Utah 2023 Regular Session

Utah House Bill HB0410 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Enrolled Copy H.B. 410
	1	+	2nd Sub. H.B. 410
	2	+	LEGISLATIVE GENERAL COUNSEL
	3	+	6 Approved for Filing: A. Shewan 6
	4	+	6 02-23-23 1:24 PM 6
	5	+	H.B. 410
	6	+	2nd Sub. (Gray)
	7	+	Representative James A. Dunnigan proposes the following substitute bill:
2	8		1 INSURANCE AMENDMENTS
3	9		2 2023 GENERAL SESSION
4	10		3 STATE OF UTAH
5	11		4 Chief Sponsor: James A. Dunnigan
6	12		5 Senate Sponsor: Curtis S. Bramble
7	13		6
8	14		7LONG TITLE
9	15		8General Description:
10	16		9 This bill amends the Insurance Code, the Public Employees' Benefit and Insurance
11	17		10Program Act, and related provisions.
12	18		11Highlighted Provisions:
13	19		12 This bill:
14	20		13 <makes changes to provisions of the Insurance Code to:
15	21		14 Camend what is considered protected work papers when the commissioner
16	22		15conducts an examination;
17	23		16 Camend requirements for service of process;
18	24		17 Cincrease the amount of the annual appropriation for the Captive Insurance
19	25		18Division;
20	26		19 Camend the required process for insurers to file certain documents;
21	27		20 Cspecify the filing requirements for insurers to submit annual statements with the
22	28		21National Association of Insurance Commissioners;
23	29		22 Cprohibit insurance credit when a risk is ceded to an out-of-state captive;
24	30		23 Celiminate certain requirements for a title insurance licensee to submit certain
25	31		24filings;
26	32		25 Cenacts provisions requiring certain reporting for insurers that offer large
	33	+	HB0410S02 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	34	+	- 2 -
27	35		26employer health benefit plans;
28	36		27 Cadd a limited line insurance producer license for pet insurance;
29		-	28 Cpermit the Department of Insurance (department) to take action against licensees H.B. 410
30		-	Enrolled Copy
31		-	- 2 -
	37	+	28 Cpermit the Department of Insurance (department) to take action against licensees
32	38		29if the licensee enters a plea in abeyance to certain crimes;
33	39		30 Cclarify provisions related to title insurance companies' deposit of trust money in
34	40		31federally-insured depository institutions in Utah;
35	41		32 Celiminate the requirement that the Title and Escrow Commission (commission)
36	42		33establish in rule an amount of costs and expenses that are covered by the annual
37	43		34assessment on agency title insurance producers and title insurers (annual
38	44		35assessment);
39	45		36 Callow the commission to approve costs and expenses covered by the annual
40	46		37assessment for the prior fiscal year;
41	47		38 Celiminate the limitation on the amount of costs covered by the annual
42	48		39assessment;
43	49		40 Ccreate the State Mandated Insurer Payments Restricted Account (account) and
44	50		41provide that appropriations from the account are nonlapsing;
45	51		42 Camend requirements for the method of reporting insurance fraud;
46	52		43 Celiminate the requirement that an association of captives be in continuous
47	53		44existence for at least one year;
48	54		45 Cchange requirements for a captive insurer's paid-in capital;
49	55		46 Cprohibit insuring an award of punitive damages against a third party; and
50	56		47 Camend the requirements for pure captive insurance companies to which the
51	57		48commissioner issues a certificate of authority;
52	58		49 <amends provisions related to certain recommendations for benefit and rate
53	59		50adjustments for state employees that the Public Employees' Benefit and Insurance
54	60		51Program is required to submit;
55	61		52 <makes technical and conforming changes; and
56	62		53 <defines terms.
57	63		54Money Appropriated in this Bill:
58		-	55 None Enrolled Copy H.B. 410
	64	+	55 None
	65	+	56Other Special Clauses: 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
59	66		- 3 -
60		-	56Other Special Clauses:
61	67		57 None
62	68		58Utah Code Sections Affected:
63	69		59AMENDS:
64	70		60 31A-2-204, as last amended by Laws of Utah 2018, Chapter 319
65	71		61 31A-2-310, as last amended by Laws of Utah 1995, Chapter 20
66	72		62 31A-3-304, as last amended by Laws of Utah 2019, Chapter 193
67	73		63 31A-4-113.5, as last amended by Laws of Utah 2003, Chapter 252
68	74		64 31A-16-103, as last amended by Laws of Utah 2018, Chapter 319
69	75		65 31A-17-404, as last amended by Laws of Utah 2021, Chapter 252
70	76		66 31A-19a-209, as last amended by Laws of Utah 2015, Chapters 312, 330
71	77		67 31A-23a-106, as last amended by Laws of Utah 2015, Chapter 330
72	78		68 31A-23a-111, as last amended by Laws of Utah 2022, Chapter 198
73	79		69 31A-23a-406, as last amended by Laws of Utah 2021, Chapter 252
74	80		70 31A-23a-409, as last amended by Laws of Utah 2021, Chapter 252
75	81		71 31A-23a-415, as last amended by Laws of Utah 2020, Chapter 32
76	82		72 31A-23b-401, as last amended by Laws of Utah 2020, Chapter 32
77	83		73 31A-25-208, as last amended by Laws of Utah 2020, Chapter 32
78	84		74 31A-26-213, as last amended by Laws of Utah 2020, Chapter 32
79	85		75 31A-30-118, as last amended by Laws of Utah 2020, Chapter 32
80	86		76 31A-31-110, as last amended by Laws of Utah 2008, Chapter 150
81	87		77 31A-35-504, as last amended by Laws of Utah 2021, Second Special Session, Chapter 4
82	88		78 31A-37-102, as last amended by Laws of Utah 2021, Chapter 252
83	89		79 31A-37-202, as last amended by Laws of Utah 2021, Chapter 252
84	90		80 31A-37-204, as last amended by Laws of Utah 2021, Chapter 252
85	91		81 49-20-401, as last amended by Laws of Utah 2022, Chapter 302
86		-	82 63J-1-602.1, as last amended by Laws of Utah 2022, Chapters 48, 191, 255, 335, 415, H.B. 410
87		-	Enrolled Copy
88		-	- 4 -
	92	+	82 63J-1-602.1, as last amended by Laws of Utah 2022, Chapters 48, 191, 255, 335, 415,
89	93		83and 451
90	94		84ENACTS:
91	95		85 31A-22-728, Utah Code Annotated 1953
92	96		86
93		-	87Be it enacted by the Legislature of the state of Utah:
	97	+	87Be it enacted by the Legislature of the state of Utah: 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	98	+	- 4 -
94	99		88 Section 1. Section 31A-2-204 is amended to read:
95	100		89 31A-2-204. Conducting examinations.
96	101		90 (1) As used in this section, "work papers" means a record that is created or relied upon:
97	102		91 (a) during the course of an examination conducted under Section 31A-2-203; [or]
98	103		92 (b) in drafting an examination report[.]; or
99	104		93 (c) in requesting, responding to a request, or reviewing a response to a request under
100	105		94Section 31A-2-202.
101	106		95 (2) (a) For each examination under Section 31A-2-203, the commissioner shall issue an
102	107		96order:
103	108		97 (i) stating the scope of the examination; and
104	109		98 (ii) designating the examiner in charge.
105	110		99 (b) The commissioner need not give advance notice of an examination to an examinee.
106	111		100 (c) The examiner in charge shall give the examinee a copy of the order issued under
107	112		101this Subsection (2).
108	113		102 (d) (i) The commissioner may alter the scope or nature of an examination at any time
109	114		103without advance notice to the examinee.
110	115		104 (ii) If the commissioner amends an order described in this Subsection (2), the
111	116		105commissioner shall provide a copy of any amended order to the examinee.
112	117		106 (e) Statements in the commissioner's examination order concerning examination scope
113	118		107are for the examiner's guidance only.
114	119		108 (f) Examining relevant matters not mentioned in an order issued under this Subsection
115		-	109(2) is not a violation of this title. Enrolled Copy H.B. 410
116		-	- 5 -
	120	+	109(2) is not a violation of this title.
117	121		110 (3) The commissioner shall, whenever practicable, cooperate with the insurance
118	122		111regulators of other states by conducting joint examinations of:
119	123		112 (a) multistate insurers doing business in this state; or
120	124		113 (b) other multistate licensees doing business in this state.
121	125		114 (4) An examiner authorized by the commissioner shall, when necessary to the purposes
122	126		115of the examination, have access at all reasonable hours to the premises and to any books,
123	127		116records, files, securities, documents, or property of:
124	128		117 (a) the examinee; and
125		-	118 (b) any of the following if the premises, books, records, files, securities, documents, or
	129	+	118 (b) any of the following if the premises, books, records, files, securities, documents, or 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	130	+	- 5 -
126	131		119property relate to the affairs of the examinee:
127	132		120 (i) an officer of the examinee;
128	133		121 (ii) any other person who:
129	134		122 (A) has executive authority over the examinee; or
130	135		123 (B) is in charge of any segment of the examinee's affairs; or
131	136		124 (iii) any affiliate of the examinee under Subsection 31A-2-203(1)(b).
132	137		125 (5) (a) The officers, employees, and agents of the examinee and of persons under
133	138		126Subsection 31A-2-203(1)(b) shall comply with every reasonable request of the examiners for
134	139		127assistance in any matter relating to the examination.
135	140		128 (b) A person may not obstruct or interfere with the examination except by legal
136	141		129process.
137	142		130 (6) If the commissioner finds the accounts or records to be inadequate for proper
138	143		131examination of the condition and affairs of the examinee or improperly kept or posted, the
139	144		132commissioner may employ experts to rewrite, post, or balance the accounts or records at the
140	145		133expense of the examinee.
141	146		134 (7) (a) The examiner in charge of an examination shall make a report of the
142	147		135examination no later than 60 days after the completion of the examination that shall include:
143		-	136 (i) the information and analysis ordered under Subsection (2); and H.B. 410
144		-	Enrolled Copy
145		-	- 6 -
	148	+	136 (i) the information and analysis ordered under Subsection (2); and
146	149		137 (ii) the examiner's recommendations.
147	150		138 (b) At the option of the examiner in charge, preparation of the report may include
148	151		139conferences with the examinee or representatives of the examinee.
149	152		140 (c) The report is confidential until the report becomes a public document under
150	153		141Subsection (8), except the commissioner may use information from the report as a basis for
151	154		142action under Chapter 27a, Insurer Receivership Act.
152	155		143 (8) (a) The commissioner shall serve a copy of the examination report described in
153	156		144Subsection (7) upon the examinee.
154	157		145 (b) Within 20 days after service, the examinee shall:
155	158		146 (i) accept the examination report as written; or
156	159		147 (ii) request agency action to modify the examination report.
157	160		148 (c) The report is considered accepted under this Subsection (8) if the examinee does
158		-	149not file a request for agency action to modify the report within 20 days after service of the
	161	+	149not file a request for agency action to modify the report within 20 days after service of the 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	162	+	- 6 -
159	163		150report.
