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First Substitute H.B. 245
Senator Thomas V. Hatch proposes the following substitute bill:
1
INSURANCE LAW REVISIONS
2
2004 GENERAL SESSION
3
STATE OF UTAH
4
Sponsor: James A. Ferrin
5
6
LONG TITLE
7
General Description:
8
This bill modifies the Insurance Code.
9
Highlighted Provisions:
10
This bill:
11
. modifies definition provisions;
12
. addresses examination costs;
13
. addresses confidentiality and distribution of certain records or documents;
14
. corrects cross references;
15
. addresses extension of the deadline for filing fee payments for annual statements;
16
. addresses use of technical experts in evaluating mergers and acquisitions;
17
. prohibits certain activities related to Social Security numbers;
18
. addresses the deposit of funds by a licensee;
19
. modifies trust obligations for funds collected;
20
. addresses grounds for probation;
21
. modifies trust obligations for funds collected;
22
. modifies the Comprehensive Health Insurance Pool Act including:
23
. defining terms;
24
. expanding the board;
25
. addressing eligibility;
26
. addressing preexisting conditions;
27
. addressing deductibles and copayments; and
28
. repealing employee contribution provisions;
29
. enacts the Federal Health Care Tax Credit Program Act; and
30
. makes technical changes.
31
Monies Appropriated in this Bill:
32
None
33
Other Special Clauses:
34
This bill provides an effective date.
35
This bill provides revisor instructions.
36
Utah Code Sections Affected:
37
AMENDS:
38
31A-1-301, as last amended by Chapters 131 and 298, Laws of Utah 2003
39
31A-2-205, as last amended by Chapter 298, Laws of Utah 2003
40
31A-2-207, as last amended by Chapter 259, Laws of Utah 1991
41
31A-2-309, as last amended by Chapter 298, Laws of Utah 2003
42
31A-4-113, as last amended by Chapter 116, Laws of Utah 2001
43
31A-8-103, as last amended by Chapter 298, Laws of Utah 2003
44
31A-16-103, as last amended by Chapter 1, Laws of Utah 2000
45
31A-23a-112, as renumbered and amended by Chapter 298, Laws of Utah 2003
46
31A-23a-409, as renumbered and amended by Chapter 298, Laws of Utah 2003
47
31A-29-103, as last amended by Chapter 168, Laws of Utah 2003
48
31A-29-104, as last amended by Chapter 168, Laws of Utah 2003
49
31A-29-111, as last amended by Chapter 168, Laws of Utah 2003
50
31A-29-112, as last amended by Chapter 168, Laws of Utah 2003
51
31A-29-113, as last amended by Chapter 168, Laws of Utah 2003
52
31A-29-114, as last amended by Chapter 168, Laws of Utah 2003
53
31A-29-115, as last amended by Chapter 168, Laws of Utah 2003
54
31A-30-103, as last amended by Chapters 114 and 308, Laws of Utah 2002
55
31A-30-108, as last amended by Chapter 308, Laws of Utah 2002
56
63-55b-131, as last amended by Chapter 298, Laws of Utah 2003
57
ENACTS:
58
31A-21-110, Utah Code Annotated 1953
59
31A-38-101, Utah Code Annotated 1953
60
31A-38-102, Utah Code Annotated 1953
61
31A-38-103, Utah Code Annotated 1953
62
31A-38-104, Utah Code Annotated 1953
63
REPEALS:
64
31A-29-118, as enacted by Chapter 232, Laws of Utah 1990
65
66
Be it enacted by the Legislature of the state of Utah:
67
Section 1.
Section
31A-1-301
is amended to read:
68
31A-1-301. Definitions.
69
As used in this title, unless otherwise specified:
70
(1) (a) "Accident and health insurance" means insurance to provide protection against
71
economic losses resulting from:
72
(i) a medical condition including:
73
(A) medical care expenses; or
74
(B) the risk of disability;
75
(ii) accident; or
76
(iii) sickness.
77
(b) "Accident and health insurance":
78
(i) includes a contract with disability contingencies including:
79
(A) an income replacement contract;
80
(B) a health care contract;
81
(C) an expense reimbursement contract;
82
(D) a credit accident and health contract;
83
(E) a continuing care contract; and
84
(F) a long-term care [contracts] contract; and
85
(ii) may provide:
86
(A) hospital coverage;
87
(B) surgical coverage;
88
(C) medical coverage; or
89
(D) loss of income coverage.
90
(c) "Accident and health insurance" does not include workers' compensation insurance.
91
(2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
92
63, Chapter 46a, Utah Administrative Rulemaking Act.
93
(3) "Administrator" is defined in Subsection [(149)] (150).
94
(4) "Adult" means a natural person who has attained the age of at least 18 years.
95
(5) "Affiliate" means any person who controls, is controlled by, or is under common
96
control with, another person. A corporation is an affiliate of another corporation, regardless of
97
ownership, if substantially the same group of natural persons manages the corporations.
98
(6) "Agency" means:
99
(a) a person other than an individual, including a sole proprietorship by which a natural
100
person does business under an assumed name; and
101
(b) an insurance organization licensed or required to be licensed under Section
102
31A-23a-301
.
103
(7) "Alien insurer" means an insurer domiciled outside the United States.
104
(8) "Amendment" means an endorsement to an insurance policy or certificate.
105
(9) "Annuity" means an agreement to make periodical payments for a period certain or
106
over the lifetime of one or more natural persons if the making or continuance of all or some of
107
the series of the payments, or the amount of the payment, is dependent upon the continuance of
108
human life.
109
(10) "Application" means a document:
110
(a) (i) completed by an applicant to provide information about the risk to be insured;
111
and
112
[(b)] (ii) that contains information that is used by the insurer to[: (i)] evaluate risk[;]
113
and [(ii)] decide whether to:
114
(A) insure the risk under:
115
(I) the coverages as originally offered; or
116
(II) a modification of the coverage as originally offered; or
117
(B) decline to insure the risk[.]; or
118
(b) used by the insurer to gather information from the applicant before issuance of an
119
annuity contract.
120
(11) "Articles" or "articles of incorporation" means the original articles, special laws,
121
charters, amendments, restated articles, articles of merger or consolidation, trust instruments,
122
and other constitutive documents for trusts and other entities that are not corporations, and
123
amendments to any of these.
124
(12) "Bail bond insurance" means a guarantee that a person will attend court when
125
required, or will obey the orders or judgment of the court, as a condition to the release of that
126
person from confinement.
127
(13) "Binder" is defined in Section
31A-21-102
.
128
(14) "Board," "board of trustees," or "board of directors" means the group of persons
129
with responsibility over, or management of, a corporation, however designated.
130
(15) "Business entity" means a corporation, association, partnership, limited liability
131
company, limited liability partnership, or other legal entity.
132
(16) "Business of insurance" is defined in Subsection [(80)] (81).
133
(17) "Business plan" means the information required to be supplied to the
134
commissioner under Subsections
31A-5-204
(2)(i) and (j), including the information required
135
when these subsections are applicable by reference under:
136
(a) Section
31A-7-201
;
137
(b) Section
31A-8-205
; or
138
(c) Subsection
31A-9-205
(2).
139
(18) "Bylaws" means the rules adopted for the regulation or management of a
140
corporation's affairs, however designated and includes comparable rules for trusts and other
141
entities that are not corporations.
142
(19) "Captive insurance company" means:
143
(a) an insurance company:
144
(i) owned by another organization; and
145
(ii) whose exclusive purpose is to insure risks of the parent organization and affiliated
146
companies; or
147
(b) in the case of groups and associations, an insurance organization:
148
(i) owned by the insureds; and
149
(ii) whose exclusive purpose is to insure risks of:
150
(A) member organizations;
151
(B) group members; and
152
(C) affiliates of:
153
(I) member organizations; or
154
(II) group members.
155
(20) "Casualty insurance" means liability insurance as defined in Subsection [(90)]
156
(91).
157
(21) "Certificate" means evidence of insurance given to:
158
(a) an insured under a group insurance policy; or
159
(b) a third party.
160
(22) "Certificate of authority" is included within the term "license."
161
(23) "Claim," unless the context otherwise requires, means a request or demand on an
162
insurer for payment of benefits according to the terms of an insurance policy.
163
(24) "Claims-made coverage" means an insurance contract or provision limiting
164
coverage under a policy insuring against legal liability to claims that are first made against the
165
insured while the policy is in force.
166
(25) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
167
commissioner.
168
(b) When appropriate, the terms listed in Subsection (25)(a) apply to the equivalent
169
supervisory official of another jurisdiction.
170
(26) (a) "Continuing care insurance" means insurance that:
171
(i) provides board and lodging;
172
(ii) provides one or more of the following services:
173
(A) personal services;
174
(B) nursing services;
175
(C) medical services; or
176
(D) other health-related services; and
177
(iii) provides the coverage described in Subsection (26)(a)(i) under an agreement
178
effective:
179
(A) for the life of the insured; or
180
(B) for a period in excess of one year.
181
(b) Insurance is continuing care insurance regardless of whether or not the board and
182
lodging are provided at the same location as the services described in Subsection (26)(a)(ii).
183
(27) (a) "Control," "controlling," "controlled," or "under common control" means the
184
direct or indirect possession of the power to direct or cause the direction of the management
185
and policies of a person. This control may be:
186
(i) by contract;
187
(ii) by common management;
188
(iii) through the ownership of voting securities; or
189
(iv) by a means other than those described in Subsections (27)(a)(i) through (iii).
190
(b) There is no presumption that an individual holding an official position with another
191
person controls that person solely by reason of the position.
192
(c) A person having a contract or arrangement giving control is considered to have
193
control despite the illegality or invalidity of the contract or arrangement.
194
(d) There is a rebuttable presumption of control in a person who directly or indirectly
195
owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
196
voting securities of another person.
197
(28) "Controlled insurer" means a licensed insurer that is either directly or indirectly
198
controlled by a producer.
199
(29) "Controlling person" means any person[, firm, association, or corporation] that
200
directly or indirectly has the power to direct or cause to be directed, the management, control,
201
or activities of a reinsurance intermediary.
202
(30) "Controlling producer" means a producer who directly or indirectly controls an
203
insurer.
