy funds left on deposit; and

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(ii) the Two Year Treasury Constant Maturity Rate as published by the Federal Reserve.

(b) If there is no rate applicable to policy funds on deposit as stated in Subsection (2)(a)(i), then

the Two Year Treasury Constant Maturity Rates as published by the Federal Reserve applies.

death occurs.

(d) Interest is payable until the day on which the claim is paid.

(3)

(a) Unless the claim is paid and except as provided in Subsection (4), beginning on the day

described in Subsection (3)(b) and ending the day on which the claim is paid, interest shall

accrue at the rate in Subsection (2) plus additional interest at the rate of 10% annually.

(b) Interest accrues under Subsection (3)(a) beginning with the day that is 31 days from the latest

of:

(i) the day on which the insurer receives proof of death;

(ii) the day on which the insurer receives sufficient information to determine:

(A) liability;

(B) the extent of the liability; and

(iii) the day on which:

(A) legal impediments to payment of proceeds that depend on the action of parties other than

the insurer are resolved; and

(B) the insurer receives sufficient evidence of the resolution of the legal impediments

described in Subsection (3)(b)(iii)(A).

(4) A court of competent jurisdiction may require payment of interest from the date of death to the

day on which a claim is paid at a rate equal to the sum of:

(a) the rate specified in Subsection (2); and

(b) the legal rate identified in Subsection 15-1-1(2).

Amended by Chapter 290, 2014 General Session

Amended by Chapter 300, 2014 General Session

31A-22-429 Producer's duties related to replacement of life insurance or annuity.

(1) In connection with or as part of each application for life insurance or annuities, the applicant

shall complete and the producer shall submit to the insurer the statements required by rule

made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, as to:

(a) whether the applicant has existing policies or contracts; and

(b) whether the proposed life insurance or annuity will replace, discontinue, or change an existing

policy or contract.

(2) If an applicant for life insurance or an annuity answers "yes" to the question regarding

replacement, discontinuance, or change of an existing policy or contract referred to in

Subsection (1), the producer shall present to the applicant, not later than at the time of taking

the application, the notice regarding replacements in the form adopted by the commissioner

by rule made in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, or

other substantially similar document filed with the commissioner.

(3)

(a) The notice described in Subsection (2) shall:

(i) list each existing policy or contract contemplated to be replaced, properly identified by name

of insurer, the insured or annuitant, and policy or contract number if available; and

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(ii) include a statement as to whether each policy or contract will be replaced or whether a

policy will be used as a source of financing for the new policy or contract.

(b) If a policy or contract number has not been issued by the existing insurer, alternative

identification, such as an application or receipt number, shall be listed.

(4) In connection with a replacement transaction, the producer shall leave with the applicant by

no later than at the time of policy or contract delivery the original or a copy of all printed sales

material. With respect to electronically presented sales material, it shall be provided to the

policy or contract holder in printed form no later than at the time of policy or contract delivery.

(5) Except as provided in rule made by the commissioner in accordance with Title 63G, Chapter

3, Utah Administrative Rulemaking Act, in connection with a replacement transaction, the

producer shall submit to the insurer to which an application for a policy or contract is presented:

(a) a copy of each document required by this section;

(b) a statement identifying any preprinted or electronically presented company approved sales

materials used; and

policy or contract purchased.

Enacted by Chapter 319, 2013 General Session

31A-22-430 Policy notification.

(1)

(a) An insurer that delivers or issues for delivery an individual life insurance policy in this state

shall notify the applicant for the policy, in writing at the time of application for the policy, of

an applicant's right to designate a third party to receive notice of lapse or cancellation of the

policy based on nonpayment of premium.

(b) An applicant may make a designation described in Subsection (1)(a) at the time of application

for the policy, or at any time the policy is in force, by submitting a written notice to the insurer

containing the name and address of the third-party designee.

(2) In accordance with Subsection 31A-22-402(5), an insurer shall transmit a copy of a notice

of lapse or cancellation of the policy based on nonpayment of premium to a third party

designated in accordance with this section in addition to the transmission of the notice of lapse

or cancellation of the policy to the policyholder.

(3) The designation of a third party under this section does not constitute acceptance of any liability

on the part of the third party or insurer for a service provided to the policyholder.

Amended by Chapter 221, 2021 General Session

31A-22-431 Living organ donor coverage.

(1) For the purposes of this section, "living organ donor" means the same as that term is defined in

Section 31A-22-655.

(2) An insurer may not:

(a) deny eligibility for coverage or limit coverage of a individual under a life insurance policy or

contract solely due to the status of the individual as a living organ donor;

(b) preclude an individual from donating all or part of an organ as a condition of receiving or

continuing to receive coverage under a life insurance policy or contract; or

condition of a life insurance policy or contract for an individual based upon the status of the

individual as a living organ donor without any additional actuarial risk.

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(3) The commissioner shall make educational materials available to insurers and the public on the

access of living organ donors to insurance.

(4) The commissioner may make rules in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act, to implement the provisions of this section.

Enacted by Chapter 128, 2020 General Session

Part 5

Group Life Insurance

31A-22-501 Eligible groups.

A group insurance policy offering life insurance or a blanket insurance policy offering life

insurance may not be delivered in Utah unless the insured group:

(1) falls within at least one of the classifications under Sections 31A-22-501.1 through 31A-22-509;

and

(2) is formed and maintained in good faith for purposes other than obtaining insurance.

Amended by Chapter 252, 2021 General Session

31A-22-501.1 Employer groups.

(1) The lives of a group of individuals may be insured under a policy:

(a) issued as a policyholder, to:

(i) an employer; or

(ii) an employer sponsored trust for the benefit of the employer's employees;

(b) having an insurable interest as stated in Subsection 31A-21-104(3)(d); and

(2) A policy issued under this section is not subject to:

(a) Section 31A-21-311; and

(b) Sections 31A-22-516 through 31A-22-522.

Amended by Chapter 263, 2008 General Session

31A-22-502 Employee groups.

(1) As used in this section:

(a) "Employees" includes:

(i) for one or more affiliated corporations, proprietorships, or partnerships under common

control, their:

(A) officers;

(B) managers;

(D) individual proprietors or partners; and

(ii) for a trusteeship, if their duties are primarily connected with the trusteeship:

(A) trustees;

(B) employees of trustees; or

(b) "Employer" includes a Utah public agency.

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(c)

(i) "Utah public agency" means a public institution that:

(A) derives its authority from this state; and

(B) is not privately owned.

(ii) "Utah public agency" includes:

(A) a local political subdivision as defined in Section 11-14-102;

(B) the state;

(D) all public educational institutions.

(2) The lives of a group of individuals may be insured under a policy:

(a) issued as policyholder, to:

(i) an employer; or

(ii) the trustees of a fund established by an employer;

(b) insuring employees of the employer for the benefit of persons other than the employer; and

(3)

(a) All the employer's employees or all of any class of employees of the employer shall be eligible

for insurance under the policy described in Subsection (2).

(b) A policy issued to insure the employees of a public body may include elected or appointed

officials.

(4) A Utah public agency may pay or authorize the payment out of the Utah public agency's

corporate revenue, the premiums required to maintain the group insurance in force.

