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S.B. 55 Enrolled
GOVERNMENTAL IMMUNITY ACT OF UTAH
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: Leonard M. Blackham
LONG TITLE
General Description:
This bill enacts a new governmental immunity act.
Highlighted Provisions:
This bill:
. defines the scope of liability and immunity of Utah's state and local governments and
their employees;
. defines terms;
. establishes immunity from suit for injuries that result from the exercise of a
government function;
. waives government immunity from suit for certain specific governmental functions
and provides exceptions to certain of those waivers;
. establishes procedures for making claims against a government entity or employee
when an alleged injury has occurred;
. establishes jurisdiction and venue requirements for actions against government
entities and employees;
. defines certain procedures and requirements for legal actions brought under this
chapter;
. establishes a process for submitting claims for payment to a government entity and
authorizes certain options that government entities may use to pay claims;
. authorizes government entities to self-insure or purchase liability insurance for
potential claims against the entity and establishes procedures and requirements for
implementing those options;
. establishes limits on judgments against government entities or employees;
. addresses legal representation and settlement authority for claims against executive,
legislative, and judicial entities and employees;
. establishes a process for defending employees generally when claims are asserted
against them and defines the scope of that representation; and
. makes technical corrections.
Monies Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a transition clause.
This bill takes effect on July 1, 2004.
This bill provides a coordination clause enacting Section
63-30d-203
, if S.B. 9 passes and
certain conditions are met.
This bill provides a coordination clause amending Section 63-30d-401, if H.B. 111 passes.
Utah Code Sections Affected:
AMENDS:
7-2-9, as last amended by Chapter 177, Laws of Utah 1990
17-50-401, as enacted by Chapter 133, Laws of Utah 2000
17A-2-1830, as enacted by Chapter 216, Laws of Utah 1995
31A-1-301, as last amended by Chapters 131 and 298, Laws of Utah 2003
31A-2-306, as last amended by Chapter 161, Laws of Utah 1987
31A-12-107, as last amended by Chapter 71, Laws of Utah 2002
31A-22-305, as last amended by Chapters 76 and 218, Laws of Utah 2003
63-30a-3, as last amended by Chapter 30, Laws of Utah 1987
63-56-59, as last amended by Chapter 178, Laws of Utah 2002
76-6-513, as last amended by Chapter 291, Laws of Utah 1995
78-3a-113 (Superseded 07/01/04), as renumbered and amended by Chapter 365, Laws of
Utah 1997
78-3a-113 (Effective 07/01/04), as last amended by Chapter 171, Laws of Utah 2003
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78-3a-114 (Superseded 07/01/04), as renumbered and amended by Chapter 365, Laws of
Utah 1997
78-3a-114 (Effective 07/01/04), as last amended by Chapter 171, Laws of Utah 2003
78-3a-118 (Superseded 07/01/04), as last amended by Chapters 68, 176, 195 and 278,
Laws of Utah 2003
78-3a-118 (Effective 07/01/04), as last amended by Chapter 171, Laws of Utah 2003
78-17-3, as enacted by Chapter 143, Laws of Utah 1986
78-19-1, as enacted by Chapter 4, Laws of Utah 1990
ENACTS:
63-30d-101, Utah Code Annotated 1953
63-30d-102, Utah Code Annotated 1953
63-30d-201, Utah Code Annotated 1953
63-30d-202, Utah Code Annotated 1953
63-30d-301, Utah Code Annotated 1953
63-30d-302, Utah Code Annotated 1953
63-30d-401, Utah Code Annotated 1953
63-30d-402, Utah Code Annotated 1953
63-30d-403, Utah Code Annotated 1953
63-30d-501, Utah Code Annotated 1953
63-30d-502, Utah Code Annotated 1953
63-30d-601, Utah Code Annotated 1953
63-30d-602, Utah Code Annotated 1953
63-30d-603, Utah Code Annotated 1953
63-30d-604, Utah Code Annotated 1953
63-30d-701, Utah Code Annotated 1953
63-30d-702, Utah Code Annotated 1953
63-30d-703, Utah Code Annotated 1953
63-30d-704, Utah Code Annotated 1953
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63-30d-801, Utah Code Annotated 1953
63-30d-802, Utah Code Annotated 1953
63-30d-803, Utah Code Annotated 1953
63-30d-804, Utah Code Annotated 1953
63-30d-805, Utah Code Annotated 1953
63-30d-901, Utah Code Annotated 1953
63-30d-902, Utah Code Annotated 1953
63-30d-903, Utah Code Annotated 1953
63-30d-904, Utah Code Annotated 1953
REPEALS:
63-30-1, as enacted by Chapter 139, Laws of Utah 1965
63-30-2, as last amended by Chapter 224, Laws of Utah 2000
63-30-3, as last amended by Chapter 3, Laws of Utah 2003
63-30-4, as last amended by Chapter 206, Laws of Utah 2002
63-30-5, as last amended by Chapter 251, Laws of Utah 1991
63-30-6, as enacted by Chapter 139, Laws of Utah 1965
63-30-7, as amended by Statewide Initiative B, Nov. 7, 2000, Laws of Utah 2000
63-30-8, as last amended by Chapter 76, Laws of Utah 1991
63-30-9, as last amended by Chapter 76, Laws of Utah 1991
63-30-10, as last amended by Chapter 185, Laws of Utah 2001
63-30-10.5, as last amended by Chapter 76, Laws of Utah 1991
63-30-10.6, as last amended by Chapter 280, Laws of Utah 1992
63-30-11, as last amended by Chapter 157, Laws of Utah 2000
63-30-12, as last amended by Chapter 164, Laws of Utah 1998
63-30-13, as last amended by Chapter 164, Laws of Utah 1998
63-30-14, as enacted by Chapter 139, Laws of Utah 1965
63-30-15, as last amended by Chapter 75, Laws of Utah 1987
63-30-16, as last amended by Chapter 166, Laws of Utah 1999
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63-30-17, as last amended by Chapter 129, Laws of Utah 1983
63-30-18, as last amended by Chapter 313, Laws of Utah 1995
63-30-19, as enacted by Chapter 139, Laws of Utah 1965
63-30-20, as enacted by Chapter 139, Laws of Utah 1965
63-30-22, as last amended by Chapter 67, Laws of Utah 1991
63-30-23, as last amended by Chapter 75, Laws of Utah 1987
63-30-24, as enacted by Chapter 139, Laws of Utah 1965
63-30-25, as enacted by Chapter 139, Laws of Utah 1965
63-30-26, as last amended by Chapter 129, Laws of Utah 1983
63-30-27, as last amended by Chapter 3, Laws of Utah 1988
63-30-28, as last amended by Chapter 203, Laws of Utah 1991
63-30-29.5, as last amended by Chapter 242, Laws of Utah 1985
63-30-31, as last amended by Chapter 129, Laws of Utah 1983
63-30-32, as last amended by Chapter 129, Laws of Utah 1983
63-30-33, as last amended by Chapter 76, Laws of Utah 1991
63-30-34, as last amended by Chapter 157, Laws of Utah 2000
63-30-35, as last amended by Chapter 97, Laws of Utah 1990
63-30-36, as last amended by Chapter 206, Laws of Utah 2002
63-30-37, as last amended by Chapter 30, Laws of Utah 1987
63-30-38, as enacted by Chapter 131, Laws of Utah 1983
78-60-101, as enacted by Chapter 180, Laws of Utah 2003
78-60-102, as enacted by Chapter 180, Laws of Utah 2003
78-60-103, as enacted by Chapter 180, Laws of Utah 2003
Uncodified Material Affected:
ENACTS UNCODIFIED MATERIAL
Be it enacted by the Legislature of the state of Utah:
Section 1.
Section
7-2-9
is amended to read:
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7-2-9. Conservatorship, receivership, or liquidation of institution -- Appointment
of receiver -- Review of actions.
(1) Upon taking possession of the institution, the commissioner may appoint a receiver to
perform the duties of the commissioner. Subject to any limitations, conditions, or requirements
specified by the commissioner and approved by the court, a receiver shall have all the powers and
duties of the commissioner under this chapter and the laws of this state to act as a conservator,
receiver, or liquidator of the institution. Actions of the commissioner in appointing a receiver
shall be subject to review only as provided in Section
7-2-2
.
(2) (a) If the deposits of the institution are to any extent insured by a federal deposit
insurance agency, the commissioner may appoint that agency as receiver. After receiving notice
in writing of the acceptance of the appointment, the commissioner shall file a certificate of
appointment in his office and with the clerk of the district court. After the filing of the certificate,
the possession of all assets, business, and property of the institution is considered transferred from
the institution and the commissioner to the agency, and title to all assets, business, and property of
the institution is vested in the agency without the execution of any instruments of conveyance,
assignment, transfer, or endorsement.
(b) If a federal deposit insurance agency accepts an appointment as receiver, it has all the
powers and privileges provided by the laws of this state and the United States with respect to the
conservatorship, receivership, or liquidation of an institution and the rights of its depositors, and
other creditors, including authority to make an agreement for the purchase of assets and
assumption of deposit and other liabilities by another depository institution or take other action
authorized by Title 12 of the United States Code to maintain the stability of the banking system.
Such action by a federal deposit insurance agency may be taken upon approval by the court, with
or without prior notice. Such actions or agreements may be disapproved, amended, or rescinded
only upon a finding by the court that the decisions or actions of the receiver are arbitrary,
capricious, fraudulent, or contrary to law. In the event of any conflict between state and federal
law, including provisions for adjudicating claims against the institution or receiver, the receiver
shall comply with the federal law and any resulting violation of state law shall not by itself
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constitute grounds for the court to disapprove the actions of the receiver or impose any penalty
for such violation.
(c) The commissioner or any receiver appointed by him shall possess all the rights and
claims of the institution against any person whose breach of fiduciary duty or violations of the
laws of this state or the United States applicable to depository institutions may have caused or
contributed to a condition which resulted in any loss incurred by the institution or to its assets in
the possession of the commissioner or receiver. As used in this Subsection (2)(c), fiduciary duty
includes those duties and standards applicable under statutes and laws of this state and the United
States to a director, officer, or other party employed by or rendering professional services to a
depository institution whose deposits are insured by a federal deposit insurance agency. Upon
taking possession of an institution, no person other than the commissioner or receiver shall have
standing to assert any such right or claim of the institution, including its depositors, creditors, or
shareholders unless the right or claim has been abandoned by the commissioner or receiver with
approval of the court. Any judgment based on the rights and claims of the commissioner or
receiver shall have priority in payment from the assets of the judgment debtors.