204
(31) (a) "Corporation" means an insurance corporation, except when referring to:
205
(i) a corporation doing business:
206
(A) as:
207
(I) an insurance producer[,];
208
(II) a limited line producer[,];
209
(III) a consultant[,];
210
(IV) a managing general agent[,];
211
(V) a reinsurance intermediary[,];
212
(VI) a third party administrator[,]; or
213
(VII) an adjuster; and
214
(B) under:
215
[(A)] (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
216
Reinsurance Intermediaries;
217
[(B)] (II) Chapter 25, Third Party Administrators; [and] or
218
[(C)] (III) Chapter 26, Insurance Adjusters; or
219
(ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
220
Holding Companies.
221
(b) "Stock corporation" means a stock insurance corporation.
222
(c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
223
(32) "Credit accident and health insurance" means insurance on a debtor to provide
224
indemnity for payments coming due on a specific loan or other credit transaction while the
225
debtor is disabled.
226
(33) (a) "Credit insurance" means insurance offered in connection with an extension of
227
credit that is limited to partially or wholly extinguishing that credit obligation.
228
(b) "Credit insurance" includes:
229
(i) credit accident and health insurance;
230
(ii) credit life insurance;
231
(iii) credit property insurance;
232
(iv) credit unemployment insurance;
233
(v) guaranteed automobile protection insurance;
234
(vi) involuntary unemployment insurance;
235
(vii) mortgage accident and health insurance;
236
(viii) mortgage guaranty insurance; and
237
(ix) mortgage life insurance.
238
(34) "Credit life insurance" means insurance on the life of a debtor in connection with
239
an extension of credit that pays a person if the debtor dies.
240
(35) "Credit property insurance" means insurance:
241
(a) offered in connection with an extension of credit; and
242
(b) that protects the property until the debt is paid.
243
(36) "Credit unemployment insurance" means insurance:
244
(a) offered in connection with an extension of credit; and
245
(b) that provides indemnity if the debtor is unemployed for payments coming due on a:
246
(i) specific loan; or
247
(ii) credit transaction.
248
(37) "Creditable coverage" is as defined in 45 C.F.R. 146.113(a).
249
(38) "Creditor" means a person, including an insured, having any claim, whether:
250
(a) matured;
251
(b) unmatured;
252
(c) liquidated;
253
(d) unliquidated;
254
(e) secured;
255
(f) unsecured;
256
(g) absolute;
257
(h) fixed; or
258
(i) contingent.
259
(39) (a) "Customer service representative" means a person that provides insurance
260
services and insurance product information:
261
(i) for the customer service representative's:
262
(A) producer; or
263
(B) consultant employer; and
264
(ii) to the customer service representative's employer's:
265
(A) customer[,];
266
(B) client[,]; or
267
(C) organization.
268
(b) A customer service representative may only operate within the scope of authority of
269
the customer service representative's producer or consultant employer.
270
(40) "Deadline" means the final date or time:
271
(a) imposed by:
272
(i) statute;
273
(ii) rule; or
274
(iii) order; and
275
(b) by which a required filing or payment must be received by the department.
276
(41) "Deemer clause" means a provision under this title under which upon the
277
occurrence of a condition precedent, the commissioner is deemed to have taken a specific
278
action. If the statute so provides, the condition precedent may be the commissioner's failure to
279
take a specific action.
280
(42) "Degree of relationship" means the number of steps between two persons
281
determined by counting the generations separating one person from a common ancestor and
282
then counting the generations to the other person.
283
(43) "Department" means the Insurance Department.
284
(44) "Director" means a member of the board of directors of a corporation.
285
(45) "Disability" means a physiological or psychological condition that partially or
286
totally limits an individual's ability to:
287
(a) perform the duties of:
288
(i) that individual's occupation; or
289
(ii) any occupation for which the individual is reasonably suited by education, training,
290
or experience; or
291
(b) perform two or more of the following basic activities of daily living:
292
(i) eating;
293
(ii) toileting;
294
(iii) transferring;
295
(iv) bathing; or
296
(v) dressing.
297
(46) "Disability income insurance" is defined in Subsection [(71)] (72).
298
(47) "Domestic insurer" means an insurer organized under the laws of this state.
299
(48) "Domiciliary state" means the state in which an insurer:
300
(a) is incorporated;
301
(b) is organized; or
302
(c) in the case of an alien insurer, enters into the United States.
303
(49) (a) "Eligible employee" means:
304
(i) an employee who:
305
(A) works on a full-time basis; and
306
(B) has a normal work week of 30 or more hours; or
307
(ii) a person described in Subsection (49)(b).
308
(b) "Eligible employee" includes, if the individual is included under a health benefit
309
plan of a small employer:
310
(i) a sole proprietor;
311
(ii) a partner in a partnership; or
312
(iii) an independent contractor.
313
(c) "Eligible employee" does not include, unless eligible under Subsection (49)(b):
314
(i) an individual who works on a temporary or substitute basis for a small employer;
315
(ii) an employer's spouse; or
316
(iii) a dependent of an employer.
317
(50) "Employee" means any individual employed by an employer.
318
(51) "Employee benefits" means one or more benefits or services provided to:
319
(a) employees; or
320
(b) dependents of employees.
321
(52) (a) "Employee welfare fund" means a fund:
322
(i) established or maintained, whether directly or through trustees, by:
323
(A) one or more employers;
324
(B) one or more labor organizations; or
325
(C) a combination of employers and labor organizations; and
326
(ii) that provides employee benefits paid or contracted to be paid, other than income
327
from investments of the fund, by or on behalf of an employer doing business in this state or for
328
the benefit of any person employed in this state.
329
(b) "Employee welfare fund" includes a plan funded or subsidized by user fees or tax
330
revenues.
331
(53) "Endorsement" means a written agreement attached to a policy or certificate to
332
modify one or more of the provisions of the policy or certificate.
333
(54) (a) "Escrow" means:
334
(i) a real estate settlement or real estate closing conducted by a third party pursuant to
335
the requirements of a written agreement between the parties in a real estate transaction; or
336
(ii) a settlement or closing involving:
337
(A) a mobile home;
338
(B) a grazing right;
339
(C) a water right; or
340
(D) other personal property authorized by the commissioner.
341
(b) "Escrow" includes the act of conducting a:
342
(i) real estate settlement; or
343
(ii) real estate closing.
344
(55) "Escrow agent" means:
345
(a) an insurance producer with:
346
(i) a title insurance line of authority; and
347
(ii) an escrow subline of authority; or
348
(b) a person defined as an escrow agent in Section
7-22-101
.
349
[(55)] (56) "Excludes" is not exhaustive and does not mean that other things are not
350
also excluded. The items listed are representative examples for use in interpretation of this
351
title.
352
[(56)] (57) "Expense reimbursement insurance" means insurance:
353
(a) written to provide payments for expenses relating to hospital confinements resulting
354
from illness or injury; and
355
(b) written:
356
(i) as a daily limit for a specific number of days in a hospital; and
357
(ii) to have a one or two day waiting period following a hospitalization.
358
[(57)] (58) "Fidelity insurance" means insurance guaranteeing the fidelity of persons
359
holding positions of public or private trust.
360
[(58)] (59) (a) "Filed" means that a filing is:
361
(i) submitted to the department as required by and in accordance with any applicable
362
statute, rule, or filing order;
363
(ii) received by the department within the time period provided in the applicable
364
statute, rule, or filing order; and
365
(iii) accompanied by the appropriate fee in accordance with:
366
(A) Section
31A-3-103
; or
367
(B) rule.
368
(b) "Filed" does not include a filing that is rejected by the department because it is not
369
submitted in accordance with Subsection [(58)] (59)(a).
370
[(59)] (60) "Filing," when used as a noun, means an item required to be filed with the
371
department including:
372
(a) a policy;
373
(b) a rate;
374
(c) a form;
375
(d) a document;
376
(e) a plan;
377
(f) a manual;
378
(g) an application;
379
(h) a report;
380
(i) a certificate;
381
(j) an endorsement;
382
(k) an actuarial certification;
383
(l) a licensee annual statement;
384
(m) a licensee renewal application; or
385
(n) an advertisement.
386
[(60)] (61) "First party insurance" means an insurance policy or contract in which the
387
insurer agrees to pay claims submitted to it by the insured for the insured's losses.
388
[(61)] (62) "Foreign insurer" means an insurer domiciled outside of this state, including
389
an alien insurer.
390
[(62)] (63) (a) "Form" means one of the following prepared for general use:
391
(i) a policy;
392
(ii) a certificate;
393
(iii) an application; or
394
(iv) an outline of coverage.
395
(b) "Form" does not include a document specially prepared for use in an individual
396
case.
397
[(63)] (64) "Franchise insurance" means individual insurance policies provided through
398
a mass marketing arrangement involving a defined class of persons related in some way other
399
than through the purchase of insurance.
400
[(64)] (65) "General lines of authority" include:
401
(a) the general lines of insurance in Subsection [(65)] (66);
402
(b) title insurance under one of the following sublines of authority:
403
(i) search, including authority to act as a title marketing representative;
404
(ii) escrow, including authority to act as a title marketing representative;
405
(iii) search and escrow, including authority to act as a title marketing representative;
406
and
407
(iv) title marketing representative only;
408
(c) surplus lines;
409
(d) workers' compensation; and
410
(e) any other line of insurance that the commissioner considers necessary to recognize
411
in the public interest.
412
[(65)] (66) "General lines of insurance" include:
413
(a) accident and health;
414
(b) casualty;
415
(c) life;
416
(d) personal lines;
417
(e) property; and
418
(f) variable contracts, including variable life and annuity.
419
[(66)] (67) "Group health plan" means an employee welfare benefit plan to the extent
420
that the plan provides medical care:
421
(a) (i) to employees; or
422
(ii) to a dependent of an employee; and
423
(b) (i) directly;
424
(ii) through insurance reimbursement; or
425
(iii) through any other method.
426
[(67)] (68) "Guaranteed automobile protection insurance" means insurance offered in
427
connection with an extension of credit that pays the difference in amount between the
428
insurance settlement and the balance of the loan if the insured automobile is a total loss.
429
[(68) "Health] (69) (a) Except as provided in Subsection (69)(b), "health benefit plan"
430
means a policy or certificate [for] that:
431
(i) provides health care insurance[, except that health benefit plan does not include
432
coverage:];
433
(ii) provides major medical expense insurance; or
434
(iii) is offered as a substitute for hospital or medical expense insurance such as:
435
(A) a hospital confinement indemnity; or
436
(B) a limited benefit plan.