(5)

(a) The premiums for the policy described in Subsection (2) shall be paid by the policyholders:

(i) from the employer's funds;

(ii) funds contributed by the insured employees; or

(iii) both the funds described in Subsections (5)(a)(i) and (ii).

(b) Except as provided under Section 31A-22-512, a policy on which no part of the premium is

contributed by the insured employees shall insure all eligible employees.

Amended by Chapter 105, 2005 General Session

31A-22-503 Labor union or similar employee organization groups.

The lives of a group of individuals may be insured under a policy issued to a labor union or

similar employee organization as policyholder. This policy shall insure members of the union or

organization for the benefit of persons other than the union or organization or of any of its officials,

representatives, or agents, subject to the following requirements:

(1) The members eligible for the insurance are all of the members or all of any classes of the

members.

(2) The premium for the policy shall be paid by the policyholder, either from funds of the union or

organization, from funds contributed by the insured members specifically for their insurance,

or from both. Except as provided under Section 31A-22-512, a policy on which no part of the

premium is contributed by the insured members specifically for their insurance shall insure all

eligible members.

Enacted by Chapter 242, 1985 General Session

31A-22-504 Trustee groups.

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(1) A group insurance policy offering life insurance may be issued to:

(a) policyholders who are the trustees of a fund established by two or more employers, by one

or more labor unions, or similar employee organizations, or by one or more employers and

one or more labor unions or similar employee organizations, to insure employees of the

employers or members of the unions or the organizations for the benefit of persons other than

the employers, the unions, or the organizations; or

(b) notwithstanding Subsection 31A-22-501(2):

(i) a Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal Labor

Management Relations Act; or

(ii) a trustee under a trust established for the purpose of facilitating the continuation of a policy

when an individual's coverage would otherwise end, if the participating group through which

the original coverage was offered would be eligible under this section, Section 31A-22-502,

or Section 31A-22-503.

(2) A group insurance policy offering life insurance is subject to the following requirements:

(a) the persons eligible for insurance are all of the employees of the employers or all of the

members of the unions or organizations, or all of any classes of employees or members;

(b) the policy may include retired or former employees or members, elected and appointed

officials of a public agency if the employees of the agency are insured, and individual

proprietors or partners who are employers;

principally connected with the trusteeship;

(d) the premiums for the policy are paid by the policyholders from funds contributed by the

employers, unions, or similar employee organizations, or from funds contributed by the

insured persons, or any combination of these; and

(e) except as provided under Section 31A-22-512, a policy on which no part of the premium is

contributed by the insured persons specifically for the insured persons' insurance is required

to insure all eligible persons.

Amended by Chapter 252, 2021 General Session

31A-22-505 Association groups.

(1) An insurer may issue a group insurance policy offering life insurance to an association group if:

(a) the commissioner authorizes the association group;

(b) the benefits of the group insurance policy are reasonable in relation to the premiums charged

for the policy; and

(i) purchases insurance on a group basis on behalf of the association group's members;

(ii) is formed and maintained for a shared substantially common purpose that:

(A) is not related to obtaining insurance; and

(B) is the same profession, trade, or occupation or has some common economic,

representation of interest, or genuine organizational relationship;

(iii) has at least 100 members;

(iv) has been actively in existence for at least five years;

(v) has a constitution and bylaws that require:

(A) the association to hold regular meetings not less than annually to further the purpose of

the association's members; and

(B) members of the association to have voting privileges and representation on any governing

board or committee;

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(vi) does not condition membership in the association group on any health status-related factor;

(vii) makes insurance offered through the association group available exclusively to a member

of the association; and

(viii) only offers insurance through the association group in connection with a member of the

association group.

(2) A group insurance policy offering life insurance that an insurer issues to an association group

may insure members and employees of the association, employees of the members, one or

more of the preceding entities, or all of any classes of these named entities for the benefit of

persons other than the employees' employer, or any officials, representatives, trustees, or

agents of the employer or association.

(3)

(a) The following shall pay the premium under a group insurance policy offering life insurance

that an insurer issues to an association group:

(i) the policyholder from funds contributed by the association;

(ii) employer members, from funds contributed by the covered persons; or

(iii) from any combination of Subsections (3)(a)(i) and (ii).

(b) Except as provided under Section 31A-22-512, a policy on which no part of the premium is

contributed by the covered persons, specifically for their insurance, is required to insure all

eligible persons.

(4)

(a) An association group that meets the requirements described under Subsection (1) shall

disclose the following to each insured member:

(i) each cost related to joining and maintaining membership in the association;

(ii) that membership fees or dues are in addition to the policy premium;

(iii) that the association group holds the master group insurance policy;

(iv) that the association group and insurer determine the amount of the premium charged and

the terms and conditions of coverage under the group insurance policy; and

(v) that the association group policyholder and insurer may change the premium and terms and

conditions of coverage under the insurance policy:

(A) through agreement; and

(B) without the consent of the individual certificate holder.

(b) If an insurer collects membership fees or dues on behalf of an association, the insurer

shall disclose to each member of the association that the insurer is billing and collecting

membership fees and dues on behalf of the association.

Amended by Chapter 252, 2021 General Session

31A-22-506 Creditor groups to insure debtors.

(1) To insure debtors of a creditor, a group life insurance policy may be issued to a policyholder

who is any of the following:

(a) the creditor;

(b) the creditor's parent holding company; or

(2) A policy described in Subsection (1) is subject to the requirements of this Subsection (2).

(a)

(i) The persons eligible for insurance are:

(A) all of the debtors of the creditors; or

(B) all of any classes of debtors.

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(ii) The policy may provide that "debtors" includes:

(A) borrowers of money, or purchasers or lessees of goods, services, property, rights, or

privileges for which payment is arranged through a credit transaction; and

(B) the debtors of one or more affiliated corporations, proprietorships, or partnerships under

common control with the policyholder.

(b)

(i) The premiums shall be paid by the policyholder, from:

(A) the creditor's funds;

(B) charges collected from the insured debtors; or

(ii) Except as provided under Section 31A-22-512, a policy on which no part of the premium is

contributed by insured debtors specifically for their insurance shall insure all eligible debtors.

(c)

(i) To the extent of the creditor's interest, the insurance may be payable to the creditor or to any

successor to the right, title, and interest of the creditor.

(ii) The payment shall reduce or extinguish the obligation of the debtor to the extent of the

payment.

(iii) When the amount of insurance exceeds the debt, the excess is payable to a beneficiary

other than the creditor named by the debtor, or to the debtor's estate.

(d) Group policies issued under this section are not subject to Sections 31A-22-516 through

31A-22-521.

Amended by Chapter 125, 2005 General Session

31A-22-507 Credit union groups.

(1) The lives of a group of individuals may be insured under a policy issued to a policyholder who

is:

(a) a credit union; or

(b) trustees or agents designated by two or more credit unions.

(2) A policy described in Subsection (1) shall insure members of a credit union for the benefit of

persons other than:

(a) the credit union;

(b) trustees of the credit union;

(d) an official of an entity described in Subsections (2)(a) through (c).

(3) The policies are subject to the requirements of this Subsection (3).