(d) For the purposes of this section, the term "federal deposit insurance agency" shall
include the Federal Deposit Insurance Corporation, the National Credit Union Administration and
any departments thereof or successors thereto, and any other federal agency authorized by federal
law to act as a conservator, receiver, and liquidator of a federally insured depository institution,
including the Resolution Trust Corporation and any department thereof or successor thereto.
(3) The receiver may employ assistants, agents, accountants, and legal counsel. If the
receiver is not a federal deposit insurance agency, the compensation to be paid such assistants,
agents, accountants, and legal counsel shall be approved by the commissioner. All expenses
incident to the receivership shall be paid out of the assets of the institution. If a receiver is not a
federal deposit insurance agency, the receiver and any assistants and agents shall provide bond or
other security specified by the commissioner and approved by the court for the faithful discharge
of all duties and responsibilities in connection with the receivership including the accounting for
money received and paid. The cost of the bond shall be paid from the assets of the institution.
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Suit may be maintained on the bond by the commissioner or by any person injured by a breach of
the condition of the bond.
(4) (a) Upon the appointment of a receiver for an institution in possession pursuant to this
chapter, the commissioner and the department are exempt from liability or damages for any act or
omission of any receiver appointed pursuant to this section.
(b) This section does not limit the right of the commissioner to prescribe and enforce
rules regulating a receiver in carrying out its duties with respect to an institution subject to the
jurisdiction of the department.
(c) Any act or omission of the commissioner or of any federal deposit insurance agency as
a receiver appointed by him while acting pursuant to this chapter shall be deemed to be the
exercise of a discretionary function within the meaning of Section [
63-30-10
]
63-30d-301
of the
laws of this state or Section 28 U.S.C. 2680(a) of the laws of the United States.
(5) Actions, decisions, or agreements of a receiver under this chapter, other than
allowance or disallowance of claims under Section
7-2-6
, shall be subject to judicial review only
as follows:
(a) A petition for review shall be filed with the court having jurisdiction under Section
7-2-2
not more than 90 days after the date the act, decision, or agreement became effective or its
terms are filed with the court.
(b) The petition shall state in simple, concise, and direct terms the facts and principles of
law upon which the petitioner claims the act, decision, or agreement of the receiver was or would
be arbitrary, capricious, fraudulent, or contrary to law and how the petitioner is or may be
damaged thereby. The court shall dismiss any petition which fails to allege that the petitioner
would be directly injured or damaged by the act, decision, or agreement which is the subject of
the petition. Rule 11 of the Utah Rules of Civil Procedure shall apply to all parties with respect to
the allegations set forth in a petition or response.
(c) The receiver shall have 30 days after service of the petition within which to respond.
(d) All further proceedings are to be conducted in accordance with the Utah Rules of
Civil Procedure.
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(6) All notices required under this section shall be made in accordance with the Utah
Rules of Civil Procedure and served upon the attorney general of the state of Utah, the
commissioner of financial institutions, the receiver of the institution appointed under this chapter,
and upon the designated representative of any party in interest who requests in writing such
notice.
Section 2.
Section
17-50-401
is amended to read:
17-50-401. Review of claims by county executive -- Auditor review -- Attorney
review -- Claim requirements -- Approval or disapproval of claim.
(1) Subject to Subsection (3), each county executive shall review each claim against the
county and disapprove or, if payment appears to the county executive to be just, lawful, and
properly due and owing, approve the claim.
(2) Upon receiving a notice of claim under Section [
63-30-11
]
63-30d-401
, the county
clerk shall deliver the notice of claim to the county executive.
(3) (a) The county executive shall forward all claims regarding liability to the county
attorney, or, in a county that has a district attorney but not a county attorney, to the district
attorney for the attorney's review and recommendation to the county executive regarding liability
and payment.
(b) Except as provided in Section
17-50-405
, the county executive shall forward all
claims requesting payment for goods or services to the county auditor for the auditor's review and
recommendation to the county executive.
(4) Each claim for goods or services against a county shall:
(a) itemize the claim, giving applicable names, dates, and particular goods provided or
services rendered;
(b) if the claim is for service of process, state the character of process served, upon whom
served, the number of days engaged, and the number of miles traveled;
(c) be duly substantiated as to its correctness and as to the fact that it is justly due;
(d) if the claim is for materials furnished, state to whom the materials were furnished, by
whom ordered, and the quantity and price agreed upon; and
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(e) be presented to the county executive within a year after the last item of the account or
credit accrued.
(5) If the county executive refuses to hear or consider a claim because it is not properly
made out, the county executive shall cause notice of the refusal to be given to the claimant or the
claimant's agent and shall allow a reasonable amount of time for the claim to be properly itemized
and substantiated.
(6) Nothing in this section may be construed to modify the requirements of Section
[
63-30-11
]
63-30d-401
.
Section 3.
Section
17A-2-1830
is amended to read:
17A-2-1830. Limitation of liability.
(1) The members of the board of trustees, or any person acting in behalf of the board,
while acting within the scope of their authority, are not subject to any personal liability resulting
from carrying out any of the powers of this part.
(2) The provisions of Section [
63-30-36
]
63-30d-902
shall apply to members of the board
of trustees, officers, employees, authorized volunteers, and agents of the regional service area in
connection with any claims, demands, suits, actions, or proceedings that may be made or brought
against any of them arising out of any determination made or actions taken or omitted to be taken
in compliance with any obligations under the terms of this part.
(3) The regional service area or any member of the board of trustees, officer, employee,
authorized volunteer, or its agent is not liable to any person, for personal injury or property
damage or otherwise, arising from the operation of facilities for sports competitions by any person
or organization other than the regional service area. Nothing contained in this Subsection (3)
shall relieve the regional service area or any person from liability or responsibility for its or their
own contracts, conduct, or omissions.
Section 4.
Section
31A-1-301
is amended to read:
31A-1-301. Definitions.
As used in this title, unless otherwise specified:
(1) (a) "Accident and health insurance" means insurance to provide protection against
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economic losses resulting from:
(i) a medical condition including:
(A) medical care expenses; or
(B) the risk of disability;
(ii) accident; or
(iii) sickness.
(b) "Accident and health insurance":
(i) includes a contract with disability contingencies including:
(A) an income replacement contract;
(B) a health care contract;
(C) an expense reimbursement contract;
(D) a credit accident and health contract;
(E) a continuing care contract; and
(F) long-term care contracts; and
(ii) may provide:
(A) hospital coverage;
(B) surgical coverage;
(C) medical coverage; or
(D) loss of income coverage.
(c) "Accident and health insurance" does not include workers' compensation insurance.
(2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
63, Chapter 46a, Utah Administrative Rulemaking Act.
(3) "Administrator" is defined in Subsection (149).
(4) "Adult" means a natural person who has attained the age of at least 18 years.
(5) "Affiliate" means any person who controls, is controlled by, or is under common
control with, another person. A corporation is an affiliate of another corporation, regardless of
ownership, if substantially the same group of natural persons manages the corporations.
(6) "Agency" means:
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(a) a person other than an individual, including a sole proprietorship by which a natural
person does business under an assumed name; and
(b) an insurance organization licensed or required to be licensed under Section
31A-23a-301
.
(7) "Alien insurer" means an insurer domiciled outside the United States.
(8) "Amendment" means an endorsement to an insurance policy or certificate.
(9) "Annuity" means an agreement to make periodical payments for a period certain or
over the lifetime of one or more natural persons if the making or continuance of all or some of the
series of the payments, or the amount of the payment, is dependent upon the continuance of
human life.
(10) "Application" means a document:
(a) completed by an applicant to provide information about the risk to be insured; and
(b) that contains information that is used by the insurer to:
(i) evaluate risk; and
(ii) decide whether to:
(A) insure the risk under:
(I) the coverages as originally offered; or
(II) a modification of the coverage as originally offered; or
(B) decline to insure the risk.
(11) "Articles" or "articles of incorporation" means the original articles, special laws,
charters, amendments, restated articles, articles of merger or consolidation, trust instruments, and
other constitutive documents for trusts and other entities that are not corporations, and
amendments to any of these.
(12) "Bail bond insurance" means a guarantee that a person will attend court when
required, or will obey the orders or judgment of the court, as a condition to the release of that
person from confinement.
(13) "Binder" is defined in Section
31A-21-102
.
(14) "Board," "board of trustees," or "board of directors" means the group of persons
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with responsibility over, or management of, a corporation, however designated.
(15) "Business entity" means a corporation, association, partnership, limited liability
company, limited liability partnership, or other legal entity.
(16) "Business of insurance" is defined in Subsection (80).
(17) "Business plan" means the information required to be supplied to the commissioner
under Subsections
31A-5-204
(2)(i) and (j), including the information required when these
subsections are applicable by reference under:
(a) Section
31A-7-201
;
(b) Section
31A-8-205
; or
(c) Subsection
31A-9-205
(2).
(18) "Bylaws" means the rules adopted for the regulation or management of a
corporation's affairs, however designated and includes comparable rules for trusts and other
entities that are not corporations.
(19) "Captive insurance company" means:
(a) an insurance company:
(i) owned by another organization; and
(ii) whose exclusive purpose is to insure risks of the parent organization and affiliated
companies; or
(b) in the case of groups and associations, an insurance organization:
(i) owned by the insureds; and
(ii) whose exclusive purpose is to insure risks of:
(A) member organizations;
(B) group members; and
(C) affiliates of:
(I) member organizations; or
(II) group members.
(20) "Casualty insurance" means liability insurance as defined in Subsection (90).
(21) "Certificate" means evidence of insurance given to:
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(a) an insured under a group insurance policy; or
(b) a third party.
(22) "Certificate of authority" is included within the term "license."
(23) "Claim," unless the context otherwise requires, means a request or demand on an
insurer for payment of benefits according to the terms of an insurance policy.
(24) "Claims-made coverage" means an insurance contract or provision limiting coverage
under a policy insuring against legal liability to claims that are first made against the insured while
the policy is in force.