437
(b) "Health benefit plan" does not include a policy or certificate that:
438
[(a)] (i) provides benefits solely for:
439
[(i)] (A) accident;
440
[(ii)] (B) dental;
441
(C) income replacement;
442
(D) long-term care;
443
(E) a Medicare supplement;
444
(F) a specified disease;
445
[(iii)] (G) vision; or
446
[(iv) Medicare supplement;]
447
[(v) long-term care; or]
448
[(vi) income replacement; or]
449
[(b) that is:]
450
(H) a short-term limited duration; or
451
[(i)] (ii) is offered and marketed as supplemental health insurance[;].
452
[(ii) not offered or marketed as a substitute for:]
453
[(A) hospital or medical expense insurance; or]
454
[(B) major medical expense insurance; and]
455
[(iii) solely for:]
456
[(A) a specified disease;]
457
[(B) hospital confinement indemnity; or]
458
[(C) limited benefit plan.]
459
[(69)] (70) "Health care" means any of the following intended for use in the diagnosis,
460
treatment, mitigation, or prevention of a human ailment or impairment:
461
(a) professional services;
462
(b) personal services;
463
(c) facilities;
464
(d) equipment;
465
(e) devices;
466
(f) supplies; or
467
(g) medicine.
468
[(70)] (71) (a) "Health care insurance" or "health insurance" means insurance
469
providing:
470
(i) health care benefits; or
471
(ii) payment of incurred health care expenses.
472
(b) "Health care insurance" or "health insurance" does not include accident and health
473
insurance providing benefits for:
474
(i) replacement of income;
475
(ii) short-term accident;
476
(iii) fixed indemnity;
477
(iv) credit accident and health;
478
(v) supplements to liability;
479
(vi) workers' compensation;
480
(vii) automobile medical payment;
481
(viii) no-fault automobile;
482
(ix) equivalent self-insurance; or
483
(x) any type of accident and health insurance coverage that is a part of or attached to
484
another type of policy.
485
[(71)] (72) "Income replacement insurance" or "disability income insurance" means
486
insurance written to provide payments to replace income lost from accident or sickness.
487
[(72)] (73) "Indemnity" means the payment of an amount to offset all or part of an
488
insured loss.
489
[(73)] (74) "Independent adjuster" means an insurance adjuster required to be licensed
490
under Section
31A-26-201
who engages in insurance adjusting as a representative of insurers.
491
[(74)] (75) "Independently procured insurance" means insurance procured under
492
Section
31A-15-104
.
493
[(75)] (76) "Individual" means a natural person.
494
[(76)] (77) "Inland marine insurance" includes insurance covering:
495
(a) property in transit on or over land;
496
(b) property in transit over water by means other than boat or ship;
497
(c) bailee liability;
498
(d) fixed transportation property such as bridges, electric transmission systems, radio
499
and television transmission towers and tunnels; and
500
(e) personal and commercial property floaters.
501
[(77)] (78) "Insolvency" means that:
502
(a) an insurer is unable to pay its debts or meet its obligations as they mature;
503
(b) an insurer's total adjusted capital is less than the insurer's mandatory control level
504
RBC under Subsection
31A-17-601
(8)(c); or
505
(c) an insurer is determined to be hazardous under this title.
506
[(78)] (79) (a) "Insurance" means:
507
(i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
508
persons to one or more other persons; or
509
(ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
510
group of persons that includes the person seeking to distribute that person's risk.
511
(b) "Insurance" includes:
512
(i) risk distributing arrangements providing for compensation or replacement for
513
damages or loss through the provision of services or benefits in kind;
514
(ii) contracts of guaranty or suretyship entered into by the guarantor or surety as a
515
business and not as merely incidental to a business transaction; and
516
(iii) plans in which the risk does not rest upon the person who makes the arrangements,
517
but with a class of persons who have agreed to share it.
518
[(79)] (80) "Insurance adjuster" means a person who directs the investigation,
519
negotiation, or settlement of a claim under an insurance policy other than life insurance or an
520
annuity, on behalf of an insurer, policyholder, or a claimant under an insurance policy.
521
[(80)] (81) "Insurance business" or "business of insurance" includes:
522
(a) providing health care insurance, as defined in Subsection [(70)] (71), by
523
organizations that are or should be licensed under this title;
524
(b) providing benefits to employees in the event of contingencies not within the control
525
of the employees, in which the employees are entitled to the benefits as a right, which benefits
526
may be provided either:
527
(i) by single employers or by multiple employer groups; or
528
(ii) through trusts, associations, or other entities;
529
(c) providing annuities, including those issued in return for gifts, except those provided
530
by persons specified in Subsections
31A-22-1305
(2) and (3);
531
(d) providing the characteristic services of motor clubs as outlined in Subsection
532
[(106)] (107);
533
(e) providing other persons with insurance as defined in Subsection [(78)] (79);
534
(f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
535
or surety, any contract or policy of title insurance;
536
(g) transacting or proposing to transact any phase of title insurance, including:
537
(i) solicitation[,];
538
(ii) negotiation preliminary to execution[,];
539
(iii) execution of a contract of title insurance[,];
540
(iv) insuring[,]; and
541
(v) transacting matters subsequent to the execution of the contract and arising out of
542
[it] the contract, including reinsurance; and
543
(h) doing, or proposing to do, any business in substance equivalent to Subsections
544
[(80)] (81)(a) through (g) in a manner designed to evade the provisions of this title.
545
[(81)] (82) "Insurance consultant" or "consultant" means a person who:
546
(a) advises other persons about insurance needs and coverages;
547
(b) is compensated by the person advised on a basis not directly related to the insurance
548
placed; and
549
(c) except as provided in Section
31A-23a-501
, is not compensated directly or
550
indirectly by an insurer or producer for advice given.
551
[(82)] (83) "Insurance holding company system" means a group of two or more
552
affiliated persons, at least one of whom is an insurer.
553
[(83)] (84) (a) "Insurance producer" or "producer" means a person licensed or required
554
to be licensed under the laws of this state to sell, solicit, or negotiate insurance.
555
(b) With regards to the selling, soliciting, or negotiating of an insurance product to an
556
insurance customer or an insured:
557
(i) "producer for the insurer" means a producer who is compensated directly or
558
indirectly by an insurer for selling, soliciting, or negotiating any product of that insurer; and
559
(ii) "producer for the insured" means a producer who:
560
(A) is compensated directly and only by an insurance customer or an insured; and
561
(B) receives no compensation directly or indirectly from an insurer for selling,
562
soliciting, or negotiating any product of that insurer to an insurance customer or insured.
563
[(84)] (85) (a) "Insured" means a person to whom or for whose benefit an insurer
564
makes a promise in an insurance policy and includes:
565
(i) policyholders;
566
(ii) subscribers;
567
(iii) members; and
568
(iv) beneficiaries.
569
(b) The definition in Subsection [(84)] (85)(a):
570
(i) applies only to this title; and
571
(ii) does not define the meaning of this word as used in insurance policies or
572
certificates.
573
[(85)] (86) (a) (i) "Insurer" means any person doing an insurance business as a
574
principal including:
575
(A) fraternal benefit societies;
576
(B) issuers of gift annuities other than those specified in Subsections
31A-22-1305
(2)
577
and (3);
578
(C) motor clubs;
579
(D) employee welfare plans; and
580
(E) any person purporting or intending to do an insurance business as a principal on
581
that person's own account.
582
(ii) "Insurer" does not include a governmental entity, as defined in Section
63-30-2
, to
583
the extent it is engaged in the activities described in Section
31A-12-107
.
584
(b) "Admitted insurer" is defined in Subsection [(153)] (154)(b).
585
(c) "Alien insurer" is defined in Subsection (7).
586
(d) "Authorized insurer" is defined in Subsection [(153)] (154)(b).
587
(e) "Domestic insurer" is defined in Subsection (47).
588
(f) "Foreign insurer" is defined in Subsection [(61)] (62).
589
(g) "Nonadmitted insurer" is defined in Subsection [(153)] (154)(a).
590
(h) "Unauthorized insurer" is defined in Subsection [(153)] (154)(a).
591
[(86)] (87) "Interinsurance exchange" is defined in Subsection [(135)] (136).
592
[(87)] (88) "Involuntary unemployment insurance" means insurance:
593
(a) offered in connection with an extension of credit;
594
(b) that provides indemnity if the debtor is involuntarily unemployed for payments
595
coming due on a:
596
(i) specific loan; or
597
(ii) credit transaction.
598
[(88)] (89) "Large employer," in connection with a health benefit plan, means an
599
employer who, with respect to a calendar year and to a plan year:
600
(a) employed an average of at least 51 eligible employees on each business day during
601
the preceding calendar year; and
602
(b) employs at least two employees on the first day of the plan year.
603
[(89)] (90) (a) Except for a retainer contract or legal assistance described in Section
604
31A-1-103
, "legal expense insurance" means insurance written to indemnify or pay for
605
specified legal expenses.
606
(b) "Legal expense insurance" includes arrangements that create reasonable
607
expectations of enforceable rights.
608
(c) "Legal expense insurance" does not include the provision of, or reimbursement for,
609
legal services incidental to other insurance coverages.
610
[(90)] (91) (a) "Liability insurance" means insurance against liability:
611
(i) for death, injury, or disability of any human being, or for damage to property,
612
exclusive of the coverages under:
613
(A) Subsection [(100)] (101) for medical malpractice insurance;
614
(B) Subsection [(127)] (128) for professional liability insurance; and
615
(C) Subsection [(157)] (158) for workers' compensation insurance;
616
(ii) for medical, hospital, surgical, and funeral benefits to persons other than the
617
insured who are injured, irrespective of legal liability of the insured, when issued with or
618
supplemental to insurance against legal liability for the death, injury, or disability of human
619
beings, exclusive of the coverages under:
620
(A) Subsection [(100)] (101) for medical malpractice insurance;
621
(B) Subsection [(127)] (128) for professional liability insurance; and
622
(C) Subsection [(157)] (158) for workers' compensation insurance;
623
(iii) for loss or damage to property resulting from accidents to or explosions of boilers,
624
pipes, pressure containers, machinery, or apparatus;
625
(iv) for loss or damage to any property caused by the breakage or leakage of sprinklers,
626
water pipes and containers, or by water entering through leaks or openings in buildings; or
627
(v) for other loss or damage properly the subject of insurance not within any other kind
628
or kinds of insurance as defined in this chapter, if such insurance is not contrary to law or
629
public policy.