(a) The persons eligible for insurance are:

(i) all of the members of the credit union; or

(ii) all of any classes of the members of the credit union.

(b) The premiums shall be paid by the policyholder. Except as provided in Section 31A-22-512, a

policy on which no part of the premium is collected from the covered members specifically for

their insurance shall insure all eligible members.

31A-22-521.

Amended by Chapter 125, 2005 General Session

31A-22-508 National Guard groups.

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(1) A policy of group life insurance may be issued to a group comprised solely of members of the

Utah National Guard if the group policy is issued to an association of members.

(2) The association is the policyholder to insure members of the Utah National Guard for the

benefit of persons other than the association or any of its officials.

(3) The premium for the policy shall be paid by the policyholder, either from the association's own

funds, or from charges collected from the insured members specifically for the insurance.

Amended by Chapter 373, 2022 General Session

31A-22-509 Commissioner's authority to approve other groups.

A policy may be issued to a group other than those specified under Sections 31A-22-502

through 31A-22-508, if specifically authorized by the commissioner and if granting the permission

is not contrary to public policy. The commissioner may not grant permission to issue these types

of policies unless the insurer demonstrates to the commissioner's satisfaction that the proposed

group would be actuarially sound, would result in economies of acquisition and administration

which justify a group rate, and would not present hazards of adverse selection. The premiums

for the policy shall be paid by the policyholder, either from the policyholder's funds or from funds

contributed by the covered persons, or from both. Premiums for the policy and any contributions

by or on behalf of the insured persons shall be reasonable in relation to the benefits provided.

Enacted by Chapter 242, 1985 General Session

31A-22-510 Requirements for group life insurance delivered in another jurisdiction.

(1) A Utah resident may not be enrolled in a policy of group life insurance delivered in another

jurisdiction in violation of Subsection (2) or (3), notwithstanding any contrary provision in

Subsection 31A-1-103(3).

(2) Unless specifically authorized by the commissioner under Section 31A-22-509, coverage under

a group life insurance policy delivered in another jurisdiction may not be initially provided to any

person unless the policy conforms substantially to one of the types of groups specified under

Sections 31A-22-502 through 31A-22-508.

(3) Coverage may not be initially provided to any person in Utah under a group life policy issued

in another jurisdiction by an insurer not authorized to engage in life insurance business in Utah

unless the policyholder conforms substantially to the type of group specified under Section

31A-22-502, 31A-22-503, or 31A-22-504.

Amended by Chapter 116, 2001 General Session

31A-22-511 Dependents' coverage.

Any group life policy issued under Sections 31A-22-502 through 31A-22-505 or Section

31A-22-509 may insure the employees or members against loss due to the death of their spouses

and dependent children, or any classes of the employees or members. The premiums for the

insurance shall be paid by the policyholder from funds contributed by the person to whom the

policy has been issued, from funds contributed by the covered persons, or from both. Except as

provided under Section 31A-22-512, a policy on which no part of the premium for the dependent's

coverage is contributed by the covered persons shall insure all insured persons, including their

spouses and dependent or minor children.

Enacted by Chapter 242, 1985 General Session

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31A-22-512 Individual insurability.

(1) An insurer may exclude or limit the coverage under a group life policy on any person, including

a group member's dependent, as to whom the evidence of individual insurability is not

satisfactory to the insurer.

(2) The group life insurance policy shall contain a provision setting forth the conditions, if any,

under which the insurer reserves the right to require a person eligible for insurance to furnish

satisfactory evidence to the insurer of the individual insurability as a condition to part or all of

his coverage.

Enacted by Chapter 242, 1985 General Session

31A-22-513 Grace period.

(1)

(a) Every group life insurance policy shall contain a provision that the policyholder is entitled to

a grace period of not less than 31 days for the payment of any premium due except the first

payment of premium.

(b) During the grace period described in Subsection (1)(a) the death benefit coverage continues

in force, unless the policyholder gives the insurer written notice of discontinuance:

(i) in advance of the date of discontinuance; and

(ii) in accordance with the policy terms.

(2) The policy may require the policyholder to pay the pro rata premium for the time the policy is in

force during the grace period.

Amended by Chapter 114, 2000 General Session

31A-22-514 Incontestability.

The group life insurance policy shall contain a provision that the validity of the policy may not

be contested, except for nonpayment of premiums, after it has been in force for two years from

its date of issue. This provision shall also state that no statement made by any person insured

under the policy relating to his insurability may be used in contesting the validity of the insurance

with respect to which the statement was made after the insurance has been in force, prior to the

contest, for a period of two years during the person's lifetime, nor may the statement be used

unless it is contained in a written instrument signed by him. This type of provision does not

preclude the assertion of defenses based upon provisions in the policy which relate to eligibility for

coverage.

Enacted by Chapter 242, 1985 General Session

31A-22-515 Nonforfeiture.

If the group life insurance policy is not a term policy, it shall contain nonforfeiture provisions

which the commissioner determines to be equitable to the insured persons and to the policyholder.

The commissioner may not require that group life insurance policies contain the same nonforfeiture

provisions which are required for individual life insurance policies.

Enacted by Chapter 242, 1985 General Session

31A-22-516 Payment of benefits.

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Any sum which is due because of the death of the person insured is payable to the beneficiary

designated by the insured person, unless the policy contains conditions providing that the

beneficiary is a family member designated by the policy terms. The insurer may reserve in the

policy the right, if there is no designated beneficiary living at the death of the person insured as to

all or any part of the sum, to pay a part of the sum not exceeding $5,000 to any person appearing

to the insurer to be equitably entitled to that money by reason of having incurred expense for the

maintenance, medical attention, or burial of the insured or for other reasons.

Enacted by Chapter 242, 1985 General Session

31A-22-517 Conversion on termination of eligibility.

(1) Except as provided in Subsection (6), a person is entitled to be issued by an insurer, without

evidence of insurability, an individual policy offering life insurance without accident and health

or other supplementary benefits, if:

(a) any portion of insurance on a person covered by a policy ceases because of:

(i) termination of employment; or

(ii) termination of membership in the classes eligible for coverage;

(b) an application for the individual policy is made; and

described in Subsection (1)(a) occurs.

(2) The individual policy described in Subsection (1) shall, at the option of the person entitled to the

policy, be on any form then customarily provided by the insurer at the age and for the amount

applied for, except that the group policy may exclude the option to elect:

(a) term insurance; or

(b) flexible premium insurance.

(3)

(a) The individual policy described in Subsection (1) shall be for an amount equal to or, at

the election of the person entitled, less than the life insurance that ceases because of the

termination described in Subsection (1)(a), less the amount of any group life insurance for

which the person is eligible within 30 days after the day on which the termination described in

Subsection (1)(a) occurs.

(b) Any amount of insurance that matures on or before the termination, as an endowment

payable to the person insured, is not included in the amount that is considered to cease

because of the termination whether the endowment payment is in:

(i) one sum;

(ii) installments; or

(iii) the form of an annuity.

