Enrolled Copy H.B. 54
1 INSURANCE REVISIONS
2 2021 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: James A. Dunnigan
5 Senate Sponsor: Curtis S. Bramble
6
7 LONG TITLE
8 General Description:
9 This bill amends the Insurance Code.
10 Highlighted Provisions:
11 This bill:
12 < amends references to "blanket insurance policy" for consistency;
13 < amends the definition of "captive insurance company";
14 < permits credit to a ceding insurer ceding to a foreign captive insurer under certain
15 conditions;
16 < provides that inland marine insurance that includes accident and health insurance is
17 subject to Title 31A, Chapter 22, Contracts in Specific Lines;
18 < removes provisions that the Utah Insurance Commissioner define "conspicuously"
19 in regards to certain forms;
20 < amend provisions related to mass marketed life or accident and health insurance;
21 < amends the scope of Title 31A, Chapter 22, Part 6, Accident and Health Insurance;
22 < allows reinstatement language of individual or franchise accident and health
23 insurance policies to be substantially, rather than verbatim, as provided in statute;
24 < amends provisions related to the coverage of emergency medical services;
25 < amends provisions related to notice of discontinuance of a group health benefit
26 plan;
27 < amends the minimum nonforfeiture amounts under the standard nonforfeiture law
28 for individual deferred annuities;
29 < amends reporting provisions related to the study of coverage for in vitro fertilization
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30 and genetic testings;
31 < amends provisions regarding group life insurance related to trustee groups and
32 conversion on termination of eligibility;
33 < amends provisions related to premium rates for accident and health insurance;
34 < amends provisions related to the issuance of a group insurance policy offering life
35 insurance to an association group;
36 < amends provisions regarding an association group to whom a group accident and
37 health insurance policy may be issued;
38 < permits the Utah Insurance Commissioner to adopt rules permitting or including
39 independent review of benefit determinations for long-term care insurance;
40 < amends the definition of "limited long-term care insurance" under the Limited
41 Long-term Care Insurance Act;
42 < amends provisions related to the lapse of a license under Title 31A, Chapter 23a,
43 Insurance Marketing - Licensing Producers, Consultants, and Reinsurance
44 Intermediaries;
45 < amends provisions of Title 31A, Chapter 23a, Insurance Marketing - Licensing
46 Producers, Consultants, and Reinsurance Intermediaries, in relation to inducements
47 and compensation;
48 < amends provisions regarding a title insurance producer's business;
49 < amends provisions related to certain trust obligations for a person authorized to
50 engage in the insurance business;
51 < amends the definition of "company adjuster";
52 < amends the coverage and limitations of guaranty association coverage;
53 < amends the minimum financial requirements for a bail bond agency license;
54 < amends the requirements for initial licensure and license renewal of a bail bond
55 agency license;
56 < amends required unimpaired paid-in capital and other capital for capital insurance
57 companies;
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58 < permits a captive insurance company to provide coverage for punitive damages
59 awarded under certain conditions;
60 < amends provisions allowing a captive insurance company to reinsure risks;
61 < amends provisions related to a captive insurance company's certificate of dormancy;
62 and
63 < makes technical and conforming changes.
64 Money Appropriated in this Bill:
65 None
66 Other Special Clauses:
67 None
68 Utah Code Sections Affected:
69 AMENDS:
70 31A-1-103, as last amended by Laws of Utah 2020, Chapter 32
71 31A-1-301, as last amended by Laws of Utah 2020, Chapter 32
72 31A-17-404, as last amended by Laws of Utah 2020, Chapter 32
73 31A-21-101, as last amended by Laws of Utah 2017, Chapter 363
74 31A-21-201, as last amended by Laws of Utah 2020, Chapter 32
75 31A-21-402, as last amended by Laws of Utah 2001, Chapter 116
76 31A-21-404, as last amended by Laws of Utah 2011, Chapter 62
77 31A-22-409, as last amended by Laws of Utah 2008, Chapters 345 and 382
78 31A-22-501, as last amended by Laws of Utah 2019, Chapter 193
79 31A-22-504, as last amended by Laws of Utah 2015, Chapter 244
80 31A-22-505, as last amended by Laws of Utah 2020, Chapter 32
81 31A-22-517, as last amended by Laws of Utah 2006, Chapter 175
82 31A-22-522, as last amended by Laws of Utah 2002, Chapter 308
83 31A-22-600, as last amended by Laws of Utah 2001, Chapter 116
84 31A-22-602, as last amended by Laws of Utah 2002, Chapter 308
85 31A-22-607, as last amended by Laws of Utah 2011, Chapter 284
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86 31A-22-608, as last amended by Laws of Utah 2001, Chapter 116
87 31A-22-612, as last amended by Laws of Utah 2018, Chapter 319
88 31A-22-618.6, as last amended by Laws of Utah 2018, Chapter 319
89 31A-22-618.7, as last amended by Laws of Utah 2017, Chapter 168 and renumbered
90 and amended by Laws of Utah 2017, Chapter 292
91 31A-22-618.8, as renumbered and amended by Laws of Utah 2017, Chapter 292
92 31A-22-627, as last amended by Laws of Utah 2019, Chapter 193
93 31A-22-654, as enacted by Laws of Utah 2020, Chapter 187
94 31A-22-701, as last amended by Laws of Utah 2019, Chapter 193
95 31A-22-716, as last amended by Laws of Utah 2017, Chapter 168
96 31A-22-717, as last amended by Laws of Utah 2004, Chapter 108
97 31A-22-1404, as last amended by Laws of Utah 1995, Chapter 344
98 31A-22-2002, as enacted by Laws of Utah 2020, Chapter 32
99 31A-23a-113, as last amended by Laws of Utah 2015, Chapter 244
100 31A-23a-201, as renumbered and amended by Laws of Utah 2003, Chapter 298
101 31A-23a-402.5, as last amended by Laws of Utah 2018, Chapter 181
102 31A-23a-406, as last amended by Laws of Utah 2019, Chapter 231
103 31A-23a-409, as last amended by Laws of Utah 2012, Chapter 253
104 31A-23a-501, as last amended by Laws of Utah 2017, Chapter 168
105 31A-26-102, as last amended by Laws of Utah 2018, Chapter 319
106 31A-28-103, as last amended by Laws of Utah 2018, Chapter 391
107 31A-35-404, as last amended by Laws of Utah 2016, Chapter 234
108 31A-35-406, as last amended by Laws of Utah 2016, Chapter 234
109 31A-37-102, as last amended by Laws of Utah 2019, Chapter 193
110 31A-37-202, as repealed and reenacted by Laws of Utah 2019, Chapter 193
111 31A-37-204, as last amended by Laws of Utah 2017, Chapter 168
112 31A-37-303, as last amended by Laws of Utah 2020, Chapter 32
113 31A-37-701, as last amended by Laws of Utah 2020, Chapter 32
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114 31A-45-501, as renumbered and amended by Laws of Utah 2017, Chapter 292
115
116 Be it enacted by the Legislature of the state of Utah:
117 Section 1. Section 31A-1-103 is amended to read:
118 31A-1-103. Scope and applicability of title.
119 (1) This title does not apply to:
120 (a) a retainer contract made by an attorney-at-law:
121 (i) with an individual client; and
122 (ii) under which fees are based on estimates of the nature and amount of services to be
123 provided to the specific client;
124 (b) a contract similar to a contract described in Subsection (1)(a) made with a group of
125 clients involved in the same or closely related legal matters;
126 (c) an arrangement for providing benefits that do not exceed a limited amount of
127 consultations, advice on simple legal matters, either alone or in combination with referral
128 services, or the promise of fee discounts for handling other legal matters;
129 (d) limited legal assistance on an informal basis involving neither an express
130 contractual obligation nor reasonable expectations, in the context of an employment,
131 membership, educational, or similar relationship;
132 (e) legal assistance by employee organizations to their members in matters relating to
133 employment;
134 (f) death, accident, health, or disability benefits provided to a person by an organization
135 or its affiliate if:
136 (i) the organization is tax exempt under Section 501(c)(3) of the Internal Revenue
137 Code and has had its principal place of business in Utah for at least five years;
138 (ii) the person is not an employee of the organization; and
139 (iii) (A) substantially all the person's time in the organization is spent providing
140 voluntary services:
141 (I) in furtherance of the organization's purposes;
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142 (II) for a designated period of time; and
143 (III) for which no compensation, other than expenses, is paid; or
144 (B) the time since the service under Subsection (1)(f)(iii)(A) was completed is no more
145 than 18 months; or
146 (g) a prepaid contract of limited duration that provides for scheduled maintenance only.
147 (2) (a) This title restricts otherwise legitimate business activity.
148 (b) What this title does not prohibit is permitted unless contrary to other provisions of
149 Utah law.
150 (3) Except as otherwise expressly provided, this title does not apply to:
151 (a) those activities of an insurer where state jurisdiction is preempted by Section 514 of
152 the federal Employee Retirement Income Security Act of 1974, as amended;
153 (b) ocean marine insurance;
154 (c) death, accident, health, or disability benefits provided by an organization if the
155 organization:
156 (i) has as the organization's principal purpose to achieve charitable, educational, social,
157 or religious objectives rather than to provide death, accident, health, or disability benefits;
158 (ii) does not incur a legal obligation to pay a specified amount; and
159 (iii) does not create reasonable expectations of receiving a specified amount on the part
160 of an insured person;
161 (d) other business specified in rules adopted by the commissioner on a finding that:
162 (i) the transaction of the business in this state does not require regulation for the
163 protection of the interests of the residents of this state; or
164 (ii) it would be impracticable to require compliance with this title;
165 (e) except as provided in Subsection (4), a transaction independently procured through
166 negotiations under Section 31A-15-104;
167 (f) self-insurance;
168 (g) reinsurance;
169 (h) subject to Subsection (5), an employee [and] or labor union group [or] insurance
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170 policy covering risks in this state or an employee or labor union blanket insurance policy
171 covering risks in this state, if:
172 (i) the policyholder exists primarily for purposes other than to procure insurance;
173 (ii) the policyholder:
174 (A) is not a resident of this state;
175 (B) is not a domestic corporation; or
176 (C) does not have the policyholder's principal office in this state;
177 (iii) no more than 25% of the certificate holders or insureds are residents of this state;
178 (iv) on request of the commissioner, the insurer files with the department a copy of the
179 policy and a copy of each form or certificate; and
180 (v) (A) the insurer agrees to pay premium taxes on the Utah portion of the insurer's
181 business, as if the insurer were authorized to do business in this state; and
182 (B) the insurer provides the commissioner with the security the commissioner
183 considers necessary for the payment of premium taxes under Title 59, Chapter 9, Taxation of
184 Admitted Insurers;
185 (i) to the extent provided in Subsection (6):
186 (i) a manufacturer's or seller's warranty; and
187 (ii) a manufacturer's or seller's service contract;
188 (j) except to the extent provided in Subsection (7), a public agency insurance mutual;
189 or
190 (k) except as provided in Chapter 6b, Guaranteed Asset Protection Waiver Act, a
191 guaranteed asset protection waiver.
192 (4) A transaction described in Subsection (3)(e) is subject to taxation under Section
193 31A-3-301.
194 (5) (a) After a hearing, the commissioner may order an insurer of certain group
195 insurance policies or blanket [contracts] insurance policies to transfer the Utah portion of the
196 business otherwise exempted under Subsection (3)(h) to an authorized insurer if the contracts
197 have been written by an unauthorized insurer.
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198 (b) If the commissioner finds that the conditions required for the exemption of a group
199 or blanket insurer are not satisfied or that adequate protection to residents of this state is not
200 provided, the commissioner may require:
201 (i) the insurer to be authorized to do business in this state; or
202 (ii) that any of the insurer's transactions be subject to this title.
203 (c) Subsection (3)(h) does not apply to a blanket insurance policy offering accident and
204 health insurance.
205 (6) (a) As used in Subsection (3)(i) and this Subsection (6):
206 (i) "manufacturer's or seller's service contract" means a service contract:
207 (A) made available by:
208 (I) a manufacturer of a product;
209 (II) a seller of a product; or
210 (III) an affiliate of a manufacturer or seller of a product;
211 (B) made available:
212 (I) on one or more specific products; or
213 (II) on products that are components of a system; and
214 (C) under which the person described in Subsection (6)(a)(i)(A) is liable for services to
215 be provided under the service contract including, if the manufacturer's or seller's service
216 contract designates, providing parts and labor;
217 (ii) "manufacturer's or seller's warranty" means the guaranty of:
218 (A) (I) the manufacturer of a product;
219 (II) a seller of a product; or
220 (III) an affiliate of a manufacturer or seller of a product;
221 (B) (I) on one or more specific products; or
222 (II) on products that are components of a system; and
223 (C) under which the person described in Subsection (6)(a)(ii)(A) is liable for services
224 to be provided under the warranty, including, if the manufacturer's or seller's warranty
225 designates, providing parts and labor; and
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226 (iii) "service contract" means the same as that term is defined in Section 31A-6a-101.
227 (b) A manufacturer's or seller's warranty may be designated as:
228 (i) a warranty;
229 (ii) a guaranty; or
230 (iii) a term similar to a term described in Subsection (6)(b)(i) or (ii).
231 (c) This title does not apply to:
232 (i) a manufacturer's or seller's warranty;
233 (ii) a manufacturer's or seller's service contract paid for with consideration that is in
234 addition to the consideration paid for the product itself; and
235 (iii) a service contract that is not a manufacturer's or seller's warranty or manufacturer's
236 or seller's service contract if:
237 (A) the service contract is paid for with consideration that is in addition to the
238 consideration paid for the product itself;
239 (B) the service contract is for the repair or maintenance of goods;
240 (C) the purchase price of the product is $3,700 or less;
241 (D) the product is not a motor vehicle; and
242 (E) the product is not the subject of a home warranty service contract.
243 (d) This title does not apply to a manufacturer's or seller's warranty or service contract
244 paid for with consideration that is in addition to the consideration paid for the product itself
245 regardless of whether the manufacturer's or seller's warranty or service contract is sold:
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