(25) (a) "Commissioner" or "commissioner of insurance" means Utah's insurance
commissioner.
(b) When appropriate, the terms listed in Subsection (25)(a) apply to the equivalent
supervisory official of another jurisdiction.
(26) (a) "Continuing care insurance" means insurance that:
(i) provides board and lodging;
(ii) provides one or more of the following services:
(A) personal services;
(B) nursing services;
(C) medical services; or
(D) other health-related services; and
(iii) provides the coverage described in Subsection (26)(a)(i) under an agreement
effective:
(A) for the life of the insured; or
(B) for a period in excess of one year.
(b) Insurance is continuing care insurance regardless of whether or not the board and
lodging are provided at the same location as the services described in Subsection (26)(a)(ii).
(27) (a) "Control," "controlling," "controlled," or "under common control" means the
direct or indirect possession of the power to direct or cause the direction of the management and
policies of a person. This control may be:
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(i) by contract;
(ii) by common management;
(iii) through the ownership of voting securities; or
(iv) by a means other than those described in Subsections (27)(a)(i) through (iii).
(b) There is no presumption that an individual holding an official position with another
person controls that person solely by reason of the position.
(c) A person having a contract or arrangement giving control is considered to have
control despite the illegality or invalidity of the contract or arrangement.
(d) There is a rebuttable presumption of control in a person who directly or indirectly
owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the voting
securities of another person.
(28) "Controlled insurer" means a licensed insurer that is either directly or indirectly
controlled by a producer.
(29) "Controlling person" means any person, firm, association, or corporation that
directly or indirectly has the power to direct or cause to be directed, the management, control, or
activities of a reinsurance intermediary.
(30) "Controlling producer" means a producer who directly or indirectly controls an
insurer.
(31) (a) "Corporation" means insurance corporation, except when referring to:
(i) a corporation doing business as an insurance producer, limited line producer,
consultant, managing general agent, reinsurance intermediary, third party administrator, or
adjuster under:
(A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
Reinsurance Intermediaries;
(B) Chapter 25, Third Party Administrators; and
(C) Chapter 26, Insurance Adjusters; or
(ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
Holding Companies.
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(b) "Stock corporation" means stock insurance corporation.
(c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
(32) "Credit accident and health insurance" means insurance on a debtor to provide
indemnity for payments coming due on a specific loan or other credit transaction while the debtor
is disabled.
(33) (a) "Credit insurance" means insurance offered in connection with an extension of
credit that is limited to partially or wholly extinguishing that credit obligation.
(b) "Credit insurance" includes:
(i) credit accident and health insurance;
(ii) credit life insurance;
(iii) credit property insurance;
(iv) credit unemployment insurance;
(v) guaranteed automobile protection insurance;
(vi) involuntary unemployment insurance;
(vii) mortgage accident and health insurance;
(viii) mortgage guaranty insurance; and
(ix) mortgage life insurance.
(34) "Credit life insurance" means insurance on the life of a debtor in connection with an
extension of credit that pays a person if the debtor dies.
(35) "Credit property insurance" means insurance:
(a) offered in connection with an extension of credit; and
(b) that protects the property until the debt is paid.
(36) "Credit unemployment insurance" means insurance:
(a) offered in connection with an extension of credit; and
(b) that provides indemnity if the debtor is unemployed for payments coming due on a:
(i) specific loan; or
(ii) credit transaction.
(37) "Creditable coverage" is as defined in 45 C.F.R. 146.113(a).
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(38) "Creditor" means a person, including an insured, having any claim, whether:
(a) matured;
(b) unmatured;
(c) liquidated;
(d) unliquidated;
(e) secured;
(f) unsecured;
(g) absolute;
(h) fixed; or
(i) contingent.
(39) (a) "Customer service representative" means a person that provides insurance
services and insurance product information:
(i) for the customer service representative's producer or consultant employer; and
(ii) to the customer service representative's employer's customer, client, or organization.
(b) A customer service representative may only operate within the scope of authority of
the customer service representative's producer or consultant employer.
(40) "Deadline" means the final date or time:
(a) imposed by:
(i) statute;
(ii) rule; or
(iii) order; and
(b) by which a required filing or payment must be received by the department.
(41) "Deemer clause" means a provision under this title under which upon the occurrence
of a condition precedent, the commissioner is deemed to have taken a specific action. If the
statute so provides, the condition precedent may be the commissioner's failure to take a specific
action.
(42) "Degree of relationship" means the number of steps between two persons determined
by counting the generations separating one person from a common ancestor and then counting the
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generations to the other person.
(43) "Department" means the Insurance Department.
(44) "Director" means a member of the board of directors of a corporation.
(45) "Disability" means a physiological or psychological condition that partially or totally
limits an individual's ability to:
(a) perform the duties of:
(i) that individual's occupation; or
(ii) any occupation for which the individual is reasonably suited by education, training, or
experience; or
(b) perform two or more of the following basic activities of daily living:
(i) eating;
(ii) toileting;
(iii) transferring;
(iv) bathing; or
(v) dressing.
(46) "Disability income insurance" is defined in Subsection (71).
(47) "Domestic insurer" means an insurer organized under the laws of this state.
(48) "Domiciliary state" means the state in which an insurer:
(a) is incorporated;
(b) is organized; or
(c) in the case of an alien insurer, enters into the United States.
(49) (a) "Eligible employee" means:
(i) an employee who:
(A) works on a full-time basis; and
(B) has a normal work week of 30 or more hours; or
(ii) a person described in Subsection (49)(b).
(b) "Eligible employee" includes, if the individual is included under a health benefit plan of
a small employer:
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(i) a sole proprietor;
(ii) a partner in a partnership; or
(iii) an independent contractor.
(c) "Eligible employee" does not include, unless eligible under Subsection (49)(b):
(i) an individual who works on a temporary or substitute basis for a small employer;
(ii) an employer's spouse; or
(iii) a dependent of an employer.
(50) "Employee" means any individual employed by an employer.
(51) "Employee benefits" means one or more benefits or services provided to:
(a) employees; or
(b) dependents of employees.
(52) (a) "Employee welfare fund" means a fund:
(i) established or maintained, whether directly or through trustees, by:
(A) one or more employers;
(B) one or more labor organizations; or
(C) a combination of employers and labor organizations; and
(ii) that provides employee benefits paid or contracted to be paid, other than income from
investments of the fund, by or on behalf of an employer doing business in this state or for the
benefit of any person employed in this state.
(b) "Employee welfare fund" includes a plan funded or subsidized by user fees or tax
revenues.
(53) "Endorsement" means a written agreement attached to a policy or certificate to
modify one or more of the provisions of the policy or certificate.
(54) (a) "Escrow" means:
(i) a real estate settlement or real estate closing conducted by a third party pursuant to the
requirements of a written agreement between the parties in a real estate transaction; or
(ii) a settlement or closing involving:
(A) a mobile home;
- 19 -
(B) a grazing right;
(C) a water right; or
(D) other personal property authorized by the commissioner.
(b) "Escrow" includes the act of conducting a:
(i) real estate settlement; or
(ii) real estate closing.
(55) "Excludes" is not exhaustive and does not mean that other things are not also
excluded. The items listed are representative examples for use in interpretation of this title.
(56) "Expense reimbursement insurance" means insurance:
(a) written to provide payments for expenses relating to hospital confinements resulting
from illness or injury; and
(b) written:
(i) as a daily limit for a specific number of days in a hospital; and
(ii) to have a one or two day waiting period following a hospitalization.
(57) "Fidelity insurance" means insurance guaranteeing the fidelity of persons holding
positions of public or private trust.
(58) (a) "Filed" means that a filing is:
(i) submitted to the department as required by and in accordance with any applicable
statute, rule, or filing order;
(ii) received by the department within the time period provided in the applicable statute,
rule, or filing order; and
(iii) accompanied by the appropriate fee in accordance with:
(A) Section
31A-3-103
; or
(B) rule.
(b) "Filed" does not include a filing that is rejected by the department because it is not
submitted in accordance with Subsection (58)(a).
(59) "Filing," when used as a noun, means an item required to be filed with the
department including:
- 20 -
(a) a policy;
(b) a rate;
(c) a form;
(d) a document;
(e) a plan;
(f) a manual;
(g) an application;
(h) a report;
(i) a certificate;
(j) an endorsement;
(k) an actuarial certification;
(l) a licensee annual statement;
(m) a licensee renewal application; or
(n) an advertisement.
(60) "First party insurance" means an insurance policy or contract in which the insurer
agrees to pay claims submitted to it by the insured for the insured's losses.
(61) "Foreign insurer" means an insurer domiciled outside of this state, including an alien
insurer.
(62) (a) "Form" means one of the following prepared for general use:
(i) a policy;
(ii) a certificate;
(iii) an application; or
(iv) an outline of coverage.
(b) "Form" does not include a document specially prepared for use in an individual case.
(63) "Franchise insurance" means individual insurance policies provided through a mass
marketing arrangement involving a defined class of persons related in some way other than
through the purchase of insurance.
(64) "General lines of authority" include:
- 21 -
(a) the general lines of insurance in Subsection (65);
(b) title insurance under one of the following sublines of authority:
(i) search, including authority to act as a title marketing representative;
(ii) escrow, including authority to act as a title marketing representative;
(iii) search and escrow, including authority to act as a title marketing representative; and
(iv) title marketing representative only;
(c) surplus lines;
(d) workers' compensation; and
(e) any other line of insurance that the commissioner considers necessary to recognize in
the public interest.
(65) "General lines of insurance" include:
(a) accident and health;
(b) casualty;
(c) life;
(d) personal lines;
(e) property; and
(f) variable contracts, including variable life and annuity.
(66) "Group health plan" means an employee welfare benefit plan to the extent that the
plan provides medical care:
(a) (i) to employees; or
(ii) to a dependent of an employee; and
(b) (i) directly;
(ii) through insurance reimbursement; or
(iii) through any other method.
(67) "Guaranteed automobile protection insurance" means insurance offered in
connection with an extension of credit that pays the difference in amount between the insurance
settlement and the balance of the loan if the insured automobile is a total loss.