(4) The premium on the individual policy described in Subsection (1) shall be at the insurer's

customary rate at the time of termination, which is applicable to:

(a) the form and amount of the individual policy;

(b) the class of risk to which the person belonged when terminated from the group policy; and

(5) Subject to the conditions of this section, the conversion privilege described in this section is

available:

(a) to a surviving dependent, if any, at the death of the employee or member, with respect to the

survivor's coverage under the group policy that terminates by reason of the death; and

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(b) to the dependent of the employee or member upon termination of coverage of the dependent,

while the employee or member remains insured, because the dependent ceases to be a

qualified dependent under the group policy.

(6) This section does not apply to an insured whose coverage will continue being the policy of

group life insurance issued to a group as authorized under Subsection 31A-22-504(1)(b)(ii).

Amended by Chapter 252, 2021 General Session

31A-22-518 Conversion on termination of policy.

(1) Subject to Subsection (2), if the group policy terminates or is amended to terminate the

insurance of any class of covered persons, every insured person whose insurance terminates,

including the insured dependent of a covered person who has been insured for at least

five years prior to the termination date, is entitled to have the insurer issue to the person

an individual policy of life insurance, subject to the conditions and limitations in Section

31A-22-517.

(2) The group policy described in Subsection (1) shall provide that the amount of the individual

policy may not be less than the smaller of:

(a) the amount of the person's life insurance protection ceasing because of the termination or

amendment of the group policy, less the amount of any life insurance for which the person is

eligible under any group policy issued or reinstated by the same or another insurer within 30

days after the termination; or

(b) $10,000.

Amended by Chapter 116, 2001 General Session

31A-22-519 Death pending conversion.

If a person insured under a group life insurance policy, or the insured dependent of that person,

dies during the period of eligibility for conversion under Section 31A-22-517 or 31A-22-518 and

before the individual policy becomes effective, the amount of life insurance to which the insured

would have been entitled to have issued under the individual policy is payable as a claim under the

group policy, whether or not application for the individual policy or the payment of the first premium

has been made.

Amended by Chapter 319, 2013 General Session

31A-22-520 Continuation of coverage during total disability.

(1) An insured person in a group life insurance policy may continue coverage during the total

disability of the insured person or dependent by timely payment to the policyholder of that

portion, if any, of the premium that would have been required on behalf of the insured person in

the absence of total disability.

(2) The continuation shall be on a premium paying basis until the earlier of:

(a) six months from the date of total disability;

(b) approval by the insurer of continuation of the coverage under any disability provision the

group insurance policy may contain; or

(3) If the group policy has a waiting period for an accident and health benefit, the continuation

extends to the end of the waiting period, even if the group policy is otherwise discontinued.

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Amended by Chapter 116, 2001 General Session

31A-22-521 Notice of right to convert under group policy.

Certificates of insurance evidencing coverage under a group life insurance policy shall

prominently notify individuals of conversion rights and contain information concerning the time and

manner in which conversion to an individual life insurance policy may be made.

Repealed and Re-enacted by Chapter 316, 1994 General Session

31A-22-522 Required provision for notice of termination.

(1) A group insurance policy offering life insurance coverage or a blanket insurance policy offering

life insurance coverage shall include a provision that obligates the policyholder to notify each

employee or group member:

(a) in writing;

(b) 30 days before the day on which the coverage terminates; and

(c)

(i) that the group insurance policy offering life insurance coverage or blanket insurance policy

offering life insurance coverage is being terminated; and

(ii) the rights the employee or group member has to convert coverage upon termination.

(2) For a group insurance policy offering life insurance coverage or a blanket insurance policy

offering life insurance coverage described in Subsection (1), an insurer shall:

(a) include a statement of a policyholder's obligations under Subsection (1) in the insurer's

monthly notice to the policyholder of premium payments due; and

(b) provide a sample notice to the policyholder at least once a year.

Amended by Chapter 252, 2021 General Session

Part 6

Accident and Health Insurance

31A-22-600 Scope of Part 6.

(1) Except where a provision's application is otherwise specifically limited, this part applies to all:

(a) accident and health insurance contracts, including credit accident and health;

(b) franchise;

(d) life insurance and annuity policies that directly or through a rider provide:

(i) accident and health insurance benefits; or

(ii) accelerated benefits where the receipt of benefits is contingent on morbidity requirements.

(2) Nothing in this part applies to or affects:

(a) workers' compensation insurance;

(b) reinsurance; or

elevator, automobile, or other insurance covering loss of or damage to property, provided the

loss, damage, or expense arises out of a hazard directly related to the other insurance.

(3) Except as provided in Subsection (1), this part does not apply to or affect a life insurance or

annuity policy including a life insurance policy:

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(a) with a rider or supplemental benefit that accelerates the death benefit contingent upon a

mortality risk specifically for one or more of the qualifying events of:

(i) terminal illness;

(ii) medical conditions requiring extraordinary medical intervention; or

(iii) permanent institutional confinement; and

(b) that provides the option of a lump-sum payment for those benefits.

Amended by Chapter 252, 2021 General Session

31A-22-601 Applicability of life insurance provisions.

Sections 31A-22-412 through 31A-22-417 apply to death benefits in accident and health

insurance policies.

Amended by Chapter 116, 2001 General Session

31A-22-602 Premium rates.

(1) Except as provided in Subsection 31A-22-701(4), this section does not apply to group accident

and health insurance.

(2) The benefits in an accident and health insurance policy shall be reasonable in relation to the

premiums charged.

(3) The commissioner shall prohibit the use of an accident and health insurance form or rates if the

form or rates do not satisfy Subsection (2).

Amended by Chapter 198, 2022 General Session

31A-22-603 Persons insured under an individual accident and health policy.

A policy of individual accident and health insurance may insure only one person, except that

originally or by subsequent amendment, upon the application of an adult policyholder, a policy may

insure any two or more eligible members of the policyholder's family, including spouse, dependent

children, and any other person dependent upon the policyholder.

Amended by Chapter 138, 2016 General Session

31A-22-604 Reimbursement by insurers of Medicaid benefits.

(1) As used in this section, "Medicaid" means the program under Title XIX of the federal Social

Security Act.

(2) Any accident and health insurer, including a group accident and health insurance plan, as

defined in Section 607(1), Federal Employee Retirement Income Security Act of 1974, or health

maintenance organization as defined in Section 31A-8-101, is prohibited from considering the

availability or eligibility for medical assistance in this or any other state under Medicaid, when

considering eligibility for coverage or making payments under its plan for eligible enrollees,

subscribers, policyholders, or certificate holders.

(3) To the extent that payment for covered expenses has been made under the state Medicaid

program for health care items or services furnished to an individual in any case when a third

party has a legal liability to make payments, the state is considered to have acquired the rights

of the individual to payment by any other party for those health care items or services.

(4) Title 26B, Chapter 3, Part 10, Medical Benefits Recovery, applies to reimbursement of insurers

of Medicaid benefits.

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Amended by Chapter 327, 2023 General Session

31A-22-605 Accident and health insurance standards.