160	164		151 (d) If the examination report is accepted:
161	165		152 (i) the examination report immediately becomes a public document; and
162	166		153 (ii) the commissioner shall distribute the examination report to all jurisdictions in
163	167		154which the examinee is authorized to do business.
164	168		155 (e) (i) Any adjudicative proceeding held as a result of the examinee's request for
165	169		156agency action shall, upon the examinee's demand, be closed to the public, except that the
166	170		157commissioner need not exclude any participating examiner from this closed hearing.
167	171		158 (ii) Within 20 days after the hearing held under this Subsection (8)(e), the
168	172		159commissioner shall:
169	173		160 (A) adopt the examination report with any necessary modifications; and
170	174		161 (B) serve a copy of the adopted report upon the examinee.
171	175		162 (iii) Unless the examinee seeks judicial relief, the adopted examination report:
172		-	163 (A) shall become a public document 10 days after service; and Enrolled Copy H.B. 410
173		-	- 7 -
	176	+	163 (A) shall become a public document 10 days after service; and
174	177		164 (B) may be distributed as described in this section.
175	178		165 (f) Notwithstanding Title 63G, Chapter 4, Administrative Procedures Act, to the extent
176	179		166that this section is in conflict with Title 63G, Chapter 4, Administrative Procedures Act, this
177	180		167section governs:
178	181		168 (i) a request for agency action under this section; or
179	182		169 (ii) adjudicative proceeding under this section.
180	183		170 (9) The examinee shall promptly furnish copies of the adopted examination report
181	184		171described in Subsection (8) to each member of the examinee's board.
182	185		172 (10) After an examination report becomes a public document under Subsection (8), the
183	186		173commissioner may furnish, without cost or at a reasonable price set under Section 31A-3-103,
184	187		174a copy of the examination report to interested persons, including:
185	188		175 (a) a member of the board of the examinee; or
186	189		176 (b) one or more newspapers in this state.
187	190		177 (11) (a) In a proceeding by or against the examinee, or any officer or agent of the
188	191		178examinee, the examination report as adopted by the commissioner is admissible as evidence of
189	192		179the facts stated in the report.
190		-	180 (b) In any proceeding commenced under Chapter 27a, Insurer Receivership Act, the
	193	+	180 (b) In any proceeding commenced under Chapter 27a, Insurer Receivership Act, the 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	194	+	- 7 -
191	195		181examination report, whether adopted by the commissioner or not, is admissible as evidence of
192	196		182the facts stated in the examination report.
193	197		183 (12) Work papers are protected records under Title 63G, Chapter 2, Government
194	198		184Records Access and Management Act.
195	199		185 Section 2. Section 31A-2-310 is amended to read:
196	200		186 31A-2-310. Procedure for service of process through state officer.
197	201		187 (1) Service upon the commissioner or lieutenant governor under Section 31A-2-309 is
198	202		188service on the principal, if:
199	203		189 (a) [two copies of the process] the following are delivered personally or to the office of
200		-	190the official designated in Section 31A-2-309[, and]: H.B. 410
201		-	Enrolled Copy
202		-	- 8 -
	204	+	190the official designated in Section 31A-2-309[, and]:
203	205		191 (i) two copies of the process to be served; and
204	206		192 (ii) a certificate of proof of service that meets the requirements of Subsection (3), dated
205	207		193and signed by the official designated in Section 31A-2-309; and
206	208		194 (b) that official mails a copy of the process to the person to be served according to
207	209		195Subsection (2)(b).
208	210		196 (2) (a) The commissioner and the lieutenant governor shall give receipts for and keep
209	211		197records of all process served through them.
210	212		198 (b) The commissioner or the lieutenant governor shall immediately send by certified
211	213		199mail one copy of the process received to the person to be served at that person's last known
212	214		200principal place of business, residence, or post-office address. The commissioner or the
213	215		201lieutenant governor shall retain the other copy for his files.
214	216		202 (c) No plaintiff or complainant may take a judgment by default in any proceeding in
215	217		203which process is served under this section and Section 31A-2-309 until the expiration of 40
216	218		204days from the date of service of process under Subsection (2)(b).
217	219		205 (3) Proof of service shall be evidenced by a certificate by the official designated in
218	220		206Section 31A-2-309, showing service made upon him and mailing by him, and attached to a
219	221		207copy of the process presented to him for that purpose.
220	222		208 (4) When process is served under this section, the words "twenty days" in the first
221	223		209sentence of Rule 12(a) of the Utah Rules of Civil Procedure shall be changed to read "forty
222	224		210days."
223		-	211 Section 3. Section 31A-3-304 is amended to read:
	225	+	211 Section 3. Section 31A-3-304 is amended to read: 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	226	+	- 8 -
224	227		212 31A-3-304. Annual fees -- Other taxes or fees prohibited -- Captive Insurance
225	228		213Restricted Account.
226	229		214 (1) (a) A captive insurance company shall pay an annual fee imposed under this section
227	230		215to obtain or renew a certificate of authority.
228	231		216 (b) The commissioner shall:
229		-	217 (i) determine the annual fee pursuant to Section 31A-3-103; and Enrolled Copy H.B. 410
230		-	- 9 -
	232	+	217 (i) determine the annual fee pursuant to Section 31A-3-103; and
231	233		218 (ii) consider whether the annual fee is competitive with fees imposed by other states on
232	234		219captive insurance companies.
233	235		220 (2) A captive insurance company that fails to pay the fee required by this section is
234	236		221subject to the relevant sanctions of this title.
235	237		222 (3) (a) A captive insurance company that pays one of the following fees is exempt from
236	238		223Title 59, Chapter 7, Corporate Franchise and Income Taxes, and Title 59, Chapter 9, Taxation
237	239		224of Admitted Insurers:
238	240		225 (i) a fee under this section;
239	241		226 (ii) a fee under Chapter 37, Captive Insurance Companies Act; or
240	242		227 (iii) a fee under Chapter 37a, Special Purpose Financial Captive Insurance Company
241	243		228Act.
242	244		229 (b) The state or a county, city, or town within the state may not levy or collect an
243	245		230occupation tax or other fee or charge not described in Subsections (3)(a)(i) through (iii) against
244	246		231a captive insurance company.
245	247		232 (c) The state may not levy, assess, or collect a withdrawal fee under Section 31A-4-115
246	248		233against a captive insurance company.
247	249		234 (4) A captive insurance company shall pay the fee imposed by this section to the
248	250		235commissioner by June 1 of each year.
249	251		236 (5) (a) Money received pursuant to a fee described in Subsection (3)(a) shall be
250	252		237deposited into the Captive Insurance Restricted Account.
251	253		238 (b) There is created in the General Fund a restricted account known as the "Captive
252	254		239Insurance Restricted Account."
253	255		240 (c) The Captive Insurance Restricted Account shall consist of the fees described in
254	256		241Subsection (3)(a).
255		-	242 (d) The commissioner shall administer the Captive Insurance Restricted Account.
	257	+	242 (d) The commissioner shall administer the Captive Insurance Restricted Account. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	258	+	- 9 -
256	259		243Subject to appropriations by the Legislature, the commissioner shall use the money deposited
257		-	244into the Captive Insurance Restricted Account to: H.B. 410
258		-	Enrolled Copy
259		-	- 10 -
	260	+	244into the Captive Insurance Restricted Account to:
260	261		245 (i) administer and enforce:
261	262		246 (A) Chapter 37, Captive Insurance Companies Act; and
262	263		247 (B) Chapter 37a, Special Purpose Financial Captive Insurance Company Act; and
263	264		248 (ii) promote the captive insurance industry in Utah.
264	265		249 (e) An appropriation from the Captive Insurance Restricted Account is nonlapsing,
265	266		250except that at the end of each fiscal year, money received by the commissioner in excess of the
266	267		251following shall be treated as free revenue in the General Fund:
267	268		252 (i) for fiscal year 2018-2019 and subsequent fiscal years, in excess of $1,600,000;
268	269		253[and]
269	270		254 (ii) for fiscal year 2019-2020 and subsequent fiscal years, in excess of $1,450,000[.];
270	271		255and
271	272		256 (iii) for fiscal year 2023-2024 and subsequent fiscal years, in excess of $1,650,000.
272	273		257 Section 4. Section 31A-4-113.5 is amended to read:
273	274		258 31A-4-113.5. Filing requirements -- National Association of Insurance
274	275		259Commissioners.
275	276		260 (1) (a) Each domestic, foreign, and alien insurer who is authorized to transact insurance
276	277		261business in this state shall annually[, on or before March 1, file with the National Association
277	278		262of Insurance Commissioners] file with the NAIC a copy of the insurer's:
278	279		263 (i) annual statement convention blank on or before March 1; [and]
279	280		264 (ii) market conduct annual statements:
280	281		265 (A) on or before April 30, for all lines of business except health; and
281	282		266 (B) on or before June 30, for the health line of business; and
282	283		267 [(ii)] (iii) any additional filings required by the commissioner for the preceding year.
283	284		268 (b) (i) The information filed with the [National Association of Insurance
284	285		269Commissioners] NAIC under Subsection [(1)(a)] (1)(a)(i) shall:
285	286		270 [(i)] (A) [be in the format and scope required by the commissioner; and] be prepared in
286		-	271accordance with the NAIC's: Enrolled Copy H.B. 410
287		-	- 11 -
	287	+	271accordance with the NAIC's:
288	288		272 (I) annual statement instructions; and
289		-	273 (II) Accounting Practices and Procedures Manual; and
	289	+	273 (II) Accounting Practices and Procedures Manual; and 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	290	+	- 10 -
290	291		274 [(ii)] (B) include:
291	292		275 [(A)] (I) the signed jurat page; and
292	293		276 [(B)] (II) the actuarial certification.
293	294		277 (ii) An insurer shall file with the NAIC amendments and addenda to information filed
294	295		278with the commissioner under Subsection (1)(a)(i).
295	296		279 (c) [Any amendments and addendums to an annual statement that are filed with the
296	297		280commissioner shall be filed by the insurer with the National Association of Insurance
297	298		281Commissioners.] The information filed with the NAIC under Subsection (1)(a)(ii) shall be
298	299		282prepared in accordance with the NAIC's Market Conduct Annual Statement Industry User
299	300		283Guide.
300	301		284 (d) At the time an insurer makes a filing under this Subsection (1), the insurer shall pay
301	302		285any filing fees assessed by the [National Association of Insurance Commissioners] NAIC.
302	303		286 (e) A foreign insurer that is domiciled in a state that has a law substantially similar to
303	304		287this section shall be considered to be in compliance with this section.
304	305		288 (2) All financial analysis ratios and examination synopses concerning insurance
305	306		289companies that are submitted to the department by the Insurance Regulatory Information
306	307		290System are confidential and may not be disclosed by the department.