(68) "Health benefit plan" means a policy or certificate for health care insurance, except
- 22 -
that health benefit plan does not include coverage:
(a) solely for:
(i) accident;
(ii) dental;
(iii) vision;
(iv) Medicare supplement;
(v) long-term care; or
(vi) income replacement; or
(b) that is:
(i) offered and marketed as supplemental health insurance;
(ii) not offered or marketed as a substitute for:
(A) hospital or medical expense insurance; or
(B) major medical expense insurance; and
(iii) solely for:
(A) a specified disease;
(B) hospital confinement indemnity; or
(C) limited benefit plan.
(69) "Health care" means any of the following intended for use in the diagnosis,
treatment, mitigation, or prevention of a human ailment or impairment:
(a) professional services;
(b) personal services;
(c) facilities;
(d) equipment;
(e) devices;
(f) supplies; or
(g) medicine.
(70) (a) "Health care insurance" or "health insurance" means insurance providing:
(i) health care benefits; or
- 23 -
(ii) payment of incurred health care expenses.
(b) "Health care insurance" or "health insurance" does not include accident and health
insurance providing benefits for:
(i) replacement of income;
(ii) short-term accident;
(iii) fixed indemnity;
(iv) credit accident and health;
(v) supplements to liability;
(vi) workers' compensation;
(vii) automobile medical payment;
(viii) no-fault automobile;
(ix) equivalent self-insurance; or
(x) any type of accident and health insurance coverage that is a part of or attached to
another type of policy.
(71) "Income replacement insurance" or "disability income insurance" means insurance
written to provide payments to replace income lost from accident or sickness.
(72) "Indemnity" means the payment of an amount to offset all or part of an insured loss.
(73) "Independent adjuster" means an insurance adjuster required to be licensed under
Section
31A-26-201
who engages in insurance adjusting as a representative of insurers.
(74) "Independently procured insurance" means insurance procured under Section
31A-15-104
.
(75) "Individual" means a natural person.
(76) "Inland marine insurance" includes insurance covering:
(a) property in transit on or over land;
(b) property in transit over water by means other than boat or ship;
(c) bailee liability;
(d) fixed transportation property such as bridges, electric transmission systems, radio and
television transmission towers and tunnels; and
- 24 -
(e) personal and commercial property floaters.
(77) "Insolvency" means that:
(a) an insurer is unable to pay its debts or meet its obligations as they mature;
(b) an insurer's total adjusted capital is less than the insurer's mandatory control level
RBC under Subsection
31A-17-601
(8)(c); or
(c) an insurer is determined to be hazardous under this title.
(78) (a) "Insurance" means:
(i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
persons to one or more other persons; or
(ii) an arrangement, contract, or plan for the distribution of a risk or risks among a group
of persons that includes the person seeking to distribute that person's risk.
(b) "Insurance" includes:
(i) risk distributing arrangements providing for compensation or replacement for damages
or loss through the provision of services or benefits in kind;
(ii) contracts of guaranty or suretyship entered into by the guarantor or surety as a
business and not as merely incidental to a business transaction; and
(iii) plans in which the risk does not rest upon the person who makes the arrangements,
but with a class of persons who have agreed to share it.
(79) "Insurance adjuster" means a person who directs the investigation, negotiation, or
settlement of a claim under an insurance policy other than life insurance or an annuity, on behalf
of an insurer, policyholder, or a claimant under an insurance policy.
(80) "Insurance business" or "business of insurance" includes:
(a) providing health care insurance, as defined in Subsection (70), by organizations that
are or should be licensed under this title;
(b) providing benefits to employees in the event of contingencies not within the control of
the employees, in which the employees are entitled to the benefits as a right, which benefits may
be provided either:
(i) by single employers or by multiple employer groups; or
- 25 -
(ii) through trusts, associations, or other entities;
(c) providing annuities, including those issued in return for gifts, except those provided by
persons specified in Subsections
31A-22-1305
(2) and (3);
(d) providing the characteristic services of motor clubs as outlined in Subsection (106);
(e) providing other persons with insurance as defined in Subsection (78);
(f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor, or
surety, any contract or policy of title insurance;
(g) transacting or proposing to transact any phase of title insurance, including solicitation,
negotiation preliminary to execution, execution of a contract of title insurance, insuring, and
transacting matters subsequent to the execution of the contract and arising out of it, including
reinsurance; and
(h) doing, or proposing to do, any business in substance equivalent to Subsections (80)(a)
through (g) in a manner designed to evade the provisions of this title.
(81) "Insurance consultant" or "consultant" means a person who:
(a) advises other persons about insurance needs and coverages;
(b) is compensated by the person advised on a basis not directly related to the insurance
placed; and
(c) except as provided in Section
31A-23a-501
, is not compensated directly or indirectly
by an insurer or producer for advice given.
(82) "Insurance holding company system" means a group of two or more affiliated
persons, at least one of whom is an insurer.
(83) (a) "Insurance producer" or "producer" means a person licensed or required to be
licensed under the laws of this state to sell, solicit, or negotiate insurance.
(b) With regards to the selling, soliciting, or negotiating of an insurance product to an
insurance customer or an insured:
(i) "producer for the insurer" means a producer who is compensated directly or indirectly
by an insurer for selling, soliciting, or negotiating any product of that insurer; and
(ii) "producer for the insured" means a producer who:
- 26 -
(A) is compensated directly and only by an insurance customer or an insured; and
(B) receives no compensation directly or indirectly from an insurer for selling, soliciting,
or negotiating any product of that insurer to an insurance customer or insured.
(84) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
promise in an insurance policy and includes:
(i) policyholders;
(ii) subscribers;
(iii) members; and
(iv) beneficiaries.
(b) The definition in Subsection (84)(a):
(i) applies only to this title; and
(ii) does not define the meaning of this word as used in insurance policies or certificates.
(85) (a) (i) "Insurer" means any person doing an insurance business as a principal
including:
(A) fraternal benefit societies;
(B) issuers of gift annuities other than those specified in Subsections
31A-22-1305
(2) and
(3);
(C) motor clubs;
(D) employee welfare plans; and
(E) any person purporting or intending to do an insurance business as a principal on that
person's own account.
(ii) "Insurer" does not include a governmental entity[, as defined in Section
63-30-2
,] to
the extent it is engaged in the activities described in Section
31A-12-107
.
(b) "Admitted insurer" is defined in Subsection (153)(b).
(c) "Alien insurer" is defined in Subsection (7).
(d) "Authorized insurer" is defined in Subsection (153)(b).
(e) "Domestic insurer" is defined in Subsection (47).
(f) "Foreign insurer" is defined in Subsection (61).
- 27 -
(g) "Nonadmitted insurer" is defined in Subsection (153)(a).
(h) "Unauthorized insurer" is defined in Subsection (153)(a).
(86) "Interinsurance exchange" is defined in Subsection (135).
(87) "Involuntary unemployment insurance" means insurance:
(a) offered in connection with an extension of credit;
(b) that provides indemnity if the debtor is involuntarily unemployed for payments coming
due on a:
(i) specific loan; or
(ii) credit transaction.
(88) "Large employer," in connection with a health benefit plan, means an employer who,
with respect to a calendar year and to a plan year:
(a) employed an average of at least 51 eligible employees on each business day during the
preceding calendar year; and
(b) employs at least two employees on the first day of the plan year.
(89) (a) Except for a retainer contract or legal assistance described in Section
31A-1-103
,
"legal expense insurance" means insurance written to indemnify or pay for specified legal
expenses.
(b) "Legal expense insurance" includes arrangements that create reasonable expectations
of enforceable rights.
(c) "Legal expense insurance" does not include the provision of, or reimbursement for,
legal services incidental to other insurance coverages.
(90) (a) "Liability insurance" means insurance against liability:
(i) for death, injury, or disability of any human being, or for damage to property, exclusive
of the coverages under:
(A) Subsection (100) for medical malpractice insurance;
(B) Subsection (127) for professional liability insurance; and
(C) Subsection (157) for workers' compensation insurance;
(ii) for medical, hospital, surgical, and funeral benefits to persons other than the insured
- 28 -
who are injured, irrespective of legal liability of the insured, when issued with or supplemental to
insurance against legal liability for the death, injury, or disability of human beings, exclusive of the
coverages under:
(A) Subsection (100) for medical malpractice insurance;
(B) Subsection (127) for professional liability insurance; and
(C) Subsection (157) for workers' compensation insurance;
(iii) for loss or damage to property resulting from accidents to or explosions of boilers,
pipes, pressure containers, machinery, or apparatus;
(iv) for loss or damage to any property caused by the breakage or leakage of sprinklers,
water pipes and containers, or by water entering through leaks or openings in buildings; or
(v) for other loss or damage properly the subject of insurance not within any other kind or
kinds of insurance as defined in this chapter, if such insurance is not contrary to law or public
policy.
(b) "Liability insurance" includes:
(i) vehicle liability insurance as defined in Subsection (155);
(ii) residential dwelling liability insurance as defined in Subsection (138); and
(iii) making inspection of, and issuing certificates of inspection upon, elevators, boilers,
machinery, and apparatus of any kind when done in connection with insurance on them.
(91) (a) "License" means the authorization issued by the commissioner to engage in some
activity that is part of or related to the insurance business.
(b) "License" includes certificates of authority issued to insurers.
(92) (a) "Life insurance" means insurance on human lives and insurances pertaining to or
connected with human life.
(b) The business of life insurance includes:
(i) granting death benefits;
(ii) granting annuity benefits;
(iii) granting endowment benefits;
(iv) granting additional benefits in the event of death by accident;
- 29 -
(v) granting additional benefits to safeguard the policy against lapse in the event of
disability; and
(vi) providing optional methods of settlement of proceeds.
(93) "Limited license" means a license that:
(a) is issued for a specific product of insurance; and
(b) limits an individual or agency to transact only for that product or insurance.
(94) "Limited line credit insurance" includes the following forms of insurance:
(a) credit life;
(b) credit accident and health;
(c) credit property;
(d) credit unemployment;
(e) involuntary unemployment;
(f) mortgage life;
(g) mortgage guaranty;
(h) mortgage accident and health;
(i) guaranteed automobile protection; and
(j) any other form of insurance offered in connection with an extension of credit that:
(i) is limited to partially or wholly extinguishing the credit obligation; and
(ii) the commissioner determines by rule should be designated as a form of limited line
credit insurance.