(1) The purposes of this section include:

(a) reasonable standardization and simplification of terms and coverages of individual and

franchise accident and health insurance policies, including accident and health insurance

contracts of insurers licensed under Chapter 7, Nonprofit Health Service Insurance

Corporations, and Chapter 8, Health Maintenance Organizations and Limited Health Plans, to

facilitate public understanding and comparison in purchasing;

(b) elimination of provisions contained in individual and franchise accident and health insurance

contracts that may be misleading or confusing in connection with either the purchase of those

types of coverages or the settlement of claims; and

(2) This section applies to all individual and franchise accident and health policies.

(3) The commissioner shall adopt rules, made in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act, relating to the following matters:

(a) standards for the manner and content of policy provisions, and disclosures to be made in

connection with the sale of policies covered by this section, dealing with at least the following

matters:

(i) terms of renewability;

(ii) initial and subsequent conditions of eligibility;

(iii) nonduplication of coverage provisions;

(iv) coverage of dependents;

(v) preexisting conditions;

(vi) termination of insurance;

(vii) probationary periods;

(viii) limitations;

(ix) exceptions;

(x) reductions;

(xi) elimination periods;

(xii) requirements for replacement;

(xiii) recurrent conditions;

(xiv) coverage of persons eligible for Medicare; and

(xv) definition of terms;

(b) minimum standards for benefits under each of the following categories of coverage in policies

covered in this section:

(i) basic hospital expense coverage;

(ii) basic medical-surgical expense coverage;

(iii) hospital confinement indemnity coverage;

(iv) major medical expense coverage;

(v) income replacement coverage;

(vi) accident only coverage;

(vii) specified disease or specified accident coverage;

(viii) limited benefit health coverage; and

(ix) nursing home and long-term care coverage;

Subsection (5);

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(d) the method of identification of policies and contracts based upon coverages provided; and

(e) rating practices.

(4) Nothing in Subsection (3)(b) precludes the issuance of policies that combine categories of

coverage in Subsection (3)(b) provided that any combination of categories meets the standards

of a component category of coverage.

(5) The commissioner may adopt rules, made in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act, relating to the following matters:

(a) establishing disclosure requirements for insurance policies covered in this section, designed

to adequately inform the prospective insured of the need for and extent of the coverage

offered, and requiring that this disclosure be furnished to the prospective insured with the

application form, unless it is a direct response insurance policy;

(b)

(i) prescribing caption or notice requirements designed to inform prospective insureds that

particular insurance coverages are not Medicare supplement insurance; and

(ii) applying the requirements of Subsection (5)(b)(i) to all insurance policies and certificates

sold to persons eligible for Medicare; and

on direct response insurance policies, upon his request or, in any event, no later than the time

of the policy delivery.

(6) A policy covered by this section may be issued only if it meets the minimum standards

established by the commissioner under Subsection (3), an outline of coverage accompanies

the policy or is delivered to the applicant at the time of the application, and, except with respect

to direct response insurance policies, an acknowledged receipt is provided to the insurer. The

outline of coverage shall include:

(a) a statement identifying the applicable categories of coverage provided by the policy as

prescribed under Subsection (3);

(b) a description of the principal benefits and coverage;

(d) a statement of the renewal provisions, including any reservation by the insurer of a right to

change premiums;

(e) a statement that the outline is a summary of the policy issued or applied for and that the

policy should be consulted to determine governing contractual provisions; and

(f) any other contents the commissioner prescribes.

(7) If a policy is issued on a basis other than that applied for, the outline of coverage shall

accompany the policy when it is delivered and it shall clearly state that it is not the policy for

which application was made.

(8)

(a) Notwithstanding Subsection 31A-22-606(1), limited accident and health policies or certificates

issued to persons eligible for Medicare shall contain a notice prominently printed on or

attached to the cover or front page which states that the policyholder or certificate holder has

the right to return the policy for any reason within 30 days after its delivery and to have the

premium refunded.

(b) This Subsection (8) does not apply to a policy issued to an employer group.

Amended by Chapter 120, 2024 General Session

31A-22-605.1 Preexisting condition limitations.

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(1) Any provision dealing with preexisting conditions shall be consistent with this section, Section

31A-22-609, and rules adopted by the commissioner.

(2) Except as provided in this section, an insurer that elects to use an application form without

questions concerning the insured's health or medical treatment history shall provide coverage

under the policy for any loss which occurs more than 12 months after the effective date of

coverage due to a preexisting condition which is not specifically excluded from coverage.

(3)

(a) An insurer that issues a specified disease policy may not deny a claim for loss due to a

preexisting condition that occurs more than six months after the effective date of coverage.

(b) A specified disease policy may impose a preexisting condition exclusion only if the exclusion

relates to a preexisting condition which first manifested itself within six months prior to the

effective date of coverage or which was diagnosed by a physician at any time prior to the

effective date of coverage.

(4)

(a) Except as otherwise provided in this section, a health benefit plan may impose a preexisting

condition exclusion only if:

(i) the exclusion relates to a preexisting condition for which medical advice, diagnosis, care,

or treatment was recommended or received within the six-month period ending on the

enrollment date from an individual licensed or similarly authorized to provide those services

under state law and operating within the scope of practice authorized by state law;

(ii) the exclusion period ends no later than 12 months after the enrollment date, or in the case of

a late enrollee, 18 months after the enrollment date; and

(iii) the exclusion period is reduced by the number of days of creditable coverage the enrollee

has as of the enrollment date, in accordance with Subsection (4)(b).

(b)

(i) The amount of creditable coverage allowed under Subsection (4)(a)(iii) is determined by

counting all the days on which the individual has one or more types of creditable coverage.

(ii) Days of creditable coverage that occur before a significant break in coverage are not

required to be counted.

(A) Days in a waiting period or affiliation period are not taken into account in determining

whether a significant break in coverage has occurred.

(B) For an individual who elects federal COBRA continuation coverage during the second

election period provided under the federal Trade Act of 2002, the days between the date

the individual lost group health plan coverage and the first day of the second COBRA

election period are not taken into account in determining whether a significant break in

coverage has occurred.

pregnancy.

(d)

(i) An insurer imposing a preexisting condition exclusion shall provide a written general notice of

preexisting condition exclusion as part of any written application materials.

(ii) The general notice under this subsection shall include:

(A) a description of the existence and terms of any preexisting condition exclusion under

the plan, including the six-month period ending on the enrollment date, the maximum

preexisting condition exclusion period, and how the insurer will reduce the maximum

preexisting condition exclusion period by creditable coverage;

(B) a description of the rights of individuals:

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(I) to demonstrate creditable coverage, including any applicable waiting periods, through a

certificate of creditable coverage or through other means; and

(II) to request a certificate of creditable coverage from a prior plan;

from any prior plan or issuer if necessary; and

(D) a person to contact, and an address and telephone number for the person, for obtaining

additional information or assistance regarding the preexisting condition exclusion.

(e) An insurer may not impose any limit on the amount of time that an individual has to present a

certificate or other evidence of creditable coverage.

(f) This Subsection (4) does not preclude application of any waiting period applicable to all new

enrollees under the plan.

(5)

(a) If a short-term limited duration health insurance policy provides for an extension or renewal of

the policy, the insurer may not exclude coverage for a loss due to a preexisting condition for a

period greater than 12 months following the original effective date of the coverage, unless the

insurer specifically and expressly excludes the preexisting condition in the terms of the policy

or certificate.