307	308		291 (3) The commissioner may suspend, revoke, or refuse to renew the certificate of
308	309		292authority of any insurer failing to:
309	310		293 (a) [file the annual statement as required by] submit the filings under Subsection (1)(a)
310	311		294when due or within any extension of time granted for good cause by:
311	312		295 (i) the commissioner; or
312	313		296 (ii) the [National Association of Insurance Commissioners] NAIC; or
313	314		297 (b) pay by the time specified in Subsection (3)(a) a fee the insurer is required to pay
314		-	298under this section to: H.B. 410
315		-	Enrolled Copy
316		-	- 12 -
	315	+	298under this section to:
317	316		299 (i) the commissioner; or
318	317		300 (ii) the [National Association of Insurance Commissioners] NAIC.
319	318		301 Section 5. Section 31A-16-103 is amended to read:
320	319		302 31A-16-103. Acquisition of control of, divestiture of control of, or merger with
321	320		303domestic insurer.
322		-	304 (1) (a) A person may not take the actions described in Subsection (1)(b) or (c) unless,
	321	+	304 (1) (a) A person may not take the actions described in Subsection (1)(b) or (c) unless, 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	322	+	- 11 -
323	323		305at the time any offer, request, or invitation is made or any such agreement is entered into, or
324	324		306prior to the acquisition of securities if no offer or agreement is involved:
325	325		307 (i) the person files with the commissioner a statement containing the information
326	326		308required by this section;
327	327		309 (ii) the person provides a copy of the statement described in Subsection (1)(a)(i) to the
328	328		310insurer; and
329	329		311 (iii) the commissioner approves the offer, request, invitation, agreement, or acquisition.
330	330		312 (b) Unless the person complies with Subsection (1)(a), a person other than the issuer
331	331		313may not make a tender offer for, a request or invitation for tenders of, or enter into any
332	332		314agreement to exchange securities, or seek to acquire or acquire in the open market or otherwise,
333	333		315any voting security of a domestic insurer if after the acquisition, the person would directly,
334	334		316indirectly, by conversion, or by exercise of any right to acquire be in control of the insurer.
335	335		317 (c) Unless the person complies with Subsection (1)(a), a person may not enter into an
336	336		318agreement to merge with or otherwise to acquire control of:
337	337		319 (i) a domestic insurer; or
338	338		320 (ii) any person controlling a domestic insurer.
339	339		321 (d) For purposes of this section, a controlling person of a domestic insurer seeking to
340	340		322divest its controlling interest in the domestic insurer, in any manner, shall file with the
341	341		323commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least
342	342		32430 days before the cessation of control. The commissioner shall determine those instances in
343		-	325which the one or more persons seeking to divest or to acquire a controlling interest in an Enrolled Copy H.B. 410
344		-	- 13 -
	343	+	325which the one or more persons seeking to divest or to acquire a controlling interest in an
345	344		326insurer, will be required to file for and obtain approval of the transaction. The information
346	345		327shall remain confidential until the conclusion of the transaction unless the commissioner, in the
347	346		328commissioner's discretion, determines that confidential treatment will interfere with
348	347		329enforcement of this section. If the statement referred to in Subsection (1)(a) is otherwise filed,
349	348		330this Subsection (1)(d) does not apply.
350	349		331 (e) With respect to a transaction subject to this section, the acquiring person shall also
351	350		332file a pre-acquisition notification with the commissioner, which shall contain the information
352	351		333set forth in Section 31A-16-104.5. A failure to file the notification may be subject to penalties
353	352		334specified in Section 31A-16-104.5.
354		-	335 (f) (i) For purposes of this section, a domestic insurer includes any person controlling a
	353	+	335 (f) (i) For purposes of this section, a domestic insurer includes any person controlling a 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	354	+	- 12 -
355	355		336domestic insurer unless the person as determined by the commissioner is either directly or
356	356		337through its affiliates primarily engaged in business other than the business of insurance.
357	357		338 (ii) The controlling person described in Subsection (1)(f)(i) shall file with the
358	358		339commissioner a preacquisition notification containing the information required in Subsection
359	359		340(2) 30 calendar days before the proposed effective date of the acquisition.
360	360		341 (iii) For the purposes of this section, "person" does not include any securities broker
361	361		342that in the usual and customary brokers function holds less than 20% of:
362	362		343 (A) the voting securities of an insurance company; or
363	363		344 (B) any person that controls an insurance company.
364	364		345 (iv) This section applies to all domestic insurers and other entities licensed under:
365	365		346 (A) Chapter 5, Domestic Stock and Mutual Insurance Corporations;
366	366		347 (B) Chapter 7, Nonprofit Health Service Insurance Corporations;
367	367		348 (C) Chapter 8, Health Maintenance Organizations and Limited Health Plans;
368	368		349 (D) Chapter 9, Insurance Fraternals; and
369	369		350 (E) Chapter 11, Motor Clubs.
370	370		351 (g) (i) An agreement for acquisition of control or merger as contemplated by this
371		-	352Subsection (1) is not valid or enforceable unless the agreement: H.B. 410
372		-	Enrolled Copy
373		-	- 14 -
	371	+	352Subsection (1) is not valid or enforceable unless the agreement:
374	372		353 (A) is in writing; and
375	373		354 (B) includes a provision that the agreement is subject to the approval of the
376	374		355commissioner upon the filing of any applicable statement required under this chapter.
377	375		356 (ii) A written agreement for acquisition or control that includes the provision described
378	376		357in Subsection (1)(g)(i) satisfies the requirements of this Subsection (1).
379	377		358 (2) The statement to be filed with the commissioner under Subsection (1) shall be
380	378		359made under oath or affirmation and shall contain the following information:
381	379		360 (a) the name and address of the "acquiring party," which means each person by whom
382	380		361or on whose behalf the merger or other acquisition of control referred to in Subsection (1) is to
383	381		362be effected; and
384	382		363 (i) if the person is an individual:
385	383		364 (A) the person's principal occupation;
386	384		365 (B) a listing of all offices and positions held by the person during the past five years;
387		-	366and
	385	+	366and 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	386	+	- 13 -
388	387		367 (C) any conviction of crimes other than minor traffic violations during the past 10
389	388		368years; and
390	389		369 (ii) if the person is not an individual:
391	390		370 (A) a report of the nature of its business operations during:
392	391		371 (I) the past five years; or
393	392		372 (II) for any lesser period as the person and any of its predecessors has been in
394	393		373existence;
395	394		374 (B) an informative description of the business intended to be done by the person and
396	395		375the person's subsidiaries;
397	396		376 (C) a list of all individuals who are or who have been selected to become directors or
398	397		377executive officers of the person, or individuals who perform, or who will perform functions
399	398		378appropriate to such positions; and
400		-	379 (D) for each individual described in Subsection (2)(a)(ii)(C), the information required Enrolled Copy H.B. 410
401		-	- 15 -
	399	+	379 (D) for each individual described in Subsection (2)(a)(ii)(C), the information required
402	400		380by Subsection (2)(a)(i) for each individual;
403	401		381 (b) (i) the source, nature, and amount of the consideration used or to be used in
404	402		382effecting the merger or acquisition of control;
405	403		383 (ii) a description of any transaction in which funds were or are to be obtained for the
406	404		384purpose of effecting the merger or acquisition of control, including any pledge of:
407	405		385 (A) the insurer's stock; or
408	406		386 (B) the stock of any of the insurer's subsidiaries or controlling affiliates; and
409	407		387 (iii) the identity of persons furnishing the consideration;
410	408		388 (c) (i) fully audited financial information, or other financial information considered
411	409		389acceptable by the commissioner, of the earnings and financial condition of each acquiring party
412	410		390for:
413	411		391 (A) the preceding five fiscal years of each acquiring party; or
414	412		392 (B) any lesser period the acquiring party and any of its predecessors shall have been in
415	413		393existence; and
416	414		394 (ii) unaudited information:
417	415		395 (A) similar to the information described in Subsection (2)(c)(i); and
418	416		396 (B) prepared within the 90 days prior to the filing of the statement;
419		-	397 (d) any plans or proposals which each acquiring party may have to:
	417	+	397 (d) any plans or proposals which each acquiring party may have to: 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	418	+	- 14 -
420	419		398 (i) liquidate the insurer;
421	420		399 (ii) sell its assets;
422	421		400 (iii) merge or consolidate the insurer with any person; or
423	422		401 (iv) make any other material change in the insurer's:
424	423		402 (A) business;
425	424		403 (B) corporate structure; or
426	425		404 (C) management;
427	426		405 (e) (i) the number of shares of any security referred to in Subsection (1) that each
428		-	406acquiring party proposes to acquire; H.B. 410
429		-	Enrolled Copy
430		-	- 16 -
	427	+	406acquiring party proposes to acquire;
431	428		407 (ii) the terms of the offer, request, invitation, agreement, or acquisition referred to in
432	429		408Subsection (1); and
433	430		409 (iii) a statement as to the method by which the fairness of the proposal was arrived at;
434	431		410 (f) the amount of each class of any security referred to in Subsection (1) that:
435	432		411 (i) is beneficially owned; or
436	433		412 (ii) concerning which there is a right to acquire beneficial ownership by each acquiring
437	434		413party;
438	435		414 (g) a full description of any contract, arrangement, or understanding with respect to any
439	436		415security referred to in Subsection (1) in which any acquiring party is involved, including:
440	437		416 (i) the transfer of any of the securities;
441	438		417 (ii) joint ventures;
442	439		418 (iii) loan or option arrangements;
443	440		419 (iv) puts or calls;
444	441		420 (v) guarantees of loans;
445	442		421 (vi) guarantees against loss or guarantees of profits;
446	443		422 (vii) division of losses or profits; or
447	444		423 (viii) the giving or withholding of proxies;
448	445		424 (h) a description of the purchase by any acquiring party of any security referred to in
449	446		425Subsection (1) during the 12 calendar months preceding the filing of the statement including:
450	447		426 (i) the dates of purchase;
451	448		427 (ii) the names of the purchasers; and
452		-	428 (iii) the consideration paid or agreed to be paid for the purchase;
	449	+	428 (iii) the consideration paid or agreed to be paid for the purchase; 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	450	+	- 15 -
453	451		429 (i) a description of:
454	452		430 (i) any recommendations to purchase by any acquiring party any security referred to in
455	453		431Subsection (1) made during the 12 calendar months preceding the filing of the statement; or
456	454		432 (ii) any recommendations made by anyone based upon interviews or at the suggestion
457		-	433of the acquiring party; Enrolled Copy H.B. 410
458		-	- 17 -
	455	+	433of the acquiring party;
459	456		434 (j) (i) copies of all tender offers for, requests for, or invitations for tenders of, exchange
460	457		435offers for, and agreements to acquire or exchange any securities referred to in Subsection (1);
461	458		436and
462	459		437 (ii) if distributed, copies of additional soliciting material relating to the transactions
463	460		438described in Subsection (2)(j)(i);
464	461		439 (k) (i) the term of any agreement, contract, or understanding made with, or proposed to
465	462		440be made with, any broker-dealer as to solicitation of securities referred to in Subsection (1) for
466	463		441tender; and
467	464		442 (ii) the amount of any fees, commissions, or other compensation to be paid to
468	465		443broker-dealers with regard to any agreement, contract, or understanding described in
469	466		444Subsection (2)(k)(i);
470	467		445 (l) an agreement by the person required to file the statement referred to in Subsection
471	468		446(1) that it will provide the annual report, specified in Section 31A-16-105, for so long as
472	469		447control exists;
473	470		448 (m) an acknowledgment by the person required to file the statement referred to in
474	471		449Subsection (1) that the person and all subsidiaries within its control in the insurance holding
475	472		450company system will provide information to the commissioner upon request as necessary to
476	473		451evaluate enterprise risk to the insurer; and
477	474		452 (n) any additional information the commissioner requires by rule, which the
478	475		453commissioner determines to be:
479	476		454 (i) necessary or appropriate for the protection of policyholders of the insurer; or
480	477		455 (ii) in the public interest.