(95) "Limited line credit insurance producer" means a person who sells, solicits, or
negotiates one or more forms of limited line credit insurance coverage to individuals through a
master, corporate, group, or individual policy.
(96) "Limited line insurance" includes:
(a) bail bond;
(b) limited line credit insurance;
(c) legal expense insurance;
(d) motor club insurance;
- 30 -
(e) rental car-related insurance;
(f) travel insurance; and
(g) any other form of limited insurance that the commissioner determines by rule should
be designated a form of limited line insurance.
(97) "Limited lines authority" includes:
(a) the lines of insurance listed in Subsection (96); and
(b) a customer service representative.
(98) "Limited lines producer" means a person who sells, solicits, or negotiates limited
lines insurance.
(99) (a) "Long-term care insurance" means an insurance policy or rider advertised,
marketed, offered, or designated to provide coverage:
(i) in a setting other than an acute care unit of a hospital;
(ii) for not less than 12 consecutive months for each covered person on the basis of:
(A) expenses incurred;
(B) indemnity;
(C) prepayment; or
(D) another method;
(iii) for one or more necessary or medically necessary services that are:
(A) diagnostic;
(B) preventative;
(C) therapeutic;
(D) rehabilitative;
(E) maintenance; or
(F) personal care; and
(iv) that may be issued by:
(A) an insurer;
(B) a fraternal benefit society;
(C) (I) a nonprofit health hospital; and
- 31 -
(II) a medical service corporation;
(D) a prepaid health plan;
(E) a health maintenance organization; or
(F) an entity similar to the entities described in Subsections (99)(a)(iv)(A) through (E) to
the extent that the entity is otherwise authorized to issue life or health care insurance.
(b) "Long-term care insurance" includes:
(i) any of the following that provide directly or supplement long-term care insurance:
(A) a group or individual annuity or rider; or
(B) a life insurance policy or rider;
(ii) a policy or rider that provides for payment of benefits based on:
(A) cognitive impairment; or
(B) functional capacity; or
(iii) a qualified long-term care insurance contract.
(c) "Long-term care insurance" does not include:
(i) a policy that is offered primarily to provide basic Medicare supplement coverage;
(ii) basic hospital expense coverage;
(iii) basic medical/surgical expense coverage;
(iv) hospital confinement indemnity coverage;
(v) major medical expense coverage;
(vi) income replacement or related asset-protection coverage;
(vii) accident only coverage;
(viii) coverage for a specified:
(A) disease; or
(B) accident;
(ix) limited benefit health coverage; or
(x) a life insurance policy that accelerates the death benefit to provide the option of a
lump sum payment:
(A) if the following are not conditioned on the receipt of long-term care:
- 32 -
(I) benefits; or
(II) eligibility; and
(B) the coverage is for one or more the following qualifying events:
(I) terminal illness;
(II) medical conditions requiring extraordinary medical intervention; or
(III) permanent institutional confinement.
(100) "Medical malpractice insurance" means insurance against legal liability incident to
the practice and provision of medical services other than the practice and provision of dental
services.
(101) "Member" means a person having membership rights in an insurance corporation.
(102) "Minimum capital" or "minimum required capital" means the capital that must be
constantly maintained by a stock insurance corporation as required by statute.
(103) "Mortgage accident and health insurance" means insurance offered in connection
with an extension of credit that provides indemnity for payments coming due on a mortgage while
the debtor is disabled.
(104) "Mortgage guaranty insurance" means surety insurance under which mortgagees
and other creditors are indemnified against losses caused by the default of debtors.
(105) "Mortgage life insurance" means insurance on the life of a debtor in connection
with an extension of credit that pays if the debtor dies.
(106) "Motor club" means a person:
(a) licensed under:
(i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
(ii) Chapter 11, Motor Clubs; or
(iii) Chapter 14, Foreign Insurers; and
(b) that promises for an advance consideration to provide for a stated period of time:
(i) legal services under Subsection
31A-11-102
(1)(b);
(ii) bail services under Subsection
31A-11-102
(1)(c); or
(iii) trip reimbursement, towing services, emergency road services, stolen automobile
- 33 -
services, a combination of these services, or any other services given in Subsections
31A-11-102
(1)(b) through (f).
(107) "Mutual" means mutual insurance corporation.
(108) "Network plan" means health care insurance:
(a) that is issued by an insurer; and
(b) under which the financing and delivery of medical care is provided, in whole or in
part, through a defined set of providers under contract with the insurer, including the financing
and delivery of items paid for as medical care.
(109) "Nonparticipating" means a plan of insurance under which the insured is not
entitled to receive dividends representing shares of the surplus of the insurer.
(110) "Ocean marine insurance" means insurance against loss of or damage to:
(a) ships or hulls of ships;
(b) goods, freight, cargoes, merchandise, effects, disbursements, profits, moneys,
securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia interests,
or other cargoes in or awaiting transit over the oceans or inland waterways;
(c) earnings such as freight, passage money, commissions, or profits derived from
transporting goods or people upon or across the oceans or inland waterways; or
(d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
owners of other vessels, owners of fixed objects, customs or other authorities, or other persons in
connection with maritime activity.
(111) "Order" means an order of the commissioner.
(112) "Outline of coverage" means a summary that explains an accident and health
insurance policy.
(113) "Participating" means a plan of insurance under which the insured is entitled to
receive dividends representing shares of the surplus of the insurer.
(114) "Participation," as used in a health benefit plan, means a requirement relating to the
minimum percentage of eligible employees that must be enrolled in relation to the total number of
eligible employees of an employer reduced by each eligible employee who voluntarily declines
- 34 -
coverage under the plan because the employee has other health care insurance coverage.
(115) "Person" includes an individual, partnership, corporation, incorporated or
unincorporated association, joint stock company, trust, reciprocal, syndicate, or any similar entity
or combination of entities acting in concert.
(116) "Personal lines insurance" means property and casualty insurance coverage sold for
primarily noncommercial purposes to:
(a) individuals; and
(b) families.
(117) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
(118) "Plan year" means:
(a) the year that is designated as the plan year in:
(i) the plan document of a group health plan; or
(ii) a summary plan description of a group health plan;
(b) if the plan document or summary plan description does not designate a plan year or
there is no plan document or summary plan description:
(i) the year used to determine deductibles or limits;
(ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis; or
(iii) the employer's taxable year if:
(A) the plan does not impose deductibles or limits on a yearly basis; and
(B) (I) the plan is not insured; or
(II) the insurance policy is not renewed on an annual basis; or
(c) in a case not described in Subsection (118)(a) or (b), the calendar year.
(119) (a) (i) "Policy" means any document, including attached endorsements and riders,
purporting to be an enforceable contract, which memorializes in writing some or all of the terms
of an insurance contract.
(ii) "Policy" includes a service contract issued by:
(A) a motor club under Chapter 11, Motor Clubs;
(B) a service contract provided under Chapter 6a, Service Contracts; and
- 35 -
(C) a corporation licensed under:
(I) Chapter 7, Nonprofit Health Service Insurance Corporations; or
(II) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
(iii) "Policy" does not include:
(A) a certificate under a group insurance contract; or
(B) a document that does not purport to have legal effect.
(b) (i) "Group insurance policy" means a policy covering a group of persons that is issued
to a policyholder on behalf of the group, for the benefit of group members who are selected under
procedures defined in the policy or in agreements which are collateral to the policy.
(ii) A group insurance policy may include members of the policyholder's family or
dependents.
(c) "Blanket insurance policy" means a group policy covering classes of persons without
individual underwriting, where the persons insured are determined by definition of the class with
or without designating the persons covered.
(120) "Policyholder" means the person who controls a policy, binder, or oral contract by
ownership, premium payment, or otherwise.
(121) "Policy illustration" means a presentation or depiction that includes nonguaranteed
elements of a policy of life insurance over a period of years.
(122) "Policy summary" means a synopsis describing the elements of a life insurance
policy.
(123) "Preexisting condition," in connection with a health benefit plan, means:
(a) a condition for which medical advice, diagnosis, care, or treatment was recommended
or received during the six months immediately preceding the earlier of:
(i) the enrollment date; or
(ii) the effective date of coverage; or
(b) for an individual insurance policy, a pregnancy existing on the effective date of
coverage.
(124) (a) "Premium" means the monetary consideration for an insurance policy, and
- 36 -
includes assessments, membership fees, required contributions, or monetary consideration,
however designated.
(b) Consideration paid to third party administrators for their services is not "premium,"
though amounts paid by third party administrators to insurers for insurance on the risks
administered by the third party administrators are "premium."
(125) "Principal officers" of a corporation means the officers designated under Subsection
31A-5-203
(3).
(126) "Proceedings" includes actions and special statutory proceedings.
(127) "Professional liability insurance" means insurance against legal liability incident to
the practice of a profession and provision of any professional services.
(128) "Property insurance" means insurance against loss or damage to real or personal
property of every kind and any interest in that property, from all hazards or causes, and against
loss consequential upon the loss or damage including vehicle comprehensive and vehicle physical
damage coverages, but excluding inland marine insurance and ocean marine insurance as defined
under Subsections (76) and (110).
(129) "Qualified long-term care insurance contract" or "federally tax qualified long-term
care insurance contract" means:
(a) an individual or group insurance contract that meets the requirements of Section
7702B(b), Internal Revenue Code; or
(b) the portion of a life insurance contract that provides long-term care insurance:
(i) (A) by rider; or
(B) as a part of the contract; and
(ii) that satisfies the requirements of Section 7702B(b) and (e), Internal Revenue Code.
(130) "Qualified United States financial institution" means an institution that:
(a) is:
(i) organized under the laws of the United States or any state; or
(ii) in the case of a United States office of a foreign banking organization, licensed under
the laws of the United States or any state;
- 37 -
(b) is regulated, supervised, and examined by United States federal or state authorities
having regulatory authority over banks and trust companies; and
(c) meets the standards of financial condition and standing that are considered necessary
and appropriate to regulate the quality of financial institutions whose letters of credit will be
acceptable to the commissioner as determined by:
(i) the commissioner by rule; or
(ii) the Securities Valuation Office of the National Association of Insurance
Commissioners.