(b)

(i) An insurer that includes a preexisting condition exclusion in a short-term limited duration

health insurance policy in accordance with this subsection shall provide a written general

notice of the preexisting condition exclusion as part of any written application materials.

(ii) A written general notice described in this subsection shall:

(A) include a description of the existence and terms of any preexisting condition exclusion

under the policy, including the maximum preexisting exclusion period; and

(B) state that the exclusion period ends no later than 12 months after the original effective

date of the coverage.

Amended by Chapter 193, 2019 General Session

31A-22-605.5 Application.

(1) For purposes of this section "insurance mandate":

(a) means a mandatory obligation with respect to coverage, benefits, or the number or types of

providers imposed on policies of accident and health insurance; and

(b) does not mean:

(i) an administrative rule imposing a mandatory obligation with respect to coverage, benefits, or

providers unless that mandatory obligation was specifically imposed on policies of accident

and health insurance by statute; or

(ii) an insurance mandate in an essential health benefits package imposed pursuant to the

Patient Protection and Affordable Care Act, Pub. L. No. 111-148, and the Health Care

Education Reconciliation Act of 2010, Pub. L. No. 111-152, and federal rules related to their

implementation.

(2)

(a) Notwithstanding the provisions of Subsection 31A-1-103(3)(f), the following shall apply to

health coverage offered to the state employees' risk pool under Subsection 49-20-202(1)(a):

(i) any law enacted under this title that becomes effective after January 1, 2002, which provides

for an insurance mandate for policies of accident and health insurance; and

(ii) in accordance with Section 31A-22-613.5, disclosure requirements for coverage limitations.

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(b) Notwithstanding the provisions of Subsection 31A-1-103(3)(f), a health insurance mandate

enacted under this title after January 1, 2012, shall apply to:

(i) health coverage offered to the state employees' risk pool under Subsection 49-20-202(1)(a);

and

(ii) health coverage offered to public school districts, charter schools, and institutions of higher

education under Subsection 49-20-201(1)(b).

(b) and 49-20-202(1)(a) offers coverage in the same manner and to the same extent as

the coverage required by an insurance mandate enacted under this title or coverage that is

greater than the insurance mandate enacted under this title, the coverage offered to state

employees under Subsections 49-20-201(1)(b) and 49-20-202(1)(a) will be considered in

compliance with the insurance mandate.

(d) The programs regulated under Subsections 49-20-201(1)(b) and 49-20-202(1)(a) shall report

to the Retirement and Independent Entities Committee created under Section 63E-1-201 by

November 30 of each year in which a mandate is enacted under the provisions of this section.

The report shall include the costs and benefits of the particular mandatory obligation.

(3)

(a) An insurance mandate for policies of accident and health insurance enacted under this title

after January 1, 2012, shall apply to a health plan offered by a public school district, a charter

school, or a state funded institution of higher education that is not insured through the Public

Employees' Benefit and Insurance Program.

(b) If an insurance mandate for policies of accident and health insurance is enacted under

this title after January 1, 2012, the state shall determine whether each entity described in

Subsections (2) and (3)(a) offers coverage in the same manner and to the same extent, or

greater than the insurance coverage required in the mandate enacted after January 1, 2012.

coverage in accordance with Subsection (3)(b):

(i) determine the cost to the entity of implementing the insurance mandate; and

(ii) appropriate money necessary to fund the full cost to the entity of implementing the insurance

mandate.

Amended by Chapter 127, 2012 General Session

31A-22-606 Policy examination period.

(1)

(a) Except as provided in Subsection (2), all accident and health policies shall contain a notice

prominently printed on or attached to the cover or front page stating that the policyholder has

the right to return the policy for any reason within 10 days after its delivery.

(b) "Return" means delivery to the insurer or its agent or mailing of the policy to either, properly

addressed and stamped for first class handling, with a written statement on the policy or an

accompanying communication that it is being returned for termination of coverage. A policy

returned under this Subsection (1) is void from the beginning and a policyholder returning his

policy is entitled to a refund of any premium paid.

(2) This section does not apply to:

(a) group policies;

(b) policies issued to persons entitled to a 30-day examination period under Subsection

31A-22-605(9);

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(d) policies covering accidents only or accidental bodily injury only; and

(e) other classes of policies which the commissioner by rule specifies after a finding that a right

to return those policies would be impracticable or unnecessary to protect the policyholder's

interests.

Amended by Chapter 78, 2005 General Session

31A-22-607 Grace period.

(1)

(a) An individual or franchise accident and health insurance policy shall contain one or more

clauses providing for a grace period for premium payment only of:

(i) at least 15 days for a weekly or monthly premium policy; and

(ii) 30 days for a policy that is not a weekly or monthly premium policy, for each premium after

the first premium payment.

(b) An insurer may elect to include a grace period that is longer than 15 days for a weekly or

monthly policy.

period.

(d) If an insurer receives payment before the day on which a grace period expires, the individual

or franchise accident and health insurance policy continues in force with no gap in coverage.

(e) If an insurer does not receive payment before the day on which a grace period expires, the

individual or franchise accident and health insurance policy terminates as of the last date for

which the premium is paid in full.

(f) A grace period is not required if the policyholder has requested that the individual or franchise

accident and health insurance policy be discontinued.

(2)

(a) A group insurance policy offering accident and health insurance or a blanket insurance policy

offering accident and health insurance shall provide for a grace period of at least 30 days,

unless the policyholder gives written notice of discontinuance before the day on which the

policy discontinues, in accordance with the policy terms.

(b) A group insurance policy offering accident and health insurance or a blanket insurance policy

offering accident and health insurance is in force during a grace period.

group insurance policy offering accident and health insurance or blanket insurance policy

offering accident and health insurance terminates as of the last day on which the grace period

is in effect.

(d) A group insurance policy offering accident and health insurance or a blanket insurance policy

offering accident and health insurance may provide for payment of a pro rata premium for the

period the policy is in effect during a grace period under this Subsection (2).

(3) If an insurer has not guaranteed the insured a right to renew an accident and health insurance

policy, a grace period beyond the expiration or anniversary date may, if provided in the

accident and health insurance policy, be cut off by compliance with the notice provision under

Subsection (4).

(4)

(a) An insurer shall send a written renewal notice to the policyholder or, if the insurer issued the

policy to an employer group, the producer:

(i) no sooner than 90 days before, and no later than 14 days before, the day on which an

accident and health insurance policy renews; or

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(ii) if the renewal notice includes a change in premium, at least 45 days before the day on which

an accident and health insurance policy renews.

(b) The renewal notice described in Subsection (4)(a) shall clearly state:

(i) the renewal amount;

(ii) how the policyholder may pay the renewal premium, including the day on which the renewal

premium is due; and

(iii) that failure of the policyholder to pay the renewal premium extinguishes the policyholder's

right to renew.

(5) The extinguishment of a policyholder's right to renew for nonpayment of premium is effective

no sooner than 10 days after the day on which the policyholder receives written notice that the

policyholder has failed to pay the premium when due.

Amended by Chapter 252, 2021 General Session

31A-22-608 Reinstatement of individual or franchise accident and health insurance policies.