481	478		456 (3) (a) The department may request:
482	479		457 [(a)] (i) criminal background information maintained pursuant to Title 53, Chapter 10,
483	480		458Part 2, Bureau of Criminal Identification, from the Bureau of Criminal Identification; and
484		-	459 (ii) complete Federal Bureau of Investigation criminal background checks through the
485		-	460national criminal history system. H.B. 410
486		-	Enrolled Copy
487		-	- 18 -
	481	+	459 (ii) complete Federal Bureau of Investigation criminal background checks through the 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	482	+	- 16 -
	483	+	460national criminal history system.
488	484		461 (b) Information obtained by the department from the review of criminal history records
489	485		462received under Subsection (3)(a) shall be used by the department for the purpose of:
490	486		463 (i) verifying the information in Subsection (2)(a)(i);
491	487		464 (ii) determining the integrity of persons who would control the operation of an insurer;
492	488		465and
493	489		466 (iii) preventing persons who violate 18 U.S.C. Sec. 1033 from engaging in the business
494	490		467of insurance in the state.
495	491		468 (c) If the department requests the criminal background information, the department
496	492		469shall:
497	493		470 (i) pay to the Department of Public Safety the costs incurred by the Department of
498	494		471Public Safety in providing the department criminal background information under Subsection
499	495		472(3)(a)(i);
500	496		473 (ii) pay to the Federal Bureau of Investigation the costs incurred by the Federal Bureau
501	497		474of Investigation in providing the department criminal background information under
502	498		475Subsection (3)(a)(ii); and
503	499		476 (iii) charge the person required to file the statement referred to in Subsection (1) a fee
504	500		477equal to the aggregate of Subsections (3)(c)(i) and (ii).
505	501		478 (4) (a) If the source of the consideration under Subsection (2)(b)(i) is a loan made in
506	502		479the lender's ordinary course of business, the identity of the lender shall remain confidential, if
507	503		480the person filing the statement so requests.
508	504		481 (b) (i) Under Subsection (2)(e), the commissioner may require a statement of the
509	505		482adjusted book value assigned by the acquiring party to each security in arriving at the terms of
510	506		483the offer.
511	507		484 (ii) For purposes of this Subsection (4)(b), "adjusted book value" means each security's
512	508		485proportional interest in the capital and surplus of the insurer with adjustments that reflect:
513	509		486 (A) market conditions;
514		-	487 (B) business in force; and Enrolled Copy H.B. 410
515		-	- 19 -
	510	+	487 (B) business in force; and
516	511		488 (C) other intangible assets or liabilities of the insurer.
517	512		489 (c) The description required by Subsection (2)(g) shall identify the persons with whom
518		-	490the contracts, arrangements, or understandings have been entered into.
	513	+	490the contracts, arrangements, or understandings have been entered into. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	514	+	- 17 -
519	515		491 (5) (a) If the person required to file the statement referred to in Subsection (1) is a
520	516		492partnership, limited partnership, syndicate, or other group, the commissioner may require that
521	517		493all the information called for by Subsection (2), (3), or (4) shall be given with respect to each:
522	518		494 (i) partner of the partnership or limited partnership;
523	519		495 (ii) member of the syndicate or group; and
524	520		496 (iii) person who controls the partner or member.
525	521		497 (b) If any partner, member, or person referred to in Subsection (5)(a) is a corporation,
526	522		498or if the person required to file the statement referred to in Subsection (1) is a corporation, the
527	523		499commissioner may require that the information called for by Subsection (2) shall be given with
528	524		500respect to:
529	525		501 (i) the corporation;
530	526		502 (ii) each officer and director of the corporation; and
531	527		503 (iii) each person who is directly or indirectly the beneficial owner of more than 10% of
532	528		504the outstanding voting securities of the corporation.
533	529		505 (6) If any material change occurs in the facts set forth in the statement filed with the
534	530		506commissioner and sent to the insurer pursuant to Subsection (2), an amendment setting forth
535	531		507the change, together with copies of all documents and other material relevant to the change,
536	532		508shall be filed with the commissioner and sent to the insurer within two business days after the
537	533		509filing person learns of such change.
538	534		510 (7) If any offer, request, invitation, agreement, or acquisition referred to in Subsection
539	535		511(1) is proposed to be made by means of a registration statement under the Securities Act of
540	536		5121933, or under circumstances requiring the disclosure of similar information under the
541	537		513Securities Exchange Act of 1934, or under a state law requiring similar registration or
542		-	514disclosure, a person required to file the statement referred to in Subsection (1) may use copies H.B. 410
543		-	Enrolled Copy
544		-	- 20 -
	538	+	514disclosure, a person required to file the statement referred to in Subsection (1) may use copies
545	539		515of any registration or disclosure documents in furnishing the information called for by the
546	540		516statement.
547	541		517 (8) (a) The commissioner shall approve any merger or other acquisition of control
548	542		518referred to in Subsection (1), unless the commissioner finds that:
549	543		519 (i) after the change of control, the domestic insurer referred to in Subsection (1) would
550	544		520not be able to satisfy the requirements for the issuance of a license to write the line or lines of
551		-	521insurance for which it is presently licensed;
	545	+	521insurance for which it is presently licensed; 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	546	+	- 18 -
552	547		522 (ii) the effect of the merger or other acquisition of control would:
553	548		523 (A) substantially lessen competition in insurance in this state; or
554	549		524 (B) tend to create a monopoly in insurance;
555	550		525 (iii) the financial condition of any acquiring party might:
556	551		526 (A) jeopardize the financial stability of the insurer; or
557	552		527 (B) prejudice the interest of:
558	553		528 (I) its policyholders; or
559	554		529 (II) any remaining securityholders who are unaffiliated with the acquiring party;
560	555		530 (iv) the terms of the offer, request, invitation, agreement, or acquisition referred to in
561	556		531Subsection (1) are unfair and unreasonable to the securityholders of the insurer;
562	557		532 (v) the plans or proposals which the acquiring party has to liquidate the insurer, sell its
563	558		533assets, or consolidate or merge it with any person, or to make any other material change in its
564	559		534business or corporate structure or management, are:
565	560		535 (A) unfair and unreasonable to policyholders of the insurer; and
566	561		536 (B) not in the public interest; or
567	562		537 (vi) the competence, experience, and integrity of those persons who would control the
568	563		538operation of the insurer are such that it would not be in the interest of the policyholders of the
569	564		539insurer and the public to permit the merger or other acquisition of control.
570	565		540 (b) For purposes of Subsection (8)(a)(iv), the offering price for each security may not
571		-	541be considered unfair if the adjusted book values under Subsection (2)(e): Enrolled Copy H.B. 410
572		-	- 21 -
	566	+	541be considered unfair if the adjusted book values under Subsection (2)(e):
573	567		542 (i) are disclosed to the securityholders; and
574	568		543 (ii) determined by the commissioner to be reasonable.
575	569		544 (9) For a merger or other acquisition of control described in Subsection (1), the
576	570		545commissioner:
577	571		546 (a) may hold a public hearing on the merger or other acquisition at the commissioner's
578	572		547discretion; and
579	573		548 (b) shall hold a public hearing on the merger or other acquisition upon request by the
580	574		549acquiring party, the insurer, or [any other] an interested party.
581	575		550 (10) (a) [The commissioner shall hold a public hearing under Subsection (9) no later
582	576		551than 45 days after the day on which the statement required by Subsection (1) is filed.] If the
583		-	552commissioner does not hold a hearing described in Subsection (9), the commissioner shall
	577	+	552commissioner does not hold a hearing described in Subsection (9), the commissioner shall 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	578	+	- 19 -
584	579		553approve or deny the merger or other acquisition within 30 days after the day on which the
585	580		554department deems the statement required under Subsection (1) complete.
586	581		555 (b) (i) The commissioner shall give at least 20 [days notice of the hearing to the person
587	582		556filing the statement] days' notice of a hearing described in Subsection (9) to the person filing
588	583		557the statement described in Subsection (1).
589	584		558 (ii) [Affected parties may waive the notice required by this Subsection (9)(b).] The
590	585		559commissioner shall hold a hearing described in Subsection (9) within 30 days after the day on
591	586		560which the department deems the statement required under Subsection (1) complete.
592	587		561 (iii) Not less than seven [days] days' notice of the [public] hearing shall be given by the
593	588		562person filing the statement under Subsection (1) to:
594	589		563 (A) the insurer; and
595	590		564 (B) any person designated by the commissioner.
596	591		565 (iv) Affected parties may waive the notice required under this Subsection (10)(b).
597	592		566 (v) At the hearing, the person filing the statement under Subsection (1), the insurer, any
598	593		567person to whom notice of hearing was sent, and any person whose interest may be affected by
599		-	568the hearing may: H.B. 410
600		-	Enrolled Copy
601		-	- 22 -
	594	+	568the hearing may:
602	595		569 (A) present evidence;
603	596		570 (B) examine and cross-examine witnesses; and
604	597		571 (C) offer oral and written arguments.
605	598		572 (vi) (A) A person or insurer described in Subsection (10)(b)(v) may conduct discovery
606	599		573in the same manner as is allowed in the district courts of this state.
607	600		574 (B) All discovery shall be concluded not later than three days before the
608	601		575commencement of the hearing.
609	602		576 [(c) The commissioner shall make a determination within 30 days after the conclusion
610	603		577of the hearing.]
611	604		578 [(d) At the hearing, the person filing the statement, the insurer, any person to whom
612	605		579notice of hearing was sent, and any other person whose interest may be affected by the hearing
613	606		580may:]
614	607		581 [(i) present evidence;]
615	608		582 [(ii) examine and cross-examine witnesses; and]
616		-	583 [(iii) offer oral and written arguments.]
	609	+	583 [(iii) offer oral and written arguments.] 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	610	+	- 20 -
617	611		584 [(e) (i) A person or insurer described in Subsection (10)(d) may conduct discovery
618	612		585proceedings in the same manner as is presently allowed in the district courts of this state.]
619	613		586 [(ii) All discovery proceedings shall be concluded not later than three days before the
620	614		587commencement of the public hearing.]