630
(b) "Liability insurance" includes:
631
(i) vehicle liability insurance as defined in Subsection [(155)] (156);
632
(ii) residential dwelling liability insurance as defined in Subsection [(138)] (139); and
633
(iii) making inspection of, and issuing certificates of inspection upon, elevators,
634
boilers, machinery, and apparatus of any kind when done in connection with insurance on
635
them.
636
[(91)] (92) (a) "License" means the authorization issued by the commissioner to engage
637
in some activity that is part of or related to the insurance business.
638
(b) "License" includes certificates of authority issued to insurers.
639
[(92)] (93) (a) "Life insurance" means insurance on human lives and insurances
640
pertaining to or connected with human life.
641
(b) The business of life insurance includes:
642
(i) granting death benefits;
643
(ii) granting annuity benefits;
644
(iii) granting endowment benefits;
645
(iv) granting additional benefits in the event of death by accident;
646
(v) granting additional benefits to safeguard the policy against lapse in the event of
647
disability; and
648
(vi) providing optional methods of settlement of proceeds.
649
[(93)] (94) "Limited license" means a license that:
650
(a) is issued for a specific product of insurance; and
651
(b) limits an individual or agency to transact only for that product or insurance.
652
[(94)] (95) "Limited line credit insurance" includes the following forms of insurance:
653
(a) credit life;
654
(b) credit accident and health;
655
(c) credit property;
656
(d) credit unemployment;
657
(e) involuntary unemployment;
658
(f) mortgage life;
659
(g) mortgage guaranty;
660
(h) mortgage accident and health;
661
(i) guaranteed automobile protection; and
662
(j) any other form of insurance offered in connection with an extension of credit that:
663
(i) is limited to partially or wholly extinguishing the credit obligation; and
664
(ii) the commissioner determines by rule should be designated as a form of limited line
665
credit insurance.
666
[(95)] (96) "Limited line credit insurance producer" means a person who sells, solicits,
667
or negotiates one or more forms of limited line credit insurance coverage to individuals through
668
a master, corporate, group, or individual policy.
669
[(96)] (97) "Limited line insurance" includes:
670
(a) bail bond;
671
(b) limited line credit insurance;
672
(c) legal expense insurance;
673
(d) motor club insurance;
674
(e) rental car-related insurance;
675
(f) travel insurance; and
676
(g) any other form of limited insurance that the commissioner determines by rule
677
should be designated a form of limited line insurance.
678
[(97)] (98) "Limited lines authority" includes:
679
(a) the lines of insurance listed in Subsection [(96)] (97); and
680
(b) a customer service representative.
681
[(98)] (99) "Limited lines producer" means a person who sells, solicits, or negotiates
682
limited lines insurance.
683
[(99)] (100) (a) "Long-term care insurance" means an insurance policy or rider
684
advertised, marketed, offered, or designated to provide coverage:
685
(i) in a setting other than an acute care unit of a hospital;
686
(ii) for not less than 12 consecutive months for each covered person on the basis of:
687
(A) expenses incurred;
688
(B) indemnity;
689
(C) prepayment; or
690
(D) another method;
691
(iii) for one or more necessary or medically necessary services that are:
692
(A) diagnostic;
693
(B) preventative;
694
(C) therapeutic;
695
(D) rehabilitative;
696
(E) maintenance; or
697
(F) personal care; and
698
(iv) that may be issued by:
699
(A) an insurer;
700
(B) a fraternal benefit society;
701
(C) (I) a nonprofit health hospital; and
702
(II) a medical service corporation;
703
(D) a prepaid health plan;
704
(E) a health maintenance organization; or
705
(F) an entity similar to the entities described in Subsections [(99)] (100)(a)(iv)(A)
706
through (E) to the extent that the entity is otherwise authorized to issue life or health care
707
insurance.
708
(b) "Long-term care insurance" includes:
709
(i) any of the following that provide directly or supplement long-term care insurance:
710
(A) a group or individual annuity or rider; or
711
(B) a life insurance policy or rider;
712
(ii) a policy or rider that provides for payment of benefits based on:
713
(A) cognitive impairment; or
714
(B) functional capacity; or
715
(iii) a qualified long-term care insurance contract.
716
(c) "Long-term care insurance" does not include:
717
(i) a policy that is offered primarily to provide basic Medicare supplement coverage;
718
(ii) basic hospital expense coverage;
719
(iii) basic medical/surgical expense coverage;
720
(iv) hospital confinement indemnity coverage;
721
(v) major medical expense coverage;
722
(vi) income replacement or related asset-protection coverage;
723
(vii) accident only coverage;
724
(viii) coverage for a specified:
725
(A) disease; or
726
(B) accident;
727
(ix) limited benefit health coverage; or
728
(x) a life insurance policy that accelerates the death benefit to provide the option of a
729
lump sum payment:
730
(A) if the following are not conditioned on the receipt of long-term care:
731
(I) benefits; or
732
(II) eligibility; and
733
(B) the coverage is for one or more the following qualifying events:
734
(I) terminal illness;
735
(II) medical conditions requiring extraordinary medical intervention; or
736
(III) permanent institutional confinement.
737
[(100)] (101) "Medical malpractice insurance" means insurance against legal liability
738
incident to the practice and provision of medical services other than the practice and provision
739
of dental services.
740
[(101)] (102) "Member" means a person having membership rights in an insurance
741
corporation.
742
[(102)] (103) "Minimum capital" or "minimum required capital" means the capital that
743
must be constantly maintained by a stock insurance corporation as required by statute.
744
[(103)] (104) "Mortgage accident and health insurance" means insurance offered in
745
connection with an extension of credit that provides indemnity for payments coming due on a
746
mortgage while the debtor is disabled.
747
[(104)] (105) "Mortgage guaranty insurance" means surety insurance under which
748
mortgagees and other creditors are indemnified against losses caused by the default of debtors.
749
[(105)] (106) "Mortgage life insurance" means insurance on the life of a debtor in
750
connection with an extension of credit that pays if the debtor dies.
751
[(106)] (107) "Motor club" means a person:
752
(a) licensed under:
753
(i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
754
(ii) Chapter 11, Motor Clubs; or
755
(iii) Chapter 14, Foreign Insurers; and
756
(b) that promises for an advance consideration to provide for a stated period of time:
757
(i) legal services under Subsection
31A-11-102
(1)(b);
758
(ii) bail services under Subsection
31A-11-102
(1)(c); or
759
(iii) trip reimbursement, towing services, emergency road services, stolen automobile
760
services, a combination of these services, or any other services given in Subsections
761
31A-11-102
(1)(b) through (f).
762
[(107)] (108) "Mutual" means a mutual insurance corporation.
763
[(108)] (109) "Network plan" means health care insurance:
764
(a) that is issued by an insurer; and
765
(b) under which the financing and delivery of medical care is provided, in whole or in
766
part, through a defined set of providers under contract with the insurer, including the financing
767
and delivery of items paid for as medical care.
768
[(109)] (110) "Nonparticipating" means a plan of insurance under which the insured is
769
not entitled to receive dividends representing shares of the surplus of the insurer.
770
[(110)] (111) "Ocean marine insurance" means insurance against loss of or damage to:
771
(a) ships or hulls of ships;
772
(b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
773
securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
774
interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
775
(c) earnings such as freight, passage money, commissions, or profits derived from
776
transporting goods or people upon or across the oceans or inland waterways; or
777
(d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
778
owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
779
in connection with maritime activity.
780
[(111)] (112) "Order" means an order of the commissioner.
781
[(112)] (113) "Outline of coverage" means a summary that explains an accident and
782
health insurance policy.
783
[(113)] (114) "Participating" means a plan of insurance under which the insured is
784
entitled to receive dividends representing shares of the surplus of the insurer.
785
[(114)] (115) "Participation," as used in a health benefit plan, means a requirement
786
relating to the minimum percentage of eligible employees that must be enrolled in relation to
787
the total number of eligible employees of an employer reduced by each eligible employee who
788
voluntarily declines coverage under the plan because the employee has other group health care
789
insurance coverage.
790
[(115)] (116) "Person" includes an individual, partnership, corporation, incorporated or
791
unincorporated association, joint stock company, trust, limited liability company, reciprocal,
792
syndicate, or any similar entity or combination of entities acting in concert.
793
[(116)] (117) "Personal lines insurance" means property and casualty insurance
794
coverage sold for primarily noncommercial purposes to:
795
(a) individuals; and
796
(b) families.
797
[(117)] (118) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
798
[(118)] (119) "Plan year" means:
799
(a) the year that is designated as the plan year in:
800
(i) the plan document of a group health plan; or
801
(ii) a summary plan description of a group health plan;
802
(b) if the plan document or summary plan description does not designate a plan year or
803
there is no plan document or summary plan description:
804
(i) the year used to determine deductibles or limits;
805
(ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
806
or
807
(iii) the employer's taxable year if:
808
(A) the plan does not impose deductibles or limits on a yearly basis; and
809
(B) (I) the plan is not insured; or
810
(II) the insurance policy is not renewed on an annual basis; or
811
(c) in a case not described in Subsection [(118)] (119)(a) or (b), the calendar year.
812
[(119)] (120) (a) (i) "Policy" means any document, including attached endorsements
813
and riders, purporting to be an enforceable contract, which memorializes in writing some or all
814
of the terms of an insurance contract.
815
(ii) "Policy" includes a service contract issued by:
816
(A) a motor club under Chapter 11, Motor Clubs;
817
(B) a service contract provided under Chapter 6a, Service Contracts; and
818
(C) a corporation licensed under:
819
(I) Chapter 7, Nonprofit Health Service Insurance Corporations; or
820
(II) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
821
(iii) "Policy" does not include:
822
(A) a certificate under a group insurance contract; or
823
(B) a document that does not purport to have legal effect.
824
(b) (i) "Group insurance policy" means a policy covering a group of persons that is
825
issued to a policyholder on behalf of the group, for the benefit of group members who are
826
selected under procedures defined in the policy or in agreements which are collateral to the
827
policy.
828
(ii) A group insurance policy may include members of the policyholder's family or
829
dependents.
830
(c) "Blanket insurance policy" means a group policy covering classes of persons
831
without individual underwriting, where the persons insured are determined by definition of the
832
class with or without designating the persons covered.
833
[(120)] (121) "Policyholder" means the person who controls a policy, binder, or oral
834
contract by ownership, premium payment, or otherwise.