(131) (a) "Rate" means:
(i) the cost of a given unit of insurance; or
(ii) for property-casualty insurance, that cost of insurance per exposure unit either
expressed as:
(A) a single number; or
(B) a pure premium rate, adjusted before any application of individual risk variations
based on loss or expense considerations to account for the treatment of:
(I) expenses;
(II) profit; and
(III) individual insurer variation in loss experience.
(b) "Rate" does not include a minimum premium.
(132) (a) Except as provided in Subsection (132)(b), "rate service organization" means
any person who assists insurers in rate making or filing by:
(i) collecting, compiling, and furnishing loss or expense statistics;
(ii) recommending, making, or filing rates or supplementary rate information; or
(iii) advising about rate questions, except as an attorney giving legal advice.
(b) "Rate service organization" does not mean:
(i) an employee of an insurer;
(ii) a single insurer or group of insurers under common control;
(iii) a joint underwriting group; or
- 38 -
(iv) a natural person serving as an actuarial or legal consultant.
(133) "Rating manual" means any of the following used to determine initial and renewal
policy premiums:
(a) a manual of rates;
(b) classifications;
(c) rate-related underwriting rules; and
(d) rating formulas that describe steps, policies, and procedures for determining initial and
renewal policy premiums.
(134) "Received by the department" means:
(a) except as provided in Subsection (134)(b), the date delivered to and stamped received
by the department, whether delivered:
(i) in person; or
(ii) electronically; and
(b) if delivered to the department by a delivery service, the delivery service's postmark
date or pick-up date unless otherwise stated in:
(i) statute;
(ii) rule; or
(iii) a specific filing order.
(135) "Reciprocal" or "interinsurance exchange" means any unincorporated association of
persons:
(a) operating through an attorney-in-fact common to all of them; and
(b) exchanging insurance contracts with one another that provide insurance coverage on
each other.
(136) "Reinsurance" means an insurance transaction where an insurer, for consideration,
transfers any portion of the risk it has assumed to another insurer. In referring to reinsurance
transactions, this title sometimes refers to:
(a) the insurer transferring the risk as the "ceding insurer"; and
(b) the insurer assuming the risk as the:
- 39 -
(i) "assuming insurer"; or
(ii) "assuming reinsurer."
(137) "Reinsurer" means any person, firm, association, or corporation licensed in this
state as an insurer with the authority to assume reinsurance.
(138) "Residential dwelling liability insurance" means insurance against liability resulting
from or incident to the ownership, maintenance, or use of a residential dwelling that is a detached
single family residence or multifamily residence up to four units.
(139) "Retrocession" means reinsurance with another insurer of a liability assumed under
a reinsurance contract. A reinsurer "retrocedes" when it reinsures with another insurer part of a
liability assumed under a reinsurance contract.
(140) "Rider" means an endorsement to:
(a) an insurance policy; or
(b) an insurance certificate.
(141) (a) "Security" means any:
(i) note;
(ii) stock;
(iii) bond;
(iv) debenture;
(v) evidence of indebtedness;
(vi) certificate of interest or participation in any profit-sharing agreement;
(vii) collateral-trust certificate;
(viii) preorganization certificate or subscription;
(ix) transferable share;
(x) investment contract;
(xi) voting trust certificate;
(xii) certificate of deposit for a security;
(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
payments out of production under such a title or lease;
- 40 -
(xiv) commodity contract or commodity option;
(xv) any certificate of interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in
Subsections (141)(a)(i) through (xiv); or
(xvi) any other interest or instrument commonly known as a security.
(b) "Security" does not include:
(i) any insurance or endowment policy or annuity contract under which an insurance
company promises to pay money in a specific lump sum or periodically for life or some other
specified period; or
(ii) a burial certificate or burial contract.
(142) "Self-insurance" means any arrangement under which a person provides for
spreading its own risks by a systematic plan.
(a) Except as provided in this Subsection (142), self-insurance does not include an
arrangement under which a number of persons spread their risks among themselves.
(b) Self-insurance does include an arrangement by which a governmental entity[, as
defined in Section
63-30-2
,] undertakes to indemnify its employees for liability arising out of the
employees' employment.
(c) Self-insurance does include an arrangement by which a person with a managed
program of self-insurance and risk management undertakes to indemnify its affiliates, subsidiaries,
directors, officers, or employees for liability or risk which is related to the relationship or
employment.
(d) Self-insurance does not include any arrangement with independent contractors.
(143) "Sell" means to exchange a contract of insurance:
(a) by any means;
(b) for money or its equivalent; and
(c) on behalf of an insurance company.
(144) "Short-term care insurance" means any insurance policy or rider advertised,
marketed, offered, or designed to provide coverage that is similar to long-term care insurance but
- 41 -
that provides coverage for less than 12 consecutive months for each covered person.
(145) "Small employer," in connection with a health benefit plan, means an employer
who, with respect to a calendar year and to a plan year:
(a) employed an average of at least two employees but not more than 50 eligible
employees on each business day during the preceding calendar year; and
(b) employs at least two employees on the first day of the plan year.
(146) (a) "Subsidiary" of a person means an affiliate controlled by that person either
directly or indirectly through one or more affiliates or intermediaries.
(b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting shares
are owned by that person either alone or with its affiliates, except for the minimum number of
shares the law of the subsidiary's domicile requires to be owned by directors or others.
(147) Subject to Subsection (78)(b), "surety insurance" includes:
(a) a guarantee against loss or damage resulting from failure of principals to pay or
perform their obligations to a creditor or other obligee;
(b) bail bond insurance; and
(c) fidelity insurance.
(148) (a) "Surplus" means the excess of assets over the sum of paid-in capital and
liabilities.
(b) (i) "Permanent surplus" means the surplus of a mutual insurer that has been designated
by the insurer as permanent.
(ii) Sections
31A-5-211
,
31A-7-201
,
31A-8-209
,
31A-9-209
, and
31A-14-209
require
that mutuals doing business in this state maintain specified minimum levels of permanent surplus.
(iii) Except for assessable mutuals, the minimum permanent surplus requirement is
essentially the same as the minimum required capital requirement that applies to stock insurers.
(c) "Excess surplus" means:
(i) for life or accident and health insurers, health organizations, and property and casualty
insurers as defined in Section
31A-17-601
, the lesser of:
(A) that amount of an insurer's or health organization's total adjusted capital, as defined in
- 42 -
Subsection (151), that exceeds the product of:
(I) 2.5; and
(II) the sum of the insurer's or health organization's minimum capital or permanent surplus
required under Section
31A-5-211
,
31A-9-209
, or
31A-14-205
; or
(B) that amount of an insurer's or health organization's total adjusted capital, as defined in
Subsection (151), that exceeds the product of:
(I) 3.0; and
(II) the authorized control level RBC as defined in Subsection
31A-17-601
(8)(a); and
(ii) for monoline mortgage guaranty insurers, financial guaranty insurers, and title
insurers, that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
(A) 1.5; and
(B) the insurer's total adjusted capital required by Subsection
31A-17-609
(1).
(149) "Third party administrator" or "administrator" means any person who collects
charges or premiums from, or who, for consideration, adjusts or settles claims of residents of the
state in connection with insurance coverage, annuities, or service insurance coverage, except:
(a) a union on behalf of its members;
(b) a person administering any:
(i) pension plan subject to the federal Employee Retirement Income Security Act of 1974;
(ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
(iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
(c) an employer on behalf of the employer's employees or the employees of one or more
of the subsidiary or affiliated corporations of the employer;
(d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance for
which the insurer holds a license in this state; or
(e) a person licensed or exempt from licensing under Chapter 23a, Insurance Marketing -
Licensing Producers, Consultants, and Reinsurance Intermediaries, or Chapter 26, Insurance
Adjusters, whose activities are limited to those authorized under the license the person holds or
for which the person is exempt.
- 43 -
(150) "Title insurance" means the insuring, guaranteeing, or indemnifying of owners of
real or personal property or the holders of liens or encumbrances on that property, or others
interested in the property against loss or damage suffered by reason of liens or encumbrances
upon, defects in, or the unmarketability of the title to the property, or invalidity or
unenforceability of any liens or encumbrances on the property.
(151) "Total adjusted capital" means the sum of an insurer's or health organization's
statutory capital and surplus as determined in accordance with:
(a) the statutory accounting applicable to the annual financial statements required to be
filed under Section
31A-4-113
; and
(b) any other items provided by the RBC instructions, as RBC instructions is defined in
Section
31A-17-601
.
(152) (a) "Trustee" means "director" when referring to the board of directors of a
corporation.
(b) "Trustee," when used in reference to an employee welfare fund, means an individual,
firm, association, organization, joint stock company, or corporation, whether acting individually
or jointly and whether designated by that name or any other, that is charged with or has the
overall management of an employee welfare fund.
(153) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer" means
an insurer:
(i) not holding a valid certificate of authority to do an insurance business in this state; or
(ii) transacting business not authorized by a valid certificate.
(b) "Admitted insurer" or "authorized insurer" means an insurer:
(i) holding a valid certificate of authority to do an insurance business in this state; and
(ii) transacting business as authorized by a valid certificate.
(154) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
(155) "Vehicle liability insurance" means insurance against liability resulting from or
incident to ownership, maintenance, or use of any land vehicle or aircraft, exclusive of vehicle
comprehensive and vehicle physical damage coverages under Subsection (128).
- 44 -
(156) "Voting security" means a security with voting rights, and includes any security
convertible into a security with a voting right associated with it.
(157) "Workers' compensation insurance" means:
(a) insurance for indemnification of employers against liability for compensation based on:
(i) compensable accidental injuries; and
(ii) occupational disease disability;
(b) employer's liability insurance incidental to workers' compensation insurance and
written in connection with it; and
(c) insurance assuring to the persons entitled to workers' compensation benefits the
compensation provided by law.
Section 5.
Section
31A-2-306
is amended to read:
31A-2-306. Judicial review -- Costs.
(1) A person aggrieved by a rule or order of the commissioner, or aggrieved by the
commissioner's failure to act when he has a duty to act, may obtain judicial review.
(2) The court reviewing agency actions governed by this title shall give priority to those
actions and shall hear and determine them promptly.