(1) Every individual or franchise accident and health insurance policy shall contain a provision

which reads substantially as follows:

"REINSTATEMENT: If any renewal premium is not paid within the time granted the

insured for payment, a subsequent acceptance of premium by the insurer or by any agent

duly authorized by the insurer to accept the premium, without also requiring an application

for reinstatement, shall reinstate the policy. However, if the insurer or agent requires an

application for reinstatement and issues a conditional receipt for the premium tendered, the

policy shall be reinstated upon approval of this application from the insurer or, lacking this

approval, upon the 45th day following the date of the conditional receipt, unless the insurer has

previously notified the insured in writing of its disapproval of the application. The reinstated

policy shall cover only loss resulting from such accidental injury as may be sustained after

the date of reinstatement and loss due to such sickness as may begin more than 10 days

after that date. In all other respects the insured and insurer have the same rights under the

reinstated policy as they had under the policy immediately before the due date of the defaulted

premium, subject to any provisions endorsed on or attached to this policy in connection with the

reinstatement. Any premium accepted in connection with a reinstatement shall be applied to

a period for which premium has not been previously paid, but not to any period more than 60

days prior to the date of reinstatement."

(2) The last sentence of the provision described in Subsection (1) may be omitted from any policy

that the insured has the right to continue in force subject to the policy's terms by the timely

payment of premiums until at least age 50, or in the case of a policy issued after age 44, for at

least five years from the day on which the insurer issues the policy.

Amended by Chapter 252, 2021 General Session

31A-22-609 Incontestability for accident and health insurance.

(1)

(a) A statement made by an applicant relating to the person's insurability, except fraudulent

misrepresentation, may not be a basis for avoidance of a policy, coverage, or denial of a

claim for loss incurred or disability commencing after the coverage has been in effect for two

years.

(b) The insurer has the burden of proving fraud by clear and convincing evidence.

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(2) Except as provided under Section 31A-22-605.1, a claim for loss incurred or disability

commencing after two years from the date of issue of the policy may not be reduced or

denied on the ground that a disease or physical condition existed prior to the effective date of

coverage, unless the condition was excluded from coverage by name or specific description in

a provision that was in effect on the date of loss.

(3) Except as provided in Subsection (1)(a), a specified disease policy may not include wording

that provides a defense based upon a disease or physical condition that existed prior to the

effective date of coverage except as allowed under Subsection 31A-22-605.1(2).

Amended by Chapter 78, 2005 General Session

31A-22-610 Dependent coverage from moment of birth or adoption.

(1) As used in this section:

(a) "Child" means, in connection with any adoption, or placement for adoption of the child, an

individual who is younger than 18 years old as of the date of the adoption or placement for

adoption.

(b) "Placement for adoption" means the assumption and retention by a person of a legal

obligation for total or partial support of a child in anticipation of the adoption of the child.

(2)

(a) Except as provided in Subsection (5), if an accident and health insurance policy provides

coverage for any members of the policyholder's or certificate holder's family, the policy

shall provide that any health insurance benefits applicable to dependents of the insured are

applicable on the same basis to:

(i) a newly born child from the moment of birth; and

(ii) an adopted child:

(A) beginning from the moment of birth, if placement for adoption occurs within 30 days of the

child's birth; or

(B) beginning from the date of placement, if placement for adoption occurs 30 days or more

after the child's birth.

(b) The coverage described in this Subsection (2):

(i) is not subject to any preexisting conditions; and

(ii) includes any injury or sickness, including the necessary care and treatment of medically

diagnosed:

(A) congenital defects;

(B) birth abnormalities; or

(c)

(i) Subject to Subsection (2)(c)(ii), a claim for services for a newly born child or an adopted child

may be denied until the child is enrolled.

(ii) Notwithstanding Subsection (2)(c)(i), an otherwise eligible claim denied under Subsection

(2)(c)(i) is eligible for payment and may be resubmitted or reprocessed once a child is

enrolled pursuant to Subsection (2)(d) or (e).

(d) If the payment of a specific premium is required to provide coverage for a child of a

policyholder or certificate holder, for there to be coverage for the child, the policyholder or

certificate holder shall enroll:

(i) a newly born child within 30 days after the date of birth of the child; or

(ii) an adopted child within 30 days after the day of placement of adoption.

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(e) If the payment of a specific premium is not required to provide coverage for a child of

a policyholder or certificate holder, for the child to receive coverage the policyholder or

certificate holder shall enroll a newly born child or an adopted child no later than 30 days after

the first notification of denial of a claim for services for that child.

(3)

(a) The coverage required by Subsection (2) as to children placed for the purpose of adoption

with a policyholder or certificate holder continues in the same manner as it would with respect

to a child of the policyholder or certificate holder unless:

(i) the placement is disrupted prior to legal adoption; and

(ii) the child is removed from placement.

(b) The coverage required by Subsection (2) ends if the child is removed from placement prior to

being legally adopted.

(4) The provisions of this section apply to employee welfare benefit plans as defined in Section

26B-3-1001.

(5) If an accident and health insurance policy that is not subject to the special enrollment rights

described in 45 C.F.R. Sec. 146.117(b) provides coverage for one individual, the insurer may

choose to:

(a) provide coverage according to this section; or

(b) allow application, subject to the insurer's underwriting criteria for:

(i) a newborn;

(ii) an adopted child; or

(iii) a child placed for adoption.

Amended by Chapter 327, 2023 General Session

31A-22-610.1 Indemnity benefit for adoption or infertility treatments.

(1)

(a)

(i) If an insured has coverage for maternity benefits on the date of an adoptive placement,

the insured's policy shall provide an adoption indemnity benefit payable to the insured, if

a child is placed for adoption with the insured within 90 days of the child's birth. If more

than one child from the same birth is placed for adoption with the insured, only one adoption

indemnity benefit is required.

(ii) This section does not prevent an accident and health insurer from:

(A) adjusting the benefit payable under this section for cost sharing measures imposed under

the policy or contract for maternity benefit coverage; or

(B) providing additional adoption indemnity benefits including:

(I) extending the period of time after birth in which a child must be placed with an insured; or

(II) providing a benefit in excess of the amount specified in Subsection (1)(c).

(b) An insurer that has paid the adoption indemnity benefit under Subsection (1)(a) may seek

reimbursement of the benefit if:

(i) the postplacement evaluation disapproves the adoption placement; and

(ii) a court rules the adoption may not be finalized because of an act or omission of an adoptive

parent or parents that affects the child's health or safety.

(c)

(i) The amount of the adoption indemnity benefit provided under Subsection (1) is $4,000

subject to the adjustments permitted by Subsection (1)(a)(ii).

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(ii) An insurer may comply with the provisions of this section by providing the $4,000 adoption

indemnity benefit to an enrollee to be used for the purpose of the enrollee obtaining infertility

treatments rather than seeking reimbursement for an adoption in accordance with terms

designated by the insurer.

(d) Each insurer shall pay its pro rata share of the adoption indemnity benefit if each adoptive

parent:

(i) has coverage for maternity benefits with a different insurer; and

(ii) makes a claim for the adoption indemnity benefit provided in Subsection (1)(a).