835
[(121)] (122) "Policy illustration" means a presentation or depiction that includes
836
nonguaranteed elements of a policy of life insurance over a period of years.
837
[(122)] (123) "Policy summary" means a synopsis describing the elements of a life
838
insurance policy.
839
[(123)] (124) "Preexisting condition," in connection with a health benefit plan, means:
840
(a) a condition for which medical advice, diagnosis, care, or treatment was
841
recommended or received during the six months immediately preceding the earlier of:
842
(i) the enrollment date; or
843
(ii) the effective date of coverage; or
844
(b) for an individual insurance policy, a pregnancy existing on the effective date of
845
coverage.
846
[(124)] (125) (a) "Premium" means the monetary consideration for an insurance
847
policy[, and].
848
(b) "Premium" includes, however designated:
849
(i) assessments[,];
850
(ii) membership fees[,];
851
(iii) required contributions[,]; or
852
(iv) monetary consideration[, however designated].
853
[(b)] (c) (i) Consideration paid to third party administrators for their services is not
854
"premium[,]." [though amounts]
855
(ii) Amounts paid by third party administrators to insurers for insurance on the risks
856
administered by the third party administrators are "premium."
857
[(125)] (126) "Principal officers" of a corporation means the officers designated under
858
Subsection
31A-5-203
(3).
859
[(126)] (127) "Proceedings" includes actions and special statutory proceedings.
860
[(127)] (128) "Professional liability insurance" means insurance against legal liability
861
incident to the practice of a profession and provision of any professional services.
862
[(128)] (129) "Property insurance" means insurance against loss or damage to real or
863
personal property of every kind and any interest in that property, from all hazards or causes,
864
and against loss consequential upon the loss or damage including vehicle comprehensive and
865
vehicle physical damage coverages, but excluding inland marine insurance and ocean marine
866
insurance as defined under Subsections [(76)] (77) and [(110)] (111).
867
[(129)] (130) "Qualified long-term care insurance contract" or "federally tax qualified
868
long-term care insurance contract" means:
869
(a) an individual or group insurance contract that meets the requirements of Section
870
7702B(b), Internal Revenue Code; or
871
(b) the portion of a life insurance contract that provides long-term care insurance:
872
(i) (A) by rider; or
873
(B) as a part of the contract; and
874
(ii) that satisfies the requirements of Section 7702B(b) and (e), Internal Revenue Code.
875
[(130)] (131) "Qualified United States financial institution" means an institution that:
876
(a) is:
877
(i) organized under the laws of the United States or any state; or
878
(ii) in the case of a United States office of a foreign banking organization, licensed
879
under the laws of the United States or any state;
880
(b) is regulated, supervised, and examined by United States federal or state authorities
881
having regulatory authority over banks and trust companies; and
882
(c) meets the standards of financial condition and standing that are considered
883
necessary and appropriate to regulate the quality of financial institutions whose letters of credit
884
will be acceptable to the commissioner as determined by:
885
(i) the commissioner by rule; or
886
(ii) the Securities Valuation Office of the National Association of Insurance
887
Commissioners.
888
[(131)] (132) (a) "Rate" means:
889
(i) the cost of a given unit of insurance; or
890
(ii) for property-casualty insurance, that cost of insurance per exposure unit either
891
expressed as:
892
(A) a single number; or
893
(B) a pure premium rate, adjusted before any application of individual risk variations
894
based on loss or expense considerations to account for the treatment of:
895
(I) expenses;
896
(II) profit; and
897
(III) individual insurer variation in loss experience.
898
(b) "Rate" does not include a minimum premium.
899
[(132)] (133) (a) Except as provided in Subsection [(132)] (133)(b), "rate service
900
organization" means any person who assists insurers in rate making or filing by:
901
(i) collecting, compiling, and furnishing loss or expense statistics;
902
(ii) recommending, making, or filing rates or supplementary rate information; or
903
(iii) advising about rate questions, except as an attorney giving legal advice.
904
(b) "Rate service organization" does not mean:
905
(i) an employee of an insurer;
906
(ii) a single insurer or group of insurers under common control;
907
(iii) a joint underwriting group; or
908
(iv) a natural person serving as an actuarial or legal consultant.
909
[(133)] (134) "Rating manual" means any of the following used to determine initial and
910
renewal policy premiums:
911
(a) a manual of rates;
912
(b) classifications;
913
(c) rate-related underwriting rules; and
914
(d) rating formulas that describe steps, policies, and procedures for determining initial
915
and renewal policy premiums.
916
[(134)] (135) "Received by the department" means:
917
(a) except as provided in Subsection [(134)] (135)(b), the date delivered to and
918
stamped received by the department, whether delivered:
919
(i) in person; or
920
(ii) electronically; and
921
(b) if delivered to the department by a delivery service, the delivery service's postmark
922
date or pick-up date unless otherwise stated in:
923
(i) statute;
924
(ii) rule; or
925
(iii) a specific filing order.
926
[(135)] (136) "Reciprocal" or "interinsurance exchange" means any unincorporated
927
association of persons:
928
(a) operating through an attorney-in-fact common to all of them; and
929
(b) exchanging insurance contracts with one another that provide insurance coverage
930
on each other.
931
[(136)] (137) "Reinsurance" means an insurance transaction where an insurer, for
932
consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
933
reinsurance transactions, this title sometimes refers to:
934
(a) the insurer transferring the risk as the "ceding insurer"; and
935
(b) the insurer assuming the risk as the:
936
(i) "assuming insurer"; or
937
(ii) "assuming reinsurer."
938
[(137)] (138) "Reinsurer" means any person[, firm, association, or corporation]
939
licensed in this state as an insurer with the authority to assume reinsurance.
940
[(138)] (139) "Residential dwelling liability insurance" means insurance against
941
liability resulting from or incident to the ownership, maintenance, or use of a residential
942
dwelling that is a detached single family residence or multifamily residence up to four units.
943
[(139)] (140) "Retrocession" means reinsurance with another insurer of a liability
944
assumed under a reinsurance contract. A reinsurer "retrocedes" when it reinsures with another
945
insurer part of a liability assumed under a reinsurance contract.
946
[(140)] (141) "Rider" means an endorsement to:
947
(a) an insurance policy; or
948
(b) an insurance certificate.
949
[(141)] (142) (a) "Security" means any:
950
(i) note;
951
(ii) stock;
952
(iii) bond;
953
(iv) debenture;
954
(v) evidence of indebtedness;
955
(vi) certificate of interest or participation in any profit-sharing agreement;
956
(vii) collateral-trust certificate;
957
(viii) preorganization certificate or subscription;
958
(ix) transferable share;
959
(x) investment contract;
960
(xi) voting trust certificate;
961
(xii) certificate of deposit for a security;
962
(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
963
payments out of production under such a title or lease;
964
(xiv) commodity contract or commodity option;
965
(xv) any certificate of interest or participation in, temporary or interim certificate for,
966
receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
967
in Subsections [(141)] (142)(a)(i) through (xiv); or
968
(xvi) any other interest or instrument commonly known as a security.
969
(b) "Security" does not include:
970
(i) any [insurance or endowment policy or annuity contract] of the following under
971
which an insurance company promises to pay money in a specific lump sum or periodically for
972
life or some other specified period[; or]:
973
(A) insurance;
974
(B) endowment policy; or
975
(C) annuity contract; or
976
(ii) a burial certificate or burial contract.
977
[(142)] (143) "Self-insurance" means any arrangement under which a person provides
978
for spreading its own risks by a systematic plan.
979
(a) Except as provided in this Subsection [(142)] (143), "self-insurance" does not
980
include an arrangement under which a number of persons spread their risks among themselves.
981
(b) "Self-insurance" [does include] includes:
982
(i) an arrangement by which a governmental entity, as defined in Section
63-30-2
,
983
undertakes to indemnify its employees for liability arising out of the employees' employment[.
984
(c) Self-insurance does include]; and
985
(ii) an arrangement by which a person with a managed program of self-insurance and
986
risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or
987
employees for liability or risk which is related to the relationship or employment.
988
[(d)] (c) "Self-insurance" does not include any arrangement with independent
989
contractors.
990
[(143)] (144) "Sell" means to exchange a contract of insurance:
991
(a) by any means;
992
(b) for money or its equivalent; and
993
(c) on behalf of an insurance company.
994
[(144)] (145) "Short-term care insurance" means any insurance policy or rider
995
advertised, marketed, offered, or designed to provide coverage that is similar to long-term care
996
insurance but that provides coverage for less than 12 consecutive months for each covered
997
person.
998
[(145)] (146) "Small employer," in connection with a health benefit plan, means an
999
employer who, with respect to a calendar year and to a plan year:
1000
(a) employed an average of at least two employees but not more than 50 eligible
1001
employees on each business day during the preceding calendar year; and
1002
(b) employs at least two employees on the first day of the plan year.
1003
[(146)] (147) (a) "Subsidiary" of a person means an affiliate controlled by that person
1004
either directly or indirectly through one or more affiliates or intermediaries.
1005
(b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
1006
shares are owned by that person either alone or with its affiliates, except for the minimum
1007
number of shares the law of the subsidiary's domicile requires to be owned by directors or
1008
others.
1009
[(147)] (148) Subject to Subsection [(78)] (79)(b), "surety insurance" includes:
1010
(a) a guarantee against loss or damage resulting from failure of principals to pay or
1011
perform their obligations to a creditor or other obligee;
1012
(b) bail bond insurance; and
1013
(c) fidelity insurance.
1014
[(148)] (149) (a) "Surplus" means the excess of assets over the sum of paid-in capital
1015
and liabilities.
1016
(b) (i) "Permanent surplus" means the surplus of a mutual insurer that has been
1017
designated by the insurer as permanent.
1018
(ii) Sections
31A-5-211
,
31A-7-201
,
31A-8-209
,
31A-9-209
, and
31A-14-209
require
1019
that mutuals doing business in this state maintain specified minimum levels of permanent
1020
surplus.
1021
(iii) Except for assessable mutuals, the minimum permanent surplus requirement is
1022
essentially the same as the minimum required capital requirement that applies to stock insurers.