(3) Costs shall be awarded as in civil cases. If the court finds that the appeal from action
or inaction stemmed from the bad faith or malice of the commissioner, the court may award
reasonable attorney's fees to the prevailing petitioner. Section [
63-30-23] 63-30d-701
applies to
the extent the attorney's fees awarded under this subsection exceed $10,000 for any one appeal.
Section 6.
Section
31A-12-107
is amended to read:
31A-12-107. Governmental immunity.
Notwithstanding any other provision of this title, a governmental entity[, as defined in
Section
63-30-2
,] is not an insurer for purposes of this title and is not engaged in the business of
insurance to the extent that it is:
(1) covering its own liabilities under Title 63, Chapter [30] 30d, Governmental Immunity
Act of Utah; or
(2) engaging in other related risk management activities related to the normal course of its
- 45 -
activities.
Section 7.
Section
31A-22-305
is amended to read:
31A-22-305. Uninsured and underinsured motorist coverage.
(1) As used in this section, "covered persons" includes:
(a) the named insured;
(b) persons related to the named insured by blood, marriage, adoption, or guardianship,
who are residents of the named insured's household, including those who usually make their home
in the same household but temporarily live elsewhere;
(c) any person occupying or using a motor vehicle:
(i) referred to in the policy; or
(ii) owned by a self-insurer; and
(d) any person who is entitled to recover damages against the owner or operator of the
uninsured or underinsured motor vehicle because of bodily injury to or death of persons under
Subsection (1)(a), (b), or (c).
(2) As used in this section, "uninsured motor vehicle" includes:
(a) (i) a motor vehicle, the operation, maintenance, or use of which is not covered under a
liability policy at the time of an injury-causing occurrence; or
(ii) (A) a motor vehicle covered with lower liability limits than required by Section
31A-22-304
; and
(B) the motor vehicle described in Subsection (2)(a)(ii)(A) is uninsured to the extent of
the deficiency;
(b) an unidentified motor vehicle that left the scene of an accident proximately caused by
the motor vehicle operator;
(c) a motor vehicle covered by a liability policy, but coverage for an accident is disputed
by the liability insurer for more than 60 days or continues to be disputed for more than 60 days; or
(d) (i) an insured motor vehicle if, before or after the accident, the liability insurer of the
motor vehicle is declared insolvent by a court of competent jurisdiction; and
(ii) the motor vehicle described in Subsection (2)(d)(i) is uninsured only to the extent that
- 46 -
the claim against the insolvent insurer is not paid by a guaranty association or fund.
(3) (a) Uninsured motorist coverage under Subsection
31A-22-302
(1)(b) provides
coverage for covered persons who are legally entitled to recover damages from owners or
operators of uninsured motor vehicles because of bodily injury, sickness, disease, or death.
(b) For new policies written on or after January 1, 2001, the limits of uninsured motorist
coverage shall be equal to the lesser of the limits of the insured's motor vehicle liability coverage
or the maximum uninsured motorist coverage limits available by the insurer under the insured's
motor vehicle policy, unless the insured purchases coverage in a lesser amount by signing an
acknowledgment form provided by the insurer that:
(i) waives the higher coverage;
(ii) reasonably explains the purpose of uninsured motorist coverage; and
(iii) discloses the additional premiums required to purchase uninsured motorist coverage
with limits equal to the lesser of the limits of the insured's motor vehicle liability coverage or the
maximum uninsured motorist coverage limits available by the insurer under the insured's motor
vehicle policy.
(c) Self-insurers, including governmental entities, may elect to provide uninsured motorist
coverage in an amount that is less than their maximum self-insured retention under Subsections
(3)(b) and (4)(a) by issuing a declaratory memorandum or policy statement from the chief
financial officer or chief risk officer that declares the:
(i) self-insured entity's coverage level; and
(ii) process for filing an uninsured motorist claim.
(d) Uninsured motorist coverage may not be sold with limits that are less than the
minimum bodily injury limits for motor vehicle liability policies under Section
31A-22-304
.
(e) The acknowledgment under Subsection (3)(b) continues for that issuer of the
uninsured motorist coverage until the insured, in writing, requests different uninsured motorist
coverage from the insurer.
(f) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
policies existing on that date, the insurer shall disclose in the same medium as the premium
- 47 -
renewal notice, an explanation of the purpose of uninsured motorist coverage and the costs
associated with increasing the coverage in amounts up to and including the maximum amount
available by the insurer under the insured's motor vehicle policy.
(ii) The disclosure shall be sent to all insureds that carry uninsured motorist coverage
limits in an amount less than the insured's motor vehicle liability policy limits or the maximum
uninsured motorist coverage limits available by the insurer under the insured's motor vehicle
policy.
(4) (a) (i) Except as provided in Subsection (4)(b), the named insured may reject
uninsured motorist coverage by an express writing to the insurer that provides liability coverage
under Subsection
31A-22-302
(1)(a).
(ii) This rejection shall be on a form provided by the insurer that includes a reasonable
explanation of the purpose of uninsured motorist coverage.
(iii) This rejection continues for that issuer of the liability coverage until the insured in
writing requests uninsured motorist coverage from that liability insurer.
(b) (i) All persons, including governmental entities, that are engaged in the business of, or
that accept payment for, transporting natural persons by motor vehicle, and all school districts
that provide transportation services for their students, shall provide coverage for all motor
vehicles used for that purpose, by purchase of a policy of insurance or by self-insurance,
uninsured motorist coverage of at least $25,000 per person and $500,000 per accident.
(ii) This coverage is secondary to any other insurance covering an injured covered person.
(c) Uninsured motorist coverage:
(i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers' Compensation
Act;
(ii) may not be subrogated by the Workers' Compensation insurance carrier;
(iii) may not be reduced by any benefits provided by Workers' Compensation insurance;
(iv) may be reduced by health insurance subrogation only after the covered person has
been made whole;
(v) may not be collected for bodily injury or death sustained by a person:
- 48 -
(A) while committing a violation of Section
41-1a-1314
;
(B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated in
violation of Section
41-1a-1314
; or
(C) while committing a felony; and
(vi) notwithstanding Subsection (4)(c)(v), may be recovered:
(A) for a person under 18 years of age who is injured within the scope of Subsection
(4)(c)(v) but limited to medical and funeral expenses; or
(B) by a law enforcement officer as defined in Section
53-13-103
, who is injured within
the course and scope of the law enforcement officer's duties.
(d) As used in this Subsection (4)[: (i) "Governmental entity" has the same meaning as
under Section
63-30-2
. (ii) "Motor], "motor vehicle" has the same meaning as under Section
41-1a-102
.
(5) When a covered person alleges that an uninsured motor vehicle under Subsection
(2)(b) proximately caused an accident without touching the covered person or the motor vehicle
occupied by the covered person, the covered person must show the existence of the uninsured
motor vehicle by clear and convincing evidence consisting of more than the covered person's
testimony.
(6) (a) The limit of liability for uninsured motorist coverage for two or more motor
vehicles may not be added together, combined, or stacked to determine the limit of insurance
coverage available to an injured person for any one accident.
(b) (i) Subsection (6)(a) applies to all persons except a covered person as defined under
Subsection (7)(b)(ii).
(ii) A covered person as defined under Subsection (7)(b)(ii) is entitled to the highest limits
of uninsured motorist coverage afforded for any one motor vehicle that the covered person is the
named insured or an insured family member.
(iii) This coverage shall be in addition to the coverage on the motor vehicle the covered
person is occupying.
(iv) Neither the primary nor the secondary coverage may be set off against the other.
- 49 -
(c) Coverage on a motor vehicle occupied at the time of an accident shall be primary
coverage, and the coverage elected by a person described under Subsections (1)(a) and (b) shall
be secondary coverage.
(7) (a) Uninsured motorist coverage under this section applies to bodily injury, sickness,
disease, or death of covered persons while occupying or using a motor vehicle only if the motor
vehicle is described in the policy under which a claim is made, or if the motor vehicle is a newly
acquired or replacement motor vehicle covered under the terms of the policy. Except as provided
in Subsection (6) or this Subsection (7), a covered person injured in a motor vehicle described in a
policy that includes uninsured motorist benefits may not elect to collect uninsured motorist
coverage benefits from any other motor vehicle insurance policy under which he is a covered
person.
(b) Each of the following persons may also recover uninsured motorist benefits under any
one other policy in which they are described as a "covered person" as defined in Subsection (1):
(i) a covered person injured as a pedestrian by an uninsured motor vehicle; and
(ii) except as provided in Subsection (7)(c), a covered person injured while occupying or
using a motor vehicle that is not owned, leased, or furnished, to the covered person, to the
covered person's spouse, or to the covered person's resident parent or resident sibling.
(c) (i) A covered person may recover benefits from no more than two additional policies,
one additional policy from each parent's household if the covered person is:
(A) a dependent minor of parents who reside in separate households; and
(B) injured while occupying or using a motor vehicle that is not owned, leased, or
furnished to the covered person, the covered person's resident parent, or to the covered person's
resident sibling.
(ii) Each parent's policy under this Subsection (7)(c) is liable only for the percentage of
the damages that the limit of liability of each parent's policy of uninsured motorist coverage bears
to the total of all uninsured coverage applicable to the accident.
(d) A covered person's recovery under any available policies may not exceed the full
amount of damages.
- 50 -
(e) A covered person in Subsection (7)(b) is not barred against making subsequent
elections if recovery is unavailable under previous elections.
(8) (a) As used in this section, "underinsured motor vehicle" includes a motor vehicle, the
operation, maintenance, or use of which is covered under a liability policy at the time of an
injury-causing occurrence, but which has insufficient liability coverage to compensate fully the
injured party for all special and general damages.
(b) The term "underinsured motor vehicle" does not include:
(i) a motor vehicle that is covered under the liability coverage of the same policy that also
contains the underinsured motorist coverage;
(ii) an uninsured motor vehicle as defined in Subsection (2); or
(iii) a motor vehicle owned or leased by the named insured, the named insured's spouse,
or any dependant of the named insured.
(9) (a) (i) Underinsured motorist coverage under Subsection
31A-22-302
(1)(c) provides
coverage for covered persons who are legally entitled to recover damages from owners or
operators of underinsured motor vehicles because of bodily injury, sickness, disease, or death.