(2) If a policy offers optional maternity benefits, it shall also offer coverage for adoption indemnity

benefits if:

(a) a child is placed for adoption with the insured within 90 days of the child's birth; and

(b) the adoption is finalized within one year of the child's birth.

(3) If an insured qualifies for the adoption indemnity benefit under this section and receives

services from a network provider, the network provider may only collect from the insured the

amount that the contracting health care provider is entitled to receive for such services under

the contract, including any applicable copayment.

Amended by Chapter 292, 2017 General Session

31A-22-610.2 Maternity stay minimum limits.

(1)

(a) If an insured has coverage for maternity benefits, the policy may not be limited to a less than

a 48-hour benefit for both mother and newborn with a normal vaginal delivery.

(b) If an insured has coverage for maternity benefits, the policy may not be limited to a less than

96-hour benefit for both mother and newborn with a caesarean section delivery.

(2) Subsection (1) applies to an accident and health insurer who offers maternity coverage.

Amended by Chapter 116, 2001 General Session

Superseded 9/1/2024

31A-22-610.5 Dependent coverage.

(1) As used in this section, "child" has the same meaning as defined in Section 78B-12-102.

(2)

(a) Any individual or group accident and health insurance policy or managed care organization

contract that provides coverage for a policyholder's or certificate holder's dependent:

(i) may not terminate coverage of an unmarried dependent by reason of the dependent's age

before the dependent's 26th birthday; and

(ii) shall, upon application, provide coverage for all unmarried dependents up to age 26.

(b) The cost of coverage for unmarried dependents 19 to 26 years old shall be included in the

premium on the same basis as other dependent coverage.

the cost of coverage for unmarried dependents.

(d) An individual or group health insurance policy or managed care organization shall continue

in force coverage for a dependent through the last day of the month in which the dependent

ceases to be a dependent:

(i) if premiums are paid; and

(ii) notwithstanding Sections 31A-22-618.6 and 31A-22-618.7.

(3)

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(a) When a parent is required by a court or administrative order to provide health insurance

coverage for a child, an accident and health insurer may not deny enrollment of a child under

the accident and health insurance plan of the child's parent on the grounds the child:

(i) was born out of wedlock and is entitled to coverage under Subsection (4);

(ii) was born out of wedlock and the custodial parent seeks enrollment for the child under the

custodial parent's policy;

(iii) is not claimed as a dependent on the parent's federal tax return;

(iv) does not reside with the parent; or

(v) does not reside in the insurer's service area.

(b) A child enrolled as required under Subsection (3)(a)(iv) is subject to the terms of the accident

and health insurance plan contract pertaining to services received outside of an insurer's

service area.

(4) When a child has accident and health coverage through an insurer of a noncustodial parent,

and when requested by the noncustodial or custodial parent, the insurer shall:

(a) provide information to the custodial parent as necessary for the child to obtain benefits

through that coverage, but the insurer or employer, or the agents or employees of either

of them, are not civilly or criminally liable for providing information in compliance with this

Subsection (4)(a), whether the information is provided pursuant to a verbal or written request;

(b) permit the custodial parent or the service provider, with the custodial parent's approval, to

submit claims for covered services without the approval of the noncustodial parent; and

custodial parent, the child who obtained benefits, the provider, or the state Medicaid agency.

(5) When a parent is required by a court or administrative order to provide health coverage for a

child, and the parent is eligible for family health coverage, the insurer shall:

(a) permit the parent to enroll, under the family coverage, a child who is otherwise eligible for the

coverage without regard to an enrollment season restrictions;

(b) if the parent is enrolled but fails to make application to obtain coverage for the child, enroll

the child under family coverage upon application of the child's other parent, the state agency

administering the Medicaid program, or the state agency administering 42 U.S.C. Sec. 651

through 669, the child support enforcement program; and

(c)

(i) when the child is covered by an individual policy, not disenroll or eliminate coverage of the

child unless the insurer is provided satisfactory written evidence that:

(A) the court or administrative order is no longer in effect; or

(B) the child is or will be enrolled in comparable accident and health coverage through

another insurer which will take effect not later than the effective date of disenrollment; or

(ii) when the child is covered by a group policy, not disenroll or eliminate coverage of the child

unless the employer is provided with satisfactory written evidence, which evidence is also

provided to the insurer, that Subsection (8)(c)(i), (ii), or (iii) has happened.

(6) An insurer may not impose requirements on a state agency that has been assigned the rights

of an individual eligible for medical assistance under Medicaid and covered for accident and

health benefits from the insurer that are different from requirements applicable to an agent or

assignee of any other individual so covered.

(7) Insurers may not reduce their coverage of pediatric vaccines below the benefit level in effect on

May 1, 1993.

(8) When a parent is required by a court or administrative order to provide health coverage, which

is available through an employer doing business in this state, the employer shall:

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(a) permit the parent to enroll under family coverage any child who is otherwise eligible for

coverage without regard to any enrollment season restrictions;

(b) if the parent is enrolled but fails to make application to obtain coverage of the child, enroll the

child under family coverage upon application by the child's other parent, by the state agency

administering the Medicaid program, or the state agency administering 42 U.S.C. Sec. 651

through 669, the child support enforcement program;

written evidence that:

(i) the court order is no longer in effect;

(ii) the child is or will be enrolled in comparable coverage which will take effect no later than the

effective date of disenrollment; or

(iii) the employer has eliminated family health coverage for all of its employees; and

(d) withhold from the employee's compensation the employee's share, if any, of premiums for

health coverage and to pay this amount to the insurer.

(9) An order issued under Section 26B-9-225 may be considered a "qualified medical support

order" for the purpose of enrolling a dependent child in a group accident and health insurance

plan as defined in Section 609(a), Federal Employee Retirement Income Security Act of 1974.

(10) This section does not affect any insurer's ability to require as a precondition of any child being

covered under any policy of insurance that:

(a) the parent continues to be eligible for coverage;

(b) the child shall be identified to the insurer with adequate information to comply with this

section; and

(11) This section applies to employee welfare benefit plans as defined in Section 26B-3-1001.

(12)

(a) A policy that provides coverage to a child of a group member may not deny eligibility for

coverage to a child solely because:

(i) the child does not reside with the insured; or

(ii) the child is solely dependent on a former spouse of the insured rather than on the insured.

(b) A child who does not reside with the insured may be excluded on the same basis as a child

who resides with the insured.

Amended by Chapter 327, 2023 General Session

Effective 9/1/2024

31A-22-610.5 Dependent coverage.

(1) As used in this section, "child" means the same as that term is defined in Section 81-6-101.

(2)

(a) Any individual or group accident and health insurance policy or managed care organization

contract that provides coverage for a policyholder's or certificate holder's dependent:

(i) may not terminate coverage of an unmarried dependent by reason of the dependent's age

before the dependent's 26th birthday; and

(ii) shall, upon application, provide coverage for all unmarried dependents up to age 26.

(b) The cost of coverage for unmarried dependents 19 to 26 years old shall be included in the

premium on the same basis as other dependent coverage.

the cost of coverage for unmarried dependents.

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