1023
(c) "Excess surplus" means:
1024
(i) for life or accident and health insurers, health organizations, and property and
1025
casualty insurers as defined in Section
31A-17-601
, the lesser of:
1026
(A) that amount of an insurer's or health organization's total adjusted capital, as defined
1027
in Subsection [(151)] (152), that exceeds the product of:
1028
(I) 2.5; and
1029
(II) the sum of the insurer's or health organization's minimum capital or permanent
1030
surplus required under Section
31A-5-211
,
31A-9-209
, or
31A-14-205
; or
1031
(B) that amount of an insurer's or health organization's total adjusted capital, as defined
1032
in Subsection [(151)] (152), that exceeds the product of:
1033
(I) 3.0; and
1034
(II) the authorized control level RBC as defined in Subsection
31A-17-601
(8)(a); and
1035
(ii) for monoline mortgage guaranty insurers, financial guaranty insurers, and title
1036
insurers, that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
1037
(A) 1.5; and
1038
(B) the insurer's total adjusted capital required by Subsection
31A-17-609
(1).
1039
[(149)] (150) "Third party administrator" or "administrator" means any person who
1040
collects charges or premiums from, or who, for consideration, adjusts or settles claims of
1041
residents of the state in connection with insurance coverage, annuities, or service insurance
1042
coverage, except:
1043
(a) a union on behalf of its members;
1044
(b) a person administering any:
1045
(i) pension plan subject to the federal Employee Retirement Income Security Act of
1046
1974;
1047
(ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
1048
(iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
1049
(c) an employer on behalf of the employer's employees or the employees of one or
1050
more of the subsidiary or affiliated corporations of the employer;
1051
(d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
1052
for which the insurer holds a license in this state; or
1053
(e) a person:
1054
(i) licensed or exempt from licensing under:
1055
(A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1056
Reinsurance Intermediaries[,]; or
1057
(B) Chapter 26, Insurance Adjusters[,]; and
1058
(ii) whose activities are limited to those authorized under the license the person holds
1059
or for which the person is exempt.
1060
[(150)] (151) "Title insurance" means the insuring, guaranteeing, or indemnifying of
1061
owners of real or personal property or the holders of liens or encumbrances on that property, or
1062
others interested in the property against loss or damage suffered by reason of liens or
1063
encumbrances upon, defects in, or the unmarketability of the title to the property, or invalidity
1064
or unenforceability of any liens or encumbrances on the property.
1065
[(151)] (152) "Total adjusted capital" means the sum of an insurer's or health
1066
organization's statutory capital and surplus as determined in accordance with:
1067
(a) the statutory accounting applicable to the annual financial statements required to be
1068
filed under Section
31A-4-113
; and
1069
(b) any other items provided by the RBC instructions, as RBC instructions is defined in
1070
Section
31A-17-601
.
1071
[(152)] (153) (a) "Trustee" means "director" when referring to the board of directors of
1072
a corporation.
1073
(b) "Trustee," when used in reference to an employee welfare fund, means an
1074
individual, firm, association, organization, joint stock company, or corporation, whether acting
1075
individually or jointly and whether designated by that name or any other, that is charged with
1076
or has the overall management of an employee welfare fund.
1077
[(153)] (154) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted
1078
insurer" means an insurer:
1079
(i) not holding a valid certificate of authority to do an insurance business in this state;
1080
or
1081
(ii) transacting business not authorized by a valid certificate.
1082
(b) "Admitted insurer" or "authorized insurer" means an insurer:
1083
(i) holding a valid certificate of authority to do an insurance business in this state; and
1084
(ii) transacting business as authorized by a valid certificate.
1085
[(154)] (155) "Underwrite" means the authority to accept or reject risk on behalf of the
1086
insurer.
1087
[(155)] (156) "Vehicle liability insurance" means insurance against liability resulting
1088
from or incident to ownership, maintenance, or use of any land vehicle or aircraft, exclusive of
1089
vehicle comprehensive and vehicle physical damage coverages under Subsection [(128)] (129).
1090
[(156)] (157) "Voting security" means a security with voting rights, and includes any
1091
security convertible into a security with a voting right associated with [it] the security.
1092
[(157)] (158) "Workers' compensation insurance" means:
1093
(a) insurance for indemnification of employers against liability for compensation based
1094
on:
1095
(i) compensable accidental injuries; and
1096
(ii) occupational disease disability;
1097
(b) employer's liability insurance incidental to workers' compensation insurance and
1098
written in connection with [it] workers' compensation insurance; and
1099
(c) insurance assuring to the persons entitled to workers' compensation benefits the
1100
compensation provided by law.
1101
Section 2.
Section
31A-2-205
is amended to read:
1102
31A-2-205. Examination costs.
1103
(1) (a) Except as provided in Subsection (3), [examinees that are insurers] an examinee
1104
that is an insurer, rate service [organizations] organization, or the [subsidiaries] subsidiary of
1105
either shall reimburse the [Insurance Department] department for the reasonable costs of
1106
examinations made under Sections
31A-2-203
and
31A-2-204
. The following costs shall be
1107
reimbursed:
1108
(i) actual travel expenses;
1109
(ii) reasonable living expense allowance;
1110
(iii) compensation at reasonable rates for all professionals reasonably employed for the
1111
examination under Subsection (4);
1112
(iv) the administration and supervisory expense of:
1113
(A) the [Insurance Department] department; and
1114
(B) the attorney general's office; and
1115
(v) an amount necessary to cover fringe benefits authorized by the commissioner or
1116
provided by law.
1117
(b) In determining rates, the commissioner shall consider the rates recommended [by
1118
the National Association of Insurance Commissioners] and outlined in the examination manual
1119
sponsored by the [association] National Association of Insurance Commissioners.
1120
[(b)] (c) This Subsection (1) applies to a surplus lines [producers] producer to the
1121
extent that the examinations are of [their] the surplus line producer's surplus lines business.
1122
(2) An insurer requesting the examination of one of its producers shall pay the cost of
1123
the examination. Otherwise, the department shall pay the cost of examining [licensees] a
1124
licensee other than those specified under Subsection (1).
1125
(3) (a) On the examinee's request or at the commissioner's discretion, the [Insurance
1126
Department] department may pay all or part of the costs of an examination whenever the
1127
commissioner finds that because of the frequency of examinations or the financial condition of
1128
the examinee, imposition of the costs would place an unreasonable burden on the examinee.
1129
(b) The commissioner shall include in [his] the commissioner's annual report
1130
information about any instance in which the commissioner has applied this Subsection (3).
1131
(4) (a) [Technical experts] A technical expert employed under Subsection
1132
31A-2-203
(3) shall present to the commissioner a statement of all expenses incurred by [them]
1133
the technical expert in conjunction with an examination.
1134
(b) The examined insurer shall, at the commissioner's direction, pay to the technical
1135
experts or specialists the:
1136
(i) actual travel expenses[,];
1137
(ii) reasonable living expenses[,]; and
1138
(iii) compensation at customary rates for expenses necessarily incurred as approved by
1139
the commissioner.
1140
(c) The examined insurer shall reimburse:
1141
(i) department examiners for their:
1142
(A) actual travel expenses; and
1143
(B) reasonable living expenses; and [shall reimburse]
1144
(ii) the department for the compensation of department examiners involved in the
1145
examination.
1146
(d) (i) The examined insurer shall certify the consolidated account of all charges and
1147
expenses for the examination. [One]
1148
(ii) The insurer shall:
1149
(A) retain a copy [shall be retained by the insurer and the other shall be filed] of the
1150
consolidated account; and
1151
(B) file a copy of the consolidated account with the department as a public record.
1152
(e) (i) An annual report of examination charges paid by examined insurers directly to
1153
persons employed under Subsection
31A-2-203
(3) or to department examiners shall be
1154
included with the department's budget request[, but amounts].
1155
(f) Amounts paid directly by examined insurers to persons employed under Subsection
1156
31A-2-203
(3) or to department examiners may not be deducted from the department's
1157
appropriation.
1158
(5) (a) The amount payable under Subsection (1) is due ten days after the examinee has
1159
been served with a detailed account of the costs.
1160
(b) Payments received by the department under this Subsection (5) shall be handled as
1161
provided by [Subsection ] Section
31A-3-101
.
1162
(6) (a) The commissioner may require an examinee under Subsection (1), or an insurer
1163
requesting an examination under Subsection (2), either before or during an examination, to
1164
make deposits with the state treasurer to pay the costs of examination.
1165
(b) Any deposit made under this Subsection (6) shall be held in trust by the state
1166
treasurer until applied to pay the [Insurance Department] department the costs payable under
1167
this section.
1168
(c) If a deposit made under this Subsection (6) exceeds examination costs, the state
1169
treasurer shall refund the surplus.
1170
(7) [Domestic insurers] A domestic insurer may offset the examination expenses paid
1171
under this section against premium taxes under Subsection
59-9-102
(2).
1172
Section 3.
Section
31A-2-207
is amended to read:
1173
31A-2-207. Commissioner's records and reports.
1174
(1) The commissioner shall maintain all [Insurance Department] department records
1175
[which] that are:
1176
(a) required by law;
1177
(b) necessary for the effective operation of the department; or
1178
(c) necessary to maintain a full record of department activities.
1179
(2) The records of the department may be preserved, managed, stored, and made
1180
available for review consistent with:
1181
(a) another Utah statute;
1182
(b) the rules made under Section
63-2-904
;
1183
(c) the decisions of the State Records Committee made under Title 63, Chapter 2,
1184
Government Records Access and Management Act; or
1185
(d) the needs of the public.
1186
(3) [No Insurance Department] A department record may not be destroyed, damaged,
1187
or disposed of without:
1188
(a) authorization of the commissioner; and
1189
(b) compliance with all other applicable laws.
1190
(4) The commissioner shall maintain a permanent record of [his] the commissioner's
1191
proceedings and important activities, including:
1192
(a) a concise statement of the condition of each insurer examined by [him,] the
1193
commissioner; and
1194
(b) a record of all certificates of authority and licenses issued by [him] the
1195
commissioner.
1196
(5) (a) Prior to October 1 of each year, the commissioner shall prepare an annual report
1197
to the governor which shall include, for the preceding calendar year, the information
1198
concerning the department and the insurance industry which the commissioner believes will be
1199
useful to the governor and the public. [This]
1200
(b) The report required by this Subsection (5) shall include the information required
1201
under Chapter 27 and Subsections
31A-2-106
(2),
31A-2-205
(3), and
31A-2-208
(3).
1202
(c) The commissioner shall [have this] make the report [printed in sufficient numbers
1203
to meet the expected] required by this Subsection (5) available to the public and industry
1204
[demand for the document] in electronic format.