621	615		588 (11) If the proposed acquisition of control will require the approval of more than one
622	616		589commissioner, the public hearing described in Subsection (9) may be held on a consolidated
623	617		590basis upon request of the person filing the statement referred to in Subsection (1). The person
624	618		591shall file the statement referred to in Subsection (1) with the National Association of Insurance
625	619		592Commissioners within five days of making the request for a public hearing. A commissioner
626	620		593may opt out of a consolidated hearing and shall provide notice to the applicant of the opt-out
627	621		594within 10 days of the receipt of the statement referred to in Subsection (1). A hearing
628		-	595conducted on a consolidated basis shall be public and shall be held within the United States Enrolled Copy H.B. 410
629		-	- 23 -
	622	+	595conducted on a consolidated basis shall be public and shall be held within the United States
630	623		596before the commissioners of the states in which the insurers are domiciled. The commissioners
631	624		597shall hear and receive evidence. A commissioner may attend a hearing under this Subsection
632	625		598(11) in person or by telecommunication.
633	626		599 (12) In connection with a change of control of a domestic insurer, any determination by
634	627		600the commissioner that the person acquiring control of the insurer shall be required to maintain
635	628		601or restore the capital of the insurer to the level required by the laws and regulations of this state
636	629		602shall be made not later than 60 days after the date of notification of the change in control
637	630		603submitted pursuant to Subsection (1).
638	631		604 (13) (a) The commissioner may retain technical experts to assist in reviewing all, or a
639	632		605portion of, information filed in connection with a proposed merger or other acquisition of
640	633		606control referred to in Subsection (1).
641	634		607 (b) In determining whether any of the conditions in Subsection (8) exist, the
642	635		608commissioner may consider the findings of technical experts employed to review applicable
643	636		609filings.
644	637		610 (c) (i) A technical expert employed under Subsection (13)(a) shall present to the
645	638		611commissioner a statement of all expenses incurred by the technical expert in conjunction with
646	639		612the technical expert's review of a proposed merger or other acquisition of control.
647	640		613 (ii) At the commissioner's direction the acquiring person shall compensate the technical
648		-	614expert at customary rates for time and expenses:
	641	+	614expert at customary rates for time and expenses: 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	642	+	- 21 -
649	643		615 (A) necessarily incurred; and
650	644		616 (B) approved by the commissioner.
651	645		617 (iii) The acquiring person shall:
652	646		618 (A) certify the consolidated account of all charges and expenses incurred for the review
653	647		619by technical experts;
654	648		620 (B) retain a copy of the consolidated account described in Subsection (13)(c)(iii)(A);
655	649		621and
656		-	622 (C) file with the department as a public record a copy of the consolidated account H.B. 410
657		-	Enrolled Copy
658		-	- 24 -
	650	+	622 (C) file with the department as a public record a copy of the consolidated account
659	651		623described in Subsection (13)(c)(iii)(A).
660	652		624 (14) (a) (i) If a domestic insurer proposes to merge into another insurer, any
661	653		625securityholder electing to exercise a right of dissent may file with the insurer a written request
662	654		626for payment of the adjusted book value given in the statement required by Subsection (1) and
663	655		627approved under Subsection (8), in return for the surrender of the security holder's securities.
664	656		628 (ii) The request described in Subsection (14)(a)(i) shall be filed not later than 10 days
665	657		629after the day of the securityholders' meeting where the corporate action is approved.
666	658		630 (b) The dissenting securityholder is entitled to and the insurer is required to pay to the
667	659		631dissenting securityholder the specified value within 60 days of receipt of the dissenting security
668	660		632holder's security.
669	661		633 (c) Persons electing under this Subsection (14) to receive cash for their securities waive
670	662		634the dissenting shareholder and appraisal rights otherwise applicable under Title 16, Chapter
671	663		63510a, Part 13, Dissenters' Rights.
672	664		636 (d) (i) This Subsection (14) provides an elective procedure for dissenting
673	665		637securityholders to resolve their objections to the plan of merger.
674	666		638 (ii) This section does not restrict the rights of dissenting securityholders under Title 16,
675	667		639Chapter 10a, Utah Revised Business Corporation Act, unless this election is made under this
676	668		640Subsection (14).
677	669		641 (15) (a) All statements, amendments, or other material filed under Subsection (1), and
678	670		642all notices of public hearings held under Subsection [(8)] (10), shall be mailed by the insurer to
679	671		643its securityholders within five business days after the insurer has received the statements,
680	672		644amendments, other material, or notices.
681		-	645 (b) (i) Mailing expenses shall be paid by the person making the filing.
	673	+	645 (b) (i) Mailing expenses shall be paid by the person making the filing. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	674	+	- 22 -
682	675		646 (ii) As security for the payment of mailing expenses, that person shall file with the
683	676		647commissioner an acceptable bond or other deposit in an amount determined by the
684	677		648commissioner.
685		-	649 (16) This section does not apply to any offer, request, invitation, agreement, or Enrolled Copy H.B. 410
686		-	- 25 -
	678	+	649 (16) This section does not apply to any offer, request, invitation, agreement, or
687	679		650acquisition that the commissioner by order exempts from the requirements of this section as:
688	680		651 (a) not having been made or entered into for the purpose of, and not having the effect
689	681		652of, changing or influencing the control of a domestic insurer; or
690	682		653 (b) otherwise not comprehended within the purposes of this section.
691	683		654 (17) The following are violations of this section:
692	684		655 (a) the failure to file any statement, amendment, or other material required to be filed
693	685		656pursuant to Subsections (1), (2), and (5); or
694	686		657 (b) the effectuation, or any attempt to effectuate, an acquisition of control of,
695	687		658divestiture of, or merger with a domestic insurer unless the commissioner has given the
696	688		659commissioner's approval to the acquisition or merger.
697	689		660 (18) (a) The courts of this state are vested with jurisdiction over:
698	690		661 (i) a person who:
699	691		662 (A) files a statement with the commissioner under this section; and
700	692		663 (B) is not resident, domiciled, or authorized to do business in this state; and
701	693		664 (ii) overall actions involving persons described in Subsection (18)(a)(i) arising out of a
702	694		665violation of this section.
703	695		666 (b) A person described in Subsection (18)(a) is considered to have performed acts
704	696		667equivalent to and constituting an appointment of the commissioner by that person, to be that
705	697		668person's lawful agent upon whom may be served all lawful process in any action, suit, or
706	698		669proceeding arising out of a violation of this section.
707	699		670 (c) A copy of a lawful process described in Subsection (18)(b) shall be:
708	700		671 (i) served on the commissioner; and
709	701		672 (ii) transmitted by registered or certified mail by the commissioner to the person at that
710	702		673person's last-known address.
711	703		674 Section 6. Section 31A-17-404 is amended to read:
712	704		675 31A-17-404. Credit allowed a domestic ceding insurer against reserves for
713		-	676reinsurance. H.B. 410
714		-	Enrolled Copy
715		-	- 26 -
	705	+	676reinsurance. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	706	+	- 23 -
716	707		677 (1) (a) Subject to Subsections (1)(b) and (c), a domestic ceding insurer is allowed
717	708		678credit for reinsurance as either an asset or a reduction from liability for reinsurance ceded only
718	709		679if the reinsurer meets the requirements of Subsection (3), (4), (5), (6), (7), (8), or (9).
719	710		680 (b) Credit is allowed under Subsection (3), (4), or (5) only with respect to a cession of
720	711		681a kind or class of business that the assuming insurer is licensed or otherwise permitted to write
721	712		682or assume:
722	713		683 (i) in the assuming insurer's state of domicile; or
723	714		684 (ii) in the case of a United States branch of an alien assuming insurer, in the state
724	715		685through which the assuming insurer is entered and licensed to transact insurance or
725	716		686reinsurance.
726	717		687 (c) Credit is allowed under Subsection (5) or (6) only if the applicable requirements of
727	718		688Subsection (11) are met.
728	719		689 (2) A domestic ceding insurer is allowed credit for reinsurance ceded:
729	720		690 (a) only if the reinsurance is payable in a manner consistent with Section 31A-22-1201;
730	721		691 (b) only to the extent that the accounting:
731	722		692 (i) is consistent with the terms of the reinsurance contract; and
732	723		693 (ii) clearly reflects:
733	724		694 (A) the amount and nature of risk transferred; and
734	725		695 (B) liability, including contingent liability, of the ceding insurer;
735	726		696 (c) only to the extent the reinsurance contract shifts insurance policy risk from the
736	727		697ceding insurer to the assuming reinsurer in fact and not merely in form; and
737	728		698 (d) only if the reinsurance contract contains a provision placing on the reinsurer the
738	729		699credit risk of all dealings with intermediaries regarding the reinsurance contract.
739	730		700 (3) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
740	731		701assuming insurer that is licensed to transact insurance or reinsurance in this state.
741	732		702 (4) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
742		-	703assuming insurer that is accredited by the commissioner as a reinsurer in this state. Enrolled Copy H.B. 410
743		-	- 27 -
	733	+	703assuming insurer that is accredited by the commissioner as a reinsurer in this state.
744	734		704 (b) An insurer is accredited as a reinsurer if the insurer:
745	735		705 (i) files with the commissioner evidence of the insurer's submission to this state's
746	736		706jurisdiction;
747		-	707 (ii) submits to the commissioner's authority to examine the insurer's books and records;
	737	+	707 (ii) submits to the commissioner's authority to examine the insurer's books and records; 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	738	+	- 24 -
748	739		708 (iii) (A) is licensed to transact insurance or reinsurance in at least one state; or
749	740		709 (B) in the case of a United States branch of an alien assuming insurer, is entered
750	741		710through and licensed to transact insurance or reinsurance in at least one state;
751	742		711 (iv) files annually with the commissioner a copy of the insurer's:
752	743		712 (A) annual statement filed with the insurance department of the insurer's state of
753	744		713domicile; and
754	745		714 (B) most recent audited financial statement; and
755	746		715 (v) (A) (I) has not had the insurer's accreditation denied by the commissioner within 90
756	747		716days after the day on which the insurer submits the information required by this Subsection (4);
757	748		717and
758	749		718 (II) maintains a surplus with regard to policyholders in an amount not less than
759	750		719$20,000,000; or
760	751		720 (B) (I) has the insurer's accreditation approved by the commissioner; and
761	752		721 (II) maintains a surplus with regard to policyholders in an amount less than
762	753		722$20,000,000.
763	754		723 (c) Credit may not be allowed a domestic ceding insurer if the assuming insurer's
764	755		724accreditation is revoked by the commissioner after a notice and hearing.
765	756		725 (5) (a) A domestic ceding insurer is allowed a credit if:
766	757		726 (i) the reinsurance is ceded to an assuming insurer that is:
767	758		727 (A) domiciled in a state meeting the requirements of Subsection (5)(a)(ii); or
768	759		728 (B) in the case of a United States branch of an alien assuming insurer, is entered
769	760		729through a state meeting the requirements of Subsection (5)(a)(ii);
770		-	730 (ii) the state described in Subsection (5)(a)(i) employs standards regarding credit for H.B. 410
771		-	Enrolled Copy
772		-	- 28 -
	761	+	730 (ii) the state described in Subsection (5)(a)(i) employs standards regarding credit for
773	762		731reinsurance substantially similar to those applicable under this section; and
774	763		732 (iii) the assuming insurer or United States branch of an alien assuming insurer:
775	764		733 (A) maintains a surplus with regard to policyholders in an amount not less than
776	765		734$20,000,000; and
777	766		735 (B) submits to the authority of the commissioner to examine the insurer's books and
778	767		736records.
779	768		737 (b) The requirements of Subsections (5)(a)(i) and (ii) do not apply to reinsurance ceded
780		-	738and assumed pursuant to a pooling arrangement among insurers in the same holding company
	769	+	738and assumed pursuant to a pooling arrangement among insurers in the same holding company 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	770	+	- 25 -
781	771		739system.
782	772		740 (6) (a) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
783	773		741assuming insurer that maintains a trust fund:
784	774		742 (i) created in accordance with rules made by the commissioner pursuant to Title 63G,
785	775		743Chapter 3, Utah Administrative Rulemaking Act; and
786	776		744 (ii) in a qualified United States financial institution for the payment of a valid claim of:
787	777		745 (A) a United States ceding insurer of the assuming insurer;
788	778		746 (B) an assign of the United States ceding insurer; and
789	779		747 (C) a successor in interest to the United States ceding insurer.
790	780		748 (b) To enable the commissioner to determine the sufficiency of the trust fund described
791	781		749in Subsection (6)(a), the assuming insurer shall:
792	782		750 (i) report annually to the commissioner information substantially the same as that
793	783		751required to be reported on the National Association of Insurance Commissioners Annual
794	784		752Statement form by a licensed insurer; and
795	785		753 (ii) (A) submit to examination of its books and records by the commissioner; and
796	786		754 (B) pay the cost of an examination.
797	787		755 (c) (i) Credit for reinsurance may not be granted under this Subsection (6) unless the
798	788		756form of the trust and any amendment to the trust is approved by:
799		-	757 (A) the commissioner of the state where the trust is domiciled; or Enrolled Copy H.B. 410
800		-	- 29 -
	789	+	757 (A) the commissioner of the state where the trust is domiciled; or
801	790		758 (B) the commissioner of another state who, pursuant to the terms of the trust
802	791		759instrument, accepts principal regulatory oversight of the trust.
803	792		760 (ii) The form of the trust and an amendment to the trust shall be filed with the
804	793		761commissioner of every state in which a ceding insurer beneficiary of the trust is domiciled.
805	794		762 (iii) The trust instrument shall provide that a contested claim is valid and enforceable
806	795		763upon the final order of a court of competent jurisdiction in the United States.
807	796		764 (iv) The trust shall vest legal title to the trust's assets in one or more of the trust's
808	797		765trustees for the benefit of:
809	798		766 (A) a United States ceding insurer of the assuming insurer;
810	799		767 (B) an assign of the United States ceding insurer; or
811	800		768 (C) a successor in interest to the United States ceding insurer.
812		-	769 (v) The trust and the assuming insurer are subject to examination as determined by the
	801	+	769 (v) The trust and the assuming insurer are subject to examination as determined by the 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	802	+	- 26 -
813	803		770commissioner.
814	804		771 (vi) The trust shall remain in effect for as long as the assuming insurer has an
815	805		772outstanding obligation due under a reinsurance agreement subject to the trust.
816	806		773 (vii) No later than February 28 of each year, the trustee of the trust shall:
817	807		774 (A) report to the commissioner in writing the balance of the trust;
818	808		775 (B) list the trust's investments at the end of the preceding calendar year; and
819	809		776 (C) (I) certify the date of termination of the trust, if so planned; or
820	810		777 (II) certify that the trust will not expire before the following December 31.
821	811		778 (d) The following requirements apply to the following categories of assuming insurer:
822	812		779 (i) For a single assuming insurer:
823	813		780 (A) the trust fund shall consist of funds in trust in an amount not less than the assuming
824	814		781insurer's liabilities attributable to reinsurance ceded by United States ceding insurers; and
825	815		782 (B) the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000,
826	816		783except as provided in Subsection (6)(d)(ii).
827		-	784 (ii) (A) At any time after the assuming insurer has permanently discontinued H.B. 410
828		-	Enrolled Copy
829		-	- 30 -
	817	+	784 (ii) (A) At any time after the assuming insurer has permanently discontinued
830	818		785underwriting new business secured by the trust for at least three full years, the commissioner
831	819		786with principal regulatory oversight of the trust may authorize a reduction in the required
832	820		787trusteed surplus, but only after a finding, based on an assessment of the risk, that the new
833	821		788required surplus level is adequate for the protection of United States ceding insurers,
834	822		789policyholders, and claimants in light of reasonably foreseeable adverse loss development.
835	823		790 (B) The risk assessment may involve an actuarial review, including an independent
836	824		791analysis of reserves and cash flows, and shall consider all material risk factors, including, when
837	825		792applicable, the lines of business involved, the stability of the incurred loss estimates, and the
838	826		793effect of the surplus requirements on the assuming insurer's liquidity or solvency.
839	827		794 (C) The minimum required trusteed surplus may not be reduced to an amount less than
840	828		79530% of the assuming insurer's liabilities attributable to reinsurance ceded by United States
841	829		796ceding insurers covered by the trust.
842	830		797 (iii) For a group acting as assuming insurer, including incorporated and individual
843	831		798unincorporated underwriters:
844	832		799 (A) for reinsurance ceded under a reinsurance agreement with an inception,
845		-	800amendment, or renewal date on or after August 1, 1995, the trust shall consist of a trusteed
	833	+	800amendment, or renewal date on or after August 1, 1995, the trust shall consist of a trusteed 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	834	+	- 27 -
846	835		801account in an amount not less than the respective underwriters' several liabilities attributable to
847	836		802business ceded by the one or more United States domiciled ceding insurers to an underwriter of
848	837		803the group;
849	838		804 (B) for reinsurance ceded under a reinsurance agreement with an inception date on or
850	839		805before July 31, 1995, and not amended or renewed after July 31, 1995, notwithstanding the
851	840		806other provisions of this chapter, the trust shall consist of a trusteed account in an amount not
852	841		807less than the respective underwriters' several insurance and reinsurance liabilities attributable to
853	842		808business written in the United States;
854	843		809 (C) in addition to a trust described in Subsection (6)(d)(iii)(A) or (B), the group shall
855	844		810maintain in trust a trusteed surplus of which $100,000,000 is held jointly for the benefit of the
856		-	811one or more United States domiciled ceding insurers of a member of the group for all years of Enrolled Copy H.B. 410
857		-	- 31 -
	845	+	811one or more United States domiciled ceding insurers of a member of the group for all years of
858	846		812account;
859	847		813 (D) the incorporated members of the group:
860	848		814 (I) may not be engaged in a business other than underwriting as a member of the group;
861	849		815and
862	850		816 (II) are subject to the same level of regulation and solvency control by the group's
863	851		817domiciliary regulator as are the unincorporated members; and
864	852		818 (E) within 90 days after the day on which the group's financial statements are due to be
865	853		819filed with the group's domiciliary regulator, the group shall provide to the commissioner:
866	854		820 (I) an annual certification by the group's domiciliary regulator of the solvency of each
867	855		821underwriter member; or
868	856		822 (II) if a certification is unavailable, a financial statement, prepared by an independent
869	857		823public accountant, of each underwriter member of the group.
870	858		824 (iv) For a group of incorporated underwriters under common administration, the group
871	859		825shall:
872	860		826 (A) have continuously transacted an insurance business outside the United States for at
873	861		827least three years immediately preceding the day on which the group makes application for
874	862		828accreditation;
875	863		829 (B) maintain aggregate policyholders' surplus of at least $10,000,000,000;
876	864		830 (C) maintain a trust fund in an amount not less than the group's several liabilities
877		-	831attributable to business ceded by the one or more United States domiciled ceding insurers to a
	865	+	831attributable to business ceded by the one or more United States domiciled ceding insurers to a 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	866	+	- 28 -
878	867		832member of the group pursuant to a reinsurance contract issued in the name of the group;
879	868		833 (D) in addition to complying with the other provisions of this Subsection (6)(d)(iv),
880	869		834maintain a joint trusteed surplus of which $100,000,000 is held jointly for the benefit of the one
881	870		835or more United States domiciled ceding insurers of a member of the group as additional
882	871		836security for these liabilities; and
883	872		837 (E) within 90 days after the day on which the group's financial statements are due to be
884		-	838filed with the group's domiciliary regulator, make available to the commissioner: H.B. 410
885		-	Enrolled Copy
886		-	- 32 -
	873	+	838filed with the group's domiciliary regulator, make available to the commissioner:
887	874		839 (I) an annual certification of each underwriter member's solvency by the member's
888	875		840domiciliary regulator; and
889	876		841 (II) a financial statement of each underwriter member of the group prepared by an
890	877		842independent public accountant.
891	878		843 (7) A domestic ceding insurer is allowed a credit if the reinsurance is ceded to an
892	879		844assuming insurer that secures the assuming insurer's obligations in accordance with this
893	880		845Subsection (7):
894	881		846 (a) The insurer shall be certified by the commissioner as a reinsurer in this state.
895	882		847 (b) To be eligible for certification, the assuming insurer shall:
896	883		848 (i) be domiciled and licensed to transact insurance or reinsurance in a qualified
897	884		849jurisdiction, as determined by the commissioner pursuant to Subsection (7)(d);
898	885		850 (ii) maintain minimum capital and surplus, or its equivalent, in an amount to be
899	886		851determined by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
900	887		8523, Utah Administrative Rulemaking Act;
901	888		853 (iii) maintain financial strength ratings from two or more rating agencies considered
902	889		854acceptable by the commissioner pursuant to rules made in accordance with Title 63G, Chapter
903	890		8553, Utah Administrative Rulemaking Act; and
904	891		856 (iv) agree to:
905	892		857 (A) submit to the jurisdiction of this state;
906	893		858 (B) appoint the commissioner as the assuming insurer's agent for service of process in
907	894		859this state;
908	895		860 (C) provide security for 100% of the assuming insurer's liabilities attributable to
909	896		861reinsurance ceded by United States ceding insurers if the assuming insurer resists enforcement
910		-	862of a final United States judgment;
	897	+	862of a final United States judgment; 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	898	+	- 29 -
911	899		863 (D) agree to meet applicable information filing requirements as determined by the
912	900		864commissioner including an application for certification, a renewal and on an ongoing basis; and
913		-	865 (E) any other requirements for certification considered relevant by the commissioner. Enrolled Copy H.B. 410
914		-	- 33 -
	901	+	865 (E) any other requirements for certification considered relevant by the commissioner.