(ii) A covered person occupying or using a motor vehicle owned, leased, or furnished to
the covered person, the covered person's spouse, or covered person's resident relative may
recover underinsured benefits only if the motor vehicle is:
(A) described in the policy under which a claim is made; or
(B) a newly acquired or replacement motor vehicle covered under the terms of the policy.
(b) For new policies written on or after January 1, 2001, the limits of underinsured
motorist coverage shall be equal to the lesser of the limits of the insured's motor vehicle liability
coverage or the maximum underinsured motorist coverage limits available by the insurer under the
insured's motor vehicle policy, unless the insured purchases coverage in a lesser amount by
signing an acknowledgment form provided by the insurer that:
(i) waives the higher coverage;
(ii) reasonably explains the purpose of underinsured motorist coverage; and
(iii) discloses the additional premiums required to purchase underinsured motorist
- 51 -
coverage with limits equal to the lesser of the limits of the insured's motor vehicle liability
coverage or the maximum underinsured motorist coverage limits available by the insurer under the
insured's motor vehicle policy.
(c) Self-insurers, including governmental entities, may elect to provide underinsured
motorist coverage in an amount that is less than their maximum self-insured retention under
Subsections (9)(b) and (9)(g) by issuing a declaratory memorandum or policy statement from the
chief financial officer or chief risk officer that declares the:
(i) self-insured entity's coverage level; and
(ii) process for filing an underinsured motorist claim.
(d) Underinsured motorist coverage may not be sold with limits that are less than $10,000
for one person in any one accident and at least $20,000 for two or more persons in any one
accident.
(e) The acknowledgment under Subsection (9)(b) continues for that issuer of the
underinsured motorist coverage until the insured, in writing, requests different underinsured
motorist coverage from the insurer.
(f) The named insured's underinsured motorist coverage, as described in Subsection
(9)(a), is secondary to the liability coverage of an owner or operator of an underinsured motor
vehicle, as described in Subsection (8). Underinsured motorist coverage may not be set off
against the liability coverage of the owner or operator of an underinsured motor vehicle, but shall
be added to, combined with, or stacked upon the liability coverage of the owner or operator of
the underinsured motor vehicle to determine the limit of coverage available to the injured person.
(g) (i) A named insured may reject underinsured motorist coverage by an express writing
to the insurer that provides liability coverage under Subsection
31A-22-302
(1)(a).
(ii) This written rejection shall be on a form provided by the insurer that includes a
reasonable explanation of the purpose of underinsured motorist coverage and when it would be
applicable.
(iii) This rejection continues for that issuer of the liability coverage until the insured in
writing requests underinsured motorist coverage from that liability insurer.
- 52 -
(h) (i) In conjunction with the first two renewal notices sent after January 1, 2001, for
policies existing on that date, the insurer shall disclose in the same medium as the premium
renewal notice, an explanation of the purpose of underinsured motorist coverage and the costs
associated with increasing the coverage in amounts up to and including the maximum amount
available by the insurer under the insured's motor vehicle policy.
(ii) The disclosure shall be sent to all insureds that carry underinsured motorist coverage
limits in an amount less than the insured's motor vehicle liability policy limits or the maximum
underinsured motorist coverage limits available by the insurer under the insured's motor vehicle
policy.
(10) (a) (i) Except as provided in this Subsection (10), a covered person injured in a
motor vehicle described in a policy that includes underinsured motorist benefits may not elect to
collect underinsured motorist coverage benefits from any other motor vehicle insurance policy.
(ii) The limit of liability for underinsured motorist coverage for two or more motor
vehicles may not be added together, combined, or stacked to determine the limit of insurance
coverage available to an injured person for any one accident.
(iii) Subsection (10)(a)(ii) applies to all persons except a covered person as defined under
Subsections (10)(b)(i) and (ii).
(b) (i) Except as provided in Subsection (10)(b)(ii), a covered person injured while
occupying, using, or maintaining a motor vehicle that is not owned, leased, or furnished to the
covered person, the covered person's spouse, or the covered person's resident parent or resident
sibling, may also recover benefits under any one other policy under which they are a covered
person.
(ii) (A) A covered person may recover benefits from no more than two additional policies,
one additional policy from each parent's household if the covered person is:
(I) a dependent minor of parents who reside in separate households; and
(II) injured while occupying or using a motor vehicle that is not owned, leased, or
furnished to the covered person, the covered person's resident parent, or the covered person's
resident sibling.
- 53 -
(B) Each parent's policy under this Subsection (10)(b)(ii) is liable only for the percentage
of the damages that the limit of liability of each parent's policy of underinsured motorist coverage
bears to the total of all underinsured coverage applicable to the accident.
(iii) A covered person's recovery under any available policies may not exceed the full
amount of damages.
(iv) Underinsured coverage on a motor vehicle occupied at the time of an accident shall
be primary coverage, and the coverage elected by a person described under Subsections (1)(a)
and (b) shall be secondary coverage.
(v) The primary and the secondary coverage may not be set off against the other.
(vi) A covered person as defined under Subsection (10)(b)(i) is entitled to the highest
limits of underinsured motorist coverage under only one additional policy per household
applicable to that covered person as a named insured, spouse, or relative.
(vii) A covered injured person is not barred against making subsequent elections if
recovery is unavailable under previous elections.
(c) Underinsured motorist coverage:
(i) is secondary to the benefits provided by Title 34A, Chapter 2, Workers' Compensation
Act;
(ii) may not be subrogated by the Workers' Compensation insurance carrier;
(iii) may not be reduced by any benefits provided by Workers' Compensation insurance;
(iv) may be reduced by health insurance subrogation only after the covered person has
been made whole;
(v) may not be collected for bodily injury or death sustained by a person:
(A) while committing a violation of Section
41-1a-1314
;
(B) who, as a passenger in a vehicle, has knowledge that the vehicle is being operated in
violation of Section
41-1a-1314
; or
(C) while committing a felony; and
(vi) notwithstanding Subsection (10)(c)(v), may be recovered:
(A) for a person under 18 years of age who is injured within the scope of Subsection
- 54 -
(10)(c)(v) but limited to medical and funeral expenses; or
(B) by a law enforcement officer as defined in Section
53-13-103
, who is injured within
the course and scope of the law enforcement officer's duties.
(11) The inception of the loss under Subsection
31A-21-313
(1) for underinsured motorist
claims occurs upon the date of the last liability policy payment.
(12) (a) Within five business days after notification in a manner specified by the
department that all liability insurers have tendered their liability policy limits, the underinsured
carrier shall either:
(i) waive any subrogation claim the underinsured carrier may have against the person
liable for the injuries caused in the accident; or
(ii) pay the insured an amount equal to the policy limits tendered by the liability carrier.
(b) If neither option is exercised under Subsection (12)(a), the subrogation claim is
deemed to be waived by the underinsured carrier.
(13) Except as otherwise provided in this section, a covered person may seek, subject to
the terms and conditions of the policy, additional coverage under any policy:
(a) that provides coverage for damages resulting from motor vehicle accidents; and
(b) that is not required to conform to Section
31A-22-302
.
Section 8.
Section
63-30a-3
is amended to read:
63-30a-3. Payment of reimbursement of attorneys' fees and court costs.
(1) A request for reimbursement of attorneys' fees and court costs shall be filed in the
manner provided in Sections [
63-30-36
and
63-30-37
]
63-30d-902
and
63-30d-903
.
(2) (a) Any reimbursement of attorneys' fees and court costs filed on behalf of an officer
or employee of the state shall be paid from funds appropriated to the department or division that
employed the officer or employee at the time of the act or omission that gave rise to the
indictment or information.
(b) If those funds are unavailable, the reimbursement shall be paid from the General Fund
upon approval by the Board of Examiners and legislative appropriation.
Section 9.
Section
63-30d-101
is enacted to read:
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CHAPTER 30d. GOVERNMENTAL IMMUNITY ACT OF UTAH
Part 1. General Provisions
63-30d-101. Title, scope, and intent.
(1) This chapter is known as the "Governmental Immunity Act of Utah."
(2) (a) The waivers and retentions of immunity found in this chapter apply to all functions
of government, no matter how labeled.
(b) This single, comprehensive chapter governs all claims against governmental entities or
against their employees or agents arising out of the performance of the employee's duties, within
the scope of employment, or under color of authority.
Section 10.
Section
63-30d-102
is enacted to read:
63-30d-102. Definitions.
As used in this chapter:
(1) "Claim" means any asserted demand for or cause of action for money or damages,
whether arising under the common law, under state constitutional provisions, or under state
statutes, against a governmental entity or against an employee in the employee's personal capacity.
(2) (a) "Employee" includes:
(i) a governmental entity's officers, employees, servants, trustees, or commissioners;
(ii) members of a governing body;
(iii) members of a government entity board;
(iv) members of a government entity commission;
(v) members of an advisory body, officers, and employees of a Children's Justice Center
created in accordance with Section
67-5b-104
;
(vi) student teachers holding a letter of authorization in accordance with Sections
53A-6-103
and
53A-6-104
;
(vii) educational aides;
(viii) students engaged in providing services to members of the public in the course of an
approved medical, nursing, or other professional health care clinical training program;
(ix) volunteers as defined by Subsection
67-20-2
(3); and
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(x) tutors.
(b) "Employee" includes all of the positions identified in Subsection (2)(a), whether or not
the individual holding that position receives compensation.
(c) "Employee" does not include an independent contractor.
(3) "Governmental entity" means the state and its political subdivisions as both are
defined in this section.
(4) (a) "Governmental function" means each activity, undertaking, or operation of a
governmental entity.
(b) "Governmental function" includes each activity, undertaking, or operation performed
by a department, agency, employee, agent, or officer of a governmental entity.
(c) "Governmental function" includes a governmental entity's failure to act.
(5) "Injury" means death, injury to a person, damage to or loss of property, or any other
injury that a person may suffer to his person or estate, that would be actionable if inflicted by a
private person or his agent.
(6) "Personal injury" means an injury of any kind other than property damage.
(7) "Political subdivision" means any county, city, town, school district, public transit
district, redevelopment agency, special improvement or taxing district, special district, an entity
created by an interlocal agreement adopted under Title 11, Chapter 13, Interlocal Cooperation
Act, or other governmental subdivision or public corporation.
(8) "Property damage" means injury to, or loss of, any right, title, estate, or interest in real
or personal property.
(9) "State" means the st