1205
(6) All department records and reports are open to public inspection unless specifically
1206
provided otherwise by statute or by Title 63, Chapter 2, Government Records Access and
1207
Management Act.
1208
(7) On request, the commissioner shall provide to any person certified or uncertified
1209
copies of any record in the department that is open to public inspection.
1210
(8) Notwithstanding Subsection (6) and Title 63, Chapter 2, Government Records
1211
Access and Management Act, the commissioner shall protect from disclosure any record, as
1212
defined in Section
63-2-103
, or other document received from an insurance regulator of
1213
another jurisdiction:
1214
(a) at least to the same extent the record or document is protected from disclosure
1215
under the laws applicable to the insurance regulator providing the record or document; or
1216
(b) under the same terms and conditions of confidentiality as the National Association
1217
of Insurance Commissioners requires as a condition of participating in any of the National
1218
Association of Insurance Commissioners' programs.
1219
Section 4.
Section
31A-2-309
is amended to read:
1220
31A-2-309. Service of process through state officer.
1221
(1) The commissioner, or the lieutenant governor when the subject proceeding is
1222
brought by the state, is the agent for receipt of service of any summons, notice, order, pleading,
1223
or any other legal process relating to a Utah court or administrative agency upon the following:
1224
(a) all insurers authorized to do business in this state, while authorized to do business
1225
in this state, and thereafter in any proceeding arising from or related to any transaction having a
1226
connection with this state;
1227
(b) all surplus lines insurers for any proceeding arising out of a contract of insurance
1228
that is subject to the surplus lines law, or out of a certificate, cover note, or other confirmation
1229
of that type of insurance;
1230
(c) all unauthorized insurers or other persons assisting unauthorized insurers under
1231
Subsection
31A-15-102
(1) by doing an act specified in Subsection
31A-15-102
(2), for a
1232
proceeding arising out of the transaction that is subject to the unauthorized insurance law;
1233
(d) any nonresident producer, consultant, adjuster, and third party administrator, while
1234
authorized to do business in this state, and thereafter in any proceeding arising from or related
1235
to any transaction having a connection with this state; and
1236
(e) any reinsurer submitting to the commissioner's jurisdiction under Subsection
1237
31A-17-404
(7).
1238
(2) [Each] The following is considered to have irrevocably appointed the commissioner
1239
and lieutenant governor as that person's agents in accordance with Subsection (1):
1240
(a) each licensed insurer by applying for and receiving a certificate of authority[,];
1241
(b) each surplus lines insurer by entering into a contract subject to the surplus lines
1242
law[,];
1243
(c) each unauthorized insurer by doing in this state any of the acts prohibited by
1244
Section [
31A-15-101
,]
31A-15-103
; and
1245
(d) each nonresident producer, consultant, adjuster, and third party administrator [is
1246
considered to have irrevocably appointed the commissioner and lieutenant governor as his
1247
agents in accordance with Subsection (1)].
1248
(3) The commissioner and lieutenant governor are also agents for the executors,
1249
administrators or personal representatives, receivers, trustees, or other successors in interest of
1250
the persons specified under Subsection (1).
1251
(4) Litigants serving process on the commissioner or lieutenant governor under this
1252
section shall pay the fee applicable under Section
31A-3-103
.
1253
(5) The right to substituted service under this section does not limit the right to serve a
1254
summons, notice, order, pleading, demand, or other process upon a person in any other manner
1255
provided by law.
1256
Section 5.
Section
31A-4-113
is amended to read:
1257
31A-4-113. Annual statements.
1258
(1) (a) Each authorized insurer shall annually, on or before March 1, file with the
1259
commissioner a true statement of [its] the authorized insurer's financial condition, transactions,
1260
and affairs as of December 31 of the preceding year.
1261
(b) The statement required by Subsection (1)(a) shall be:
1262
(i) verified by the oaths of at least two of the insurer's principal officers; and
1263
(ii) in the general form and provide the information as prescribed by the commissioner
1264
by rule.
1265
(c) The commissioner may, for good cause shown, extend the date for filing the
1266
statement required by Subsection (1)(a)[, except that the deadline for filing fee payment may
1267
not be extended].
1268
(2) The annual statement of an alien insurer shall:
1269
(a) relate only to [its] the alien insurer's transactions and affairs in the United States
1270
unless the commissioner requires otherwise; and
1271
(b) be verified by:
1272
(i) the insurer's United States manager; or
1273
(ii) the insurer's authorized officers.
1274
Section 6.
Section
31A-8-103
is amended to read:
1275
31A-8-103. Applicability to other provisions of law.
1276
(1) (a) Except for exemptions specifically granted under this title, an organization is
1277
subject to regulation under all of the provisions of this title.
1278
(b) Notwithstanding any provision of this title, an organization licensed under this
1279
chapter:
1280
(i) is wholly exempt from:
1281
(A) Chapter 7, Nonprofit Health Service Insurance Corporations;
1282
(B) Chapter 9, Insurance Fraternals;
1283
(C) Chapter 10, Annuities;
1284
(D) Chapter 11, Motor Clubs;
1285
(E) Chapter 12, State Risk Management Fund;
1286
(F) Chapter 13, Employee Welfare Funds and Plans;
1287
(G) Chapter 19a, Utah Rate Regulation Act; and
1288
(H) Chapter 28, Guaranty Associations; and
1289
(ii) is not subject to:
1290
(A) Chapter 3, Department Funding, Fees, and Taxes, except for Part I;
1291
(B) Section
31A-4-107
;
1292
(C) Chapter 5, Domestic Stock and Mutual Insurance Corporations, except for
1293
provisions specifically made applicable by this chapter;
1294
(D) Chapter 14, Foreign Insurers, except for provisions specifically made applicable by
1295
this chapter;
1296
(E) Chapter 17, Determination of Financial Condition, except:
1297
(I) Parts II and VI; or
1298
(II) as made applicable by the commissioner by rule consistent with this chapter;
1299
(F) Chapter 18, Investments, except as made applicable by the commissioner by rule
1300
consistent with this chapter; and
1301
(G) Chapter 22, Contracts in Specific Lines, except for Parts VI, VII, and XII.
1302
(2) The commissioner may by rule waive other specific provisions of this title that the
1303
commissioner considers inapplicable to health maintenance organizations or limited health
1304
plans, upon a finding that the waiver will not endanger the interests of:
1305
(a) enrollees;
1306
(b) investors; or
1307
(c) the public.
1308
(3) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, and Title 16,
1309
Chapter 10a, Utah Revised Business Corporation Act, do not apply to an organization except as
1310
specifically made applicable by:
1311
(a) this chapter;
1312
(b) a provision referenced under this chapter; or
1313
(c) a rule adopted by the commissioner to deal with corporate law issues of health
1314
maintenance organizations that are not settled under this chapter.
1315
(4) (a) Whenever in this chapter, Chapter 5, or Chapter 14 is made applicable to an
1316
organization, the application is:
1317
(i) of those provisions that apply to a mutual corporation if the organization is
1318
nonprofit; and
1319
(ii) of those that apply to a stock corporation if the organization is for profit.
1320
(b) When Chapter 5 or 14 is made applicable to an organization under this chapter,
1321
"mutual" means nonprofit organization.
1322
(5) Solicitation of enrollees by an organization is not a violation of any provision of
1323
law relating to solicitation or advertising by health professionals if that solicitation is made in
1324
accordance with:
1325
(a) this chapter; and
1326
(b) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
1327
Reinsurance Intermediaries.
1328
(6) This title does not prohibit any health maintenance organization from meeting the
1329
requirements of any federal law that enables the health maintenance organization to:
1330
(a) receive federal funds; or
1331
(b) obtain or maintain federal qualification status.
1332
(7) Except as provided in Section
31A-8-501
, an organization is exempt from statutes
1333
in this title or department rules that restrict or limit the organization's freedom of choice in
1334
contracting with or selecting health care providers, including Section
31A-22-618
.
1335
(8) An organization is exempt from the assessment or payment of premium taxes
1336
imposed by Sections
59-9-101
through
59-9-104
.
1337
Section 7.
Section
31A-16-103
is amended to read:
1338
31A-16-103. Acquisition of control of or merger with domestic insurer --
1339
Required filings -- Content of statement -- Alternative filing materials -- Criminal
1340
background information -- Approval by commissioner -- Dissenting shareholders --
1341
Violations -- Jurisdiction, consent to service of process.
1342
(1) (a) A person may not take the actions described in Subsections (1)(b) or (c) unless,
1343
at the time any offer, request, or invitation is made or any such agreement is entered into, or
1344
prior to the acquisition of securities if no offer or agreement is involved:
1345
(i) the person files with the commissioner a statement containing the information
1346
required by this section;
1347
(ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
1348
insurer; and
1349
(iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
1350
(b) Unless the person complies with Subsection (1)(a), a person other than the issuer
1351
may not make a tender offer for, a request or invitation for tenders of, or enter into any
1352
agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
1353
any voting security of a domestic insurer if after the acquisition, the person would directly,
1354
indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
1355
(c) Unless the person complies with Subsection (1)(a), a person may not enter into an
1356
agreement to merge with or otherwise to acquire control of:
1357
(i) a domestic insurer; or
1358
(ii) any person controlling a domestic insurer.
1359
(d) (i) For purposes of this section, a domestic insurer includes any person controlling a
1360
domestic insurer unless the person as determined by the commissioner is either directly or
1361
through its affiliates primarily engaged in business other than the business of insurance.
1362
(ii) The controlling person described in Subsection (1)(d)(i) shall file with the
1363
commissioner a preacquisition notification containing the information required in Subsection
1364
(2) 30 calendar days before the proposed effective date of the acquisition.
1365
(iii) For the purposes of this section, "person" does not include any securities broker
1366
[holding] that in the usual and customary brokers function holds less than 20% of:
1367
(A) the voting securities of an insurance company; or [of]
1368
(B) any person that controls an insurance company [in the usual and customary brokers
1369
function].
1370
(iv) This section applies to all domestic insurers and other entities licensed under
1371
Chapters 5, 7, 8, 9, and 11.
1372
(e) (i) An agreement for acquisition of control or merger as contemplated by this
1373
Subsection (1) is not valid or enforceable unless the agreement:
1374
(A) is in writing; and
1375
(B) includes a provision that the agreement is subject to the approval of the
1376
commissioner upon the filing of any applicable statement required under this chapter.