915	902		866 (c) An association, including incorporated and individual unincorporated underwriters,
916	903		867may be a certified reinsurer, if the association:
917	904		868 (i) satisfies the requirements of Subsections (7)(a) and (b);
918	905		869 (ii) satisfies the association's minimum capital and surplus requirements through the
919	906		870capital and surplus equivalents, net of liabilities, of the association and the association's
920	907		871members, which shall include a joint central fund that may be applied to any unsatisfied
921	908		872obligation of the association or any of the association's members in an amount determined by
922	909		873the commissioner to provide adequate protection;
923	910		874 (iii) does not have incorporated members of the association engaged in any business
924	911		875other than underwriting as a member of the association;
925	912		876 (iv) is subject to the same level of regulation and solvency control of the incorporated
926	913		877members of the association by the association's domiciliary regulator as are the unincorporated
927	914		878members; and
928	915		879 (v) within 90 days after the day on which the association's financial statements are due
929	916		880to be filed with the association's domiciliary regulator, provides to the commissioner:
930	917		881 (A) an annual certification by the association's domiciliary regulator of the solvency of
931	918		882each underwriter member; or
932	919		883 (B) if a certification described in Subsection (7)(c)(v)(A) is unavailable, financial
933	920		884statements prepared by independent public accountants, of each underwriter member of the
934	921		885association.
935	922		886 (d) (i) The commissioner shall create and publish a list of qualified jurisdictions under
936	923		887which an assuming insurer licensed and domiciled in the jurisdiction is eligible to be
937	924		888considered for certification by the commissioner as a certified reinsurer.
938	925		889 (ii) To determine whether the domiciliary jurisdiction of a non-United States assuming
939	926		890insurer is eligible to be recognized as a qualified jurisdiction, the commissioner:
940	927		891 (A) shall evaluate the appropriateness and effectiveness of the reinsurance supervisory
941		-	892system of the jurisdiction, both initially and on an ongoing basis; H.B. 410
942		-	Enrolled Copy
943		-	- 34 -
944		-	893 (B) shall consider the rights, the benefits, and the extent of reciprocal recognition
	928	+	892system of the jurisdiction, both initially and on an ongoing basis;
	929	+	893 (B) shall consider the rights, the benefits, and the extent of reciprocal recognition 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	930	+	- 30 -
945	931		894afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the
946	932		895United States;
947	933		896 (C) shall require the qualified jurisdiction to share information and cooperate with the
948	934		897commissioner with respect to all certified reinsurers domiciled within that jurisdiction; and
949	935		898 (D) may not recognize a jurisdiction as a qualified jurisdiction if the commissioner has
950	936		899determined that the jurisdiction does not adequately and promptly enforce final United States
951	937		900judgments and arbitration awards.
952	938		901 (iii) The commissioner may consider additional factors in determining a qualified
953	939		902jurisdiction.
954	940		903 (iv) A list of qualified jurisdictions shall be published through the National Association
955	941		904of Insurance Commissioners' Committee Process.
956	942		905 (v) The commissioner shall:
957	943		906 (A) consider the National Association of Insurance Commissioners' list of qualified
958	944		907jurisdictions in determining qualified jurisdictions; and
959	945		908 (B) if the commissioner approves a jurisdiction as qualified that does not appear on the
960	946		909National Association of Insurance Commissioners' list of qualified jurisdictions, provide
961	947		910thoroughly documented justification in accordance with criteria to be developed by rule made
962	948		911in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
963	949		912 (vi) United States jurisdictions that meet the requirement for accreditation under the
964	950		913National Association of Insurance Commissioners' financial standards and accreditation
965	951		914program shall be recognized as qualified jurisdictions.
966	952		915 (vii) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified
967	953		916jurisdiction, the commissioner may suspend the reinsurer's certification indefinitely, in lieu of
968	954		917revocation.
969	955		918 (e) The commissioner shall:
970		-	919 (i) assign a rating to each certified reinsurer, giving due consideration to the financial Enrolled Copy H.B. 410
971		-	- 35 -
	956	+	919 (i) assign a rating to each certified reinsurer, giving due consideration to the financial
972	957		920strength ratings that have been assigned by rating agencies considered acceptable to the
973	958		921commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
974	959		922Rulemaking Act; and
975	960		923 (ii) publish a list of all certified reinsurers and their ratings.
976		-	924 (f) A certified reinsurer shall secure obligations assumed from United States ceding
	961	+	924 (f) A certified reinsurer shall secure obligations assumed from United States ceding 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	962	+	- 31 -
977	963		925insurers under this Subsection (7) at a level consistent with the certified reinsurer's rating, as
978	964		926specified in rules made by the commissioner in accordance with Title 63G, Chapter 3, Utah
979	965		927Administrative Rulemaking Act.
980	966		928 (i) For a domestic ceding insurer to qualify for full financial statement credit for
981	967		929reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a
982	968		930form acceptable to the commissioner and consistent with Section 31A-17-404.1, or in a
983	969		931multibeneficiary trust in accordance with Subsections (5), (6), and (9), except as otherwise
984	970		932provided in this Subsection (7).
985	971		933 (ii) If a certified reinsurer maintains a trust to fully secure the certified reinsurer's
986	972		934obligations subject to Subsections (5), (6), and (9), and chooses to secure the certified
987	973		935reinsurer's obligations incurred as a certified reinsurer in the form of a multibeneficiary trust,
988	974		936the certified reinsurer shall maintain separate trust accounts for the certified reinsurer's
989	975		937obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer
990	976		938with reduced security as permitted by this Subsection (7) or comparable laws of other United
991	977		939States jurisdictions and for the certified reinsurer's obligations subject to Subsections (5), (6),
992	978		940and (9).
993	979		941 (iii) It shall be a condition to the grant of certification under this Subsection (7) that the
994	980		942certified reinsurer shall have bound itself:
995	981		943 (A) by the language of the trust and agreement with the commissioner with principal
996	982		944regulatory oversight of the trust account; and
997	983		945 (B) upon termination of the trust account, to fund, out of the remaining surplus of the
998		-	946trust, any deficiency of any other trust account. H.B. 410
999		-	Enrolled Copy
1000		-	- 36 -
	984	+	946trust, any deficiency of any other trust account.
1001	985		947 (iv) The minimum trusteed surplus requirements provided in Subsections (5), (6), and
1002	986		948(9) are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer
1003	987		949for the purpose of securing obligations incurred under this Subsection (7), except that the trust
1004	988		950shall maintain a minimum trusteed surplus of $10,000,000.
1005	989		951 (v) With respect to obligations incurred by a certified reinsurer under this Subsection
1006	990		952(7), if the security is insufficient, the commissioner:
1007	991		953 (A) shall reduce the allowable credit by an amount proportionate to the deficiency; and
1008	992		954 (B) may impose further reductions in allowable credit upon finding that there is a
1009		-	955material risk that the certified reinsurer's obligations will not be paid in full when due.
	993	+	955material risk that the certified reinsurer's obligations will not be paid in full when due. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	994	+	- 32 -
1010	995		956 (vi) (A) For purposes of this Subsection (7), a certified reinsurer whose certification
1011	996		957has been terminated for any reason shall be treated as a certified reinsurer required to secure
1012	997		958100% of the certified reinsurer's obligations.
1013	998		959 (B) As used in this Subsection (7), the term "terminated" refers to revocation,
1014	999		960suspension, voluntary surrender, and inactive status.
1015	1000		961 (C) If the commissioner continues to assign a higher rating as permitted by other
1016	1001		962provisions of this section, the requirement under this Subsection (7)(f)(vi) does not apply to a
1017	1002		963certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.
1018	1003		964 (g) If an applicant for certification has been certified as a reinsurer in a National
1019	1004		965Association of Insurance Commissioners' accredited jurisdiction, the commissioner may:
1020	1005		966 (i) defer to that jurisdiction's certification;
1021	1006		967 (ii) defer to the rating assigned by that jurisdiction; and
1022	1007		968 (iii) consider such reinsurer to be a certified reinsurer in this state.
1023	1008		969 (h) (i) A certified reinsurer that ceases to assume new business in this state may request
1024	1009		970to maintain the certified reinsurer's certification in inactive status in order to continue to qualify
1025	1010		971for a reduction in security for its in-force business.
1026	1011		972 (ii) An inactive certified reinsurer shall continue to comply with all applicable
1027		-	973requirements of this Subsection (7). Enrolled Copy H.B. 410
1028		-	- 37 -
	1012	+	973requirements of this Subsection (7).
1029	1013		974 (iii) The commissioner shall assign a rating to a reinsurer that qualifies under this
1030	1014		975Subsection (7)(h), that takes into account, if relevant, the reasons why the reinsurer is not
1031	1015		976assuming new business.
1032	1016		977 (8) (a) As used in this Subsection (8):
1033	1017		978 (i) "Covered agreement" means an agreement entered into pursuant to Dodd-Frank
1034	1018		979Wall Street Reform and Consumer Protection Act, 31 U.S.C. Sections 313 and 314, that:
1035	1019		980 (A) is currently in effect or in a period of provisional application; and
1036	1020		981 (B) addresses the elimination, under specified conditions, of collateral requirements as
1037	1021		982a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this
1038	1022		983state or for allowing the ceding insurer to recognize credit for reinsurance.
1039	1023		984 (ii) "Reciprocal jurisdiction" means a jurisdiction that is:
1040	1024		985 (A) a non-United States jurisdiction that is subject to an in-force covered agreement
1041		-	986with the United States, each within its legal authority, or, in the case of a covered agreement
	1025	+	986with the United States, each within its legal authority, or, in the case of a covered agreement 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1026	+	- 33 -
1042	1027		987between the United States and European Union, is a member state of the European Union;
1043	1028		988 (B) a United States jurisdiction that meets the requirements for accreditation under the
1044	1029		989National Association of Insurance Commissioners' financial standards and accreditation
1045	1030		990program; or
1046	1031		991 (C) a qualified jurisdiction, as determined by the commissioner in accordance with
1047	1032		992Subsection (7)(d), that is not otherwise described in this Subsection (8)(a)(ii) and meets certain
1048	1033		993additional requirements, consistent with the terms and conditions of in-force covered
1049	1034		994agreements, as specified by the commissioner in rule made in accordance with Title 63G,
1050	1035		995Chapter 3, Utah Administrative Rulemaking Act.
1051	1036		996 (b) (i) Credit is allowed when the reinsurance is ceded to an assuming insurer meeting
1052	1037		997each of the conditions set forth in this Subsection (8)(b).
1053	1038		998 (ii) The assuming insurer must have the assuming insurer's head office in or be
1054	1039		999domiciled in, as applicable, and be licensed in a reciprocal jurisdiction.
1055		-	1000 (iii) (A) The assuming insurer shall have and maintain, on an ongoing basis, minimum H.B. 410
1056		-	Enrolled Copy
1057		-	- 38 -
	1040	+	1000 (iii) (A) The assuming insurer shall have and maintain, on an ongoing basis, minimum
1058	1041		1001capital and surplus, or its equivalent, calculated according to the methodology of the assuming
1059	1042		1002insurer's domiciliary jurisdiction, in an amount to be set forth in regulation.
1060	1043		1003 (B) If the assuming insurer is an association, including incorporated and individual
1061	1044		1004unincorporated underwriters, the assuming insurer shall have and maintain, on an ongoing
1062	1045		1005basis, minimum capital and surplus equivalents (net of liabilities), calculated according to the
1063	1046		1006methodology applicable in the assuming insurer's domiciliary jurisdiction, and a central fund
1064	1047		1007containing a balance in amounts set forth in regulation.
1065	1048		1008 (iv) (A) The assuming insurer must have and maintain, on an ongoing basis, a
1066	1049		1009minimum solvency or capital ration, as applicable, which will be set forth in regulation.
1067	1050		1010 (B) If the assuming insurer is an association, including incorporated and individual
1068	1051		1011unincorporated underwriters, the assuming insurer must have and maintain, on an ongoing
1069	1052		1012basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where the assuming
1070	1053		1013insurer has the assuming insurer's head office or is domiciled, as applicable, and is also
1071	1054		1014licensed.
1072	1055		1015 (v) The assuming insurer must agree and provide adequate assurance to the
1073	1056		1016commissioner, in a form specified by the commissioner by rule made in accordance with Title
1074		-	101763G, Chapter 3, Utah Administrative Rulemaking Act, as follows:
	1057	+	101763G, Chapter 3, Utah Administrative Rulemaking Act, as follows: 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1058	+	- 34 -
1075	1059		1018 (A) the assuming insurer must provide prompt written notice and explanation to the
1076	1060		1019commissioner if the assuming insurer falls below the minimum requirements set forth in
1077	1061		1020Subsection (8)(c) or (d), or if any regulatory action is taken against the assuming insurer for
1078	1062		1021serious noncompliance with applicable law;
1079	1063		1022 (B) the assuming insurer must consent in writing to the jurisdiction of the courts of this
1080	1064		1023state and to the appointment of the commissioner as agent for service of process, however the
1081	1065		1024commissioner may require that consent for service of process be provided to the commissioner
1082	1066		1025and included in each reinsurance agreement and nothing in this provision shall limit, or in any
1083	1067		1026way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute
1084		-	1027resolution mechanisms, except to the extent such agreements are unenforceable under Enrolled Copy H.B. 410
1085		-	- 39 -
	1068	+	1027resolution mechanisms, except to the extent such agreements are unenforceable under
1086	1069		1028applicable insolvency or delinquency laws;
1087	1070		1029 (C) the assuming insurer must consent in writing to pay all final judgments, wherever
1088	1071		1030enforcement is sought, obtained by a ceding insurer or the ceding insurer's legal successor, that
1089	1072		1031have been declared enforceable in the jurisdiction where the judgment was obtained;
1090	1073		1032 (D) each reinsurance agreement must include a provision requiring the assuming
1091	1074		1033insurer to provide security in an amount equal to 100% of the assuming insurer's liabilities
1092	1075		1034attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists
1093	1076		1035enforcement of a final judgment that is enforceable under the law of the jurisdiction in which
1094	1077		1036the final judgement was obtained or a properly enforceable arbitration award, whether obtained
1095	1078		1037by the ceding insurer or by the ceding insurer's legal successor on behalf of the ceding insurer's
1096	1079		1038resolution estate; and
1097	1080		1039 (E) the assuming insurer must confirm that the assuming insurer is not presently
1098	1081		1040participating in any solvent scheme of arrangement which involved this state's ceding insurers,
1099	1082		1041and agree to notify the ceding insurer and the commissioner and to provide security:
1100	1083		1042 (I) in an amount equal to 100% of the assuming insurer's liabilities to the ceding
1101	1084		1043insurer, should the assuming insurer enter into such a solvent scheme of arrangement; and
1102	1085		1044 (II) in a form consistent with the provisions of Subsections (7) and (10) and as
1103	1086		1045specified by the commissioner in regulation.
1104	1087		1046 (vi) The assuming insurer or the assuming insurer's legal successor must provide, if
1105	1088		1047requested by the commissioner, on behalf of the assuming insurer and any legal predecessors,
1106		-	1048certain documentation to the commissioner, as specified by the commissioner by rule made in
	1089	+	1048certain documentation to the commissioner, as specified by the commissioner by rule made in 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1090	+	- 35 -
1107	1091		1049accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1108	1092		1050 (vii) The assuming insurer must maintain a practice of prompt payment of claims under
1109	1093		1051reinsurance agreements, pursuant to criteria set forth in rule made in accordance with Title
1110	1094		105263G, Chapter 3, Utah Administrative Rulemaking Act.
1111	1095		1053 (viii) The assuming insurer's supervisory authority must confirm to the commissioner
1112		-	1054on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily H.B. 410
1113		-	Enrolled Copy
1114		-	- 40 -
	1096	+	1054on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily
1115	1097		1055reported to the reciprocal jurisdiction, that the assuming insurer complies with the requirements
1116	1098		1056set forth in Subsections (8)(c) and (d).
1117	1099		1057 (ix) Nothing in this provision precludes an assuming insurer from providing the
1118	1100		1058commissioner with information on a voluntary basis.
1119	1101		1059 (c) (i) The commissioner shall timely create and publish a list of reciprocal
1120	1102		1060jurisdictions.
1121	1103		1061 (ii) (A) A list of reciprocal jurisdictions is published through the National Association
1122	1104		1062of Insurance Commissioners' Committee Process.
1123	1105		1063 (B) The commissioner's list of reciprocal jurisdictions shall include any reciprocal
1124	1106		1064jurisdiction as defined in this Subsection (8), and shall consider any other reciprocal
1125	1107		1065jurisdictions in accordance with the criteria developed under rule made in accordance with
1126	1108		1066Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1127	1109		1067 (iii) (A) The commissioner may remove a jurisdiction from the list of reciprocal
1128	1110		1068jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a
1129	1111		1069reciprocal jurisdiction, in accordance with a process set forth in rule made in accordance with
1130	1112		1070Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except that the commissioner may
1131	1113		1071not remove from the list a reciprocal jurisdiction.
1132	1114		1072 (B) Upon removal of a reciprocal jurisdiction from this list, credit for reinsurance
1133	1115		1073ceded to an assuming insurer whose home office or domicile is in that jurisdiction is allowed, if
1134	1116		1074otherwise allowed under this chapter.
1135	1117		1075 (d) (i) The commissioner shall timely create and publish a list of assuming insurers that
1136	1118		1076have satisfied the conditions set forth in this subsection and to which cessions shall be granted
1137	1119		1077credit in accordance with this Subsection (8).
1138	1120		1078 (ii) The commissioner may add an assuming insurer to such list if a National
1139		-	1079Association of Insurance Commissioners accredited jurisdiction has added such assuming
	1121	+	1079Association of Insurance Commissioners accredited jurisdiction has added such assuming 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1122	+	- 36 -
1140	1123		1080insurer to a list of such assuming insurers or if, upon initial eligibility, the assuming insurer
1141		-	1081submits the information to the commissioner as required under this Subsection (8) and Enrolled Copy H.B. 410
1142		-	- 41 -
	1124	+	1081submits the information to the commissioner as required under this Subsection (8) and
1143	1125		1082complies with any additional requirements that the commissioner may impose by rule made in
1144	1126		1083accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except to the
1145	1127		1084extent that they conflict with an applicable covered agreement.
1146	1128		1085 (e) (i) If the commissioner determines that an assuming insurer no longer meets one or
1147	1129		1086more of the requirements under this Subsection (8), the commissioner may revoke or suspend
1148	1130		1087the eligibility of the assuming insurer for recognition under this Subsection (8) in accordance
1149	1131		1088with procedures established in rule made in accordance with Title 63G, Chapter 3, Utah
1150	1132		1089Administrative Rulemaking Act.
1151	1133		1090 (ii) (A) While an assuming insurer's eligibility is suspended, no reinsurance agreement
1152	1134		1091issued, amended, or renewed after the day on which the suspension is effective qualifies for
1153	1135		1092credit except to the extent that the assuming insurer's obligations under the contract are secured
1154	1136		1093in accordance with Subsection (10).
1155	1137		1094 (B) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be
1156	1138		1095granted after the day on which the revocation is effective with respect to any reinsurance
1157	1139		1096agreements entered into by the assuming insurer, including reinsurance agreements entered into
1158	1140		1097before the day on which the revocation is effective, except to the extent that the assuming
1159	1141		1098insurer's obligations under the contract are secured in a form acceptable to the commissioner
1160	1142		1099and consistent with the provisions of Subsection (10).
1161	1143		1100 (f) If subject to a legal process of rehabilitation, liquidation, or conservation, as
1162	1144		1101applicable, the ceding insurer, or the ceding insurer's representative, may seek and, if
1163	1145		1102determined appropriate by the court in which the proceedings are pending, may obtain an order
1164	1146		1103requiring that the assuming insurer post security for all outstanding ceded liabilities.
1165	1147		1104 (g) Nothing in this Subsection (8) limits or in any way alters the capacity of parties to a
1166	1148		1105reinsurance agreement to agree on requirements for security or other terms in that reinsurance
1167	1149		1106agreement, except as expressly prohibited by this chapter or other applicable law or regulation.
1168	1150		1107 (h) (i) Credit may be taken under this Subsection (8) only for reinsurance agreements
1169		-	1108entered into, amended, or renewed on or after the effective date of the statute adding this H.B. 410
1170		-	Enrolled Copy
1171		-	- 42 -
	1151	+	1108entered into, amended, or renewed on or after the effective date of the statute adding this
1172	1152		1109Subsection (8), and only with respect to losses incurred and reserves reported on or after the
1173		-	1110later of:
	1153	+	1110later of: 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1154	+	- 37 -
1174	1155		1111 (A) the day on which the assuming insurer has met all eligibility requirements pursuant
1175	1156		1112to Subsection (8)(b); and
1176	1157		1113 (B) the day on which the new reinsurance agreement, amendment, or renewal is
1177	1158		1114effective.
1178	1159		1115 (ii) This Subsection (8) does not alter or impair a ceding insurer's right to take credit
1179	1160		1116for reinsurance, to the extent that credit is not available under this Subsection (8), as long as the
1180	1161		1117reinsurance qualifies for credit under any other applicable provision of this chapter.
1181	1162		1118 (iii) Nothing in this Subsection (8) authorizes an assuming insurer to withdraw or
1182	1163		1119reduce the security provided under any reinsurance agreement except as permitted by the terms
1183	1164		1120of the agreement.
1184	1165		1121 (iv) Nothing in this Subsection (8) limits, or in any way alters, the capacity of parties to
1185	1166		1122any reinsurance agreement to renegotiate the agreement.
1186	1167		1123 (9) If reinsurance is ceded to an assuming insurer not meeting the requirements of
1187	1168		1124Subsection (3), (4), (5), (6), (7), or (8), a domestic ceding insurer is allowed credit only as to
1188	1169		1125the insurance of a