1377
(ii) A written agreement for acquisition or control that includes the provision described
1378
in Subsection (1)(e)(i) satisfies the requirements of this Subsection (1).
1379
(2) The statement to be filed with the commissioner under Subsection (1) shall be
1380
made under oath or affirmation and shall contain the following information:
1381
(a) the name and address of the "acquiring party," which means each person by whom
1382
or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
1383
be effected; and
1384
(i) if the person is an individual:
1385
(A) the person's principal occupation;
1386
(B) a listing of all offices and positions held by the person during the past five years;
1387
and
1388
(C) any conviction of crimes other than minor traffic violations during the past ten
1389
years; and
1390
(ii) if the person is not an individual:
1391
(A) a report of the nature of its business operations during:
1392
(I) the past five years; or
1393
(II) for any lesser period as the person and any of its predecessors has been in
1394
existence;
1395
(B) an informative description of the business intended to be done by the person and
1396
the person's subsidiaries;
1397
(C) a list of all individuals who are or who have been selected to become directors or
1398
executive officers of the person, or individuals who perform, or who will perform functions
1399
appropriate to such positions; and
1400
(D) for each individual described in Subsection (2)(a)(ii)(C), the information required
1401
by Subsection (2)(a)(i)[(A)] for each individual;
1402
(b) (i) the source, nature, and amount of the consideration used or to be used in
1403
effecting the merger or acquisition of control;
1404
(ii) a description of any transaction in which funds were or are to be obtained for [that]
1405
the purpose of effecting the merger or acquisition of control, including any pledge of:
1406
(A) the insurer's stock; or
1407
(B) the stock of any of [its] the insurer's subsidiaries or controlling affiliates; and
1408
(iii) the identity of persons furnishing the consideration;
1409
(c) (i) fully audited financial information, or other financial information considered
1410
acceptable by the commissioner, of the earnings and financial condition of each acquiring party
1411
for:
1412
(A) the preceding five fiscal years of each acquiring party[,]; or [for]
1413
(B) any lesser period the acquiring party and any of its predecessors shall have been in
1414
existence[,]; and [similar]
1415
(ii) unaudited information:
1416
(A) similar to the information described in Subsection (2)(c)(i); and
1417
(B) prepared within the 90 days prior to the filing of the statement;
1418
(d) any plans or proposals which each acquiring party may have to:
1419
(i) liquidate the insurer;
1420
(ii) sell its assets;
1421
(iii) merge or consolidate the insurer with any person; or
1422
(iv) make any other material change in the insurer's:
1423
(A) business[,];
1424
(B) corporate structure[,]; or
1425
(C) management;
1426
(e) (i) the number of shares of any security referred to in Subsection (1) that each
1427
acquiring party proposes to acquire;
1428
(ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
1429
Subsection (1); and
1430
(iii) a statement as to the method by which the fairness of the proposal was arrived at;
1431
(f) the amount of each class of any security referred to in Subsection (1) that:
1432
(i) is beneficially owned; or
1433
(ii) concerning which there is a right to acquire beneficial ownership by each acquiring
1434
party;
1435
(g) a full description of any contract, arrangement, or understanding with respect to any
1436
security referred to in Subsection (1) in which any acquiring party is involved, including:
1437
(i) the transfer of any of the securities;
1438
(ii) joint ventures;
1439
(iii) loan or option arrangements;
1440
(iv) puts or calls;
1441
(v) guarantees of loans;
1442
(vi) guarantees against loss or guarantees of profits;
1443
(vii) division of losses or profits; or
1444
(viii) the giving or withholding of proxies;
1445
(h) a description of the purchase by any acquiring party of any security referred to in
1446
Subsection (1) during the 12 calendar months preceding the filing of the statement including:
1447
(i) the dates of purchase;
1448
(ii) the names of the purchasers; and
1449
(iii) the consideration paid or agreed to be paid for the purchase;
1450
(i) a description of:
1451
(i) any recommendations to purchase by any acquiring party any security referred to in
1452
Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
1453
(ii) any recommendations made by anyone based upon interviews or at the suggestion
1454
of the acquiring party;
1455
(j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
1456
offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
1457
and
1458
(ii) if distributed, copies of additional soliciting material relating to the transactions
1459
described in Subsection (2)(j)(i);
1460
(k) (i) the term of any agreement, contract, or understanding made with, or proposed to
1461
be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
1462
tender; and
1463
(ii) the amount of any fees, commissions, or other compensation to be paid to
1464
broker-dealers with regard to any agreement, contract, or understanding described in
1465
Subsection (2)(k)(i); and
1466
(l) any additional information the commissioner requires by rule, which the
1467
commissioner determines to be:
1468
(i) necessary or appropriate for the protection of policyholders of the insurer; or
1469
(ii) in the public interest.
1470
(3) The department may request:
1471
(a) (i) criminal background information maintained pursuant to Title 53, Chapter 10,
1472
Part 2, from the Bureau of Criminal Identification; and
1473
(ii) complete Federal Bureau of Investigation criminal background checks through the
1474
national criminal history system.
1475
(b) Information obtained by the department from the review of criminal history records
1476
received under Subsection (3)(a) shall be used by the department for the purpose of:
1477
(i) verifying the information in Subsection (2)(a)(i);
1478
(ii) determining the integrity of persons who would control the operation of an insurer;
1479
and
1480
(iii) preventing persons who violate 18 U.S.C. Sections 1033 and 1034 from engaging
1481
in the business of insurance in the state.
1482
(c) If the department requests the criminal background information, the department
1483
shall:
1484
(i) pay to the Department of Public Safety the costs incurred by the Department of
1485
Public Safety in providing the department criminal background information under Subsection
1486
(3)(a)(i);
1487
(ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
1488
of Investigation in providing the department criminal background information under
1489
Subsection (3)(a)(ii); and
1490
(iii) charge the person required to file the statement referred to in Subsection (1) a fee
1491
equal to the aggregate of Subsections (3)(c)(i) and (ii).
1492
(4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
1493
the lender's ordinary course of business, the identity of the lender shall remain confidential, if
1494
the person filing the statement so requests.
1495
(b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
1496
adjusted book value assigned by the acquiring party to each security in arriving at the terms of
1497
the offer[, with].
1498
(ii) For purposes of this Subsection (4)(b), "adjusted book value" [meaning] means
1499
each security's proportional interest in the capital and surplus of the insurer with adjustments
1500
that reflect:
1501
[(i)] (A) market conditions;
1502
[(ii)] (B) business in force; and
1503
[(iii)] (C) other intangible assets or liabilities of the insurer.
1504
(c) The description required by Subsection (2)(g) shall identify the persons with whom
1505
the contracts, arrangements, or understandings have been entered into.
1506
(5) (a) If the person required to file the statement referred to in Subsection (1) is a
1507
partnership, limited partnership, syndicate, or other group, the commissioner may require that
1508
all the information called for by Subsections (2), (3), or (4) shall be given with respect to each:
1509
(i) partner of the partnership or limited partnership;
1510
(ii) member of the syndicate or group; and
1511
(iii) person who controls the partner or member.
1512
(b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
1513
or if the person required to file the statement referred to in Subsection (1) is a corporation, the
1514
commissioner may require that the information called for by Subsection (2) shall be given with
1515
respect to:
1516
(i) the corporation;
1517
(ii) each officer and director of the corporation; and
1518
(iii) each person who is directly or indirectly the beneficial owner of more than 10% of
1519
the outstanding voting securities of the corporation.
1520
(6) If any material change occurs in the facts set forth in the statement filed with the
1521
commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
1522
the change, together with copies of all documents and other material relevant to the change,
1523
shall be filed with the commissioner and sent to the insurer within two business days after the
1524
filing person learns of such change.
1525
(7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
1526
(1) is proposed to be made by means of a registration statement under the Securities Act of
1527
1933, or under circumstances requiring the disclosure of similar information under the
1528
Securities Exchange Act of 1934, or under a state law requiring similar registration or
1529
disclosure, a person required to file the statement referred to in Subsection (1) may use copies
1530
of any registration or disclosure documents in furnishing the information called for by the
1531
statement.
1532
(8) (a) The commissioner shall approve any merger or other acquisition of control
1533
referred to in Subsection (1) unless, after a public hearing on the merger or acquisition, the
1534
commissioner finds that:
1535
(i) after the change of control, the domestic insurer referred to in Subsection (1) would
1536
not be able to satisfy the requirements for the issuance of a license to write the line or lines of
1537
insurance for which it is presently licensed;
1538
(ii) the effect of the merger or other acquisition of control would:
1539
(A) substantially lessen competition in insurance in this state; or
1540
(B) tend to create a monopoly in insurance;
1541
(iii) the financial condition of any acquiring party might:
1542
(A) jeopardize the financial stability of the insurer; or
1543
(B) prejudice the interest of:
1544
(I) its policyholders; or
1545
(II) any remaining securityholders who are unaffiliated with the acquiring party;
1546
(iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
1547
Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
1548
(v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
1549
assets, or consolidate or merge it with any person, or to make any other material change in its
1550
business or corporate structure or management, are:
1551
(A) unfair and unreasonable to policyholders of the insurer; and
1552
(B) not in the public interest; or
1553
(vi) the competence, experience, and integrity of those persons who would control the
1554
operation of the insurer are such that it would not be in the interest of the policyholders of the
1555
insurer and the public to permit the merger or other acquisition of control.
1556
(b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
1557
be considered unfair if the adjusted book values under Subsection (2)(e):
1558
(i) are disclosed to the securityholders; and
1559
(ii) determined by the commissioner to be reasonable.
1560
(9) (a) The public hearing referred to in Subsection (8) shall be held within 30 days
1561
after the statement required by Subsection (1) is filed.
1562
(b) (i) At least 20 days notice of the hearing shall be given by the commissioner to the
1563
person filing the statement.
1564
(ii) Affected parties may waive the notice required by this Subsection (9)(b).
1565
(iii) Not less than seven days notice of the public hearing shall be given by the person
1566
filing the statement to:
1567
(A) the insurer; and
1568
(B) any person designated by the commissioner.
1569
(c) The commissioner shall make a determination within 30 days after the conclusion
1570
of the hearing.
1571
(d) At the hearing, the person filing the statement, the insurer, any person to whom
1572
notice of hearing was sent, and any other person whose interest may be affected by the hearing
1573
may:
1574
(i) present evidence;
1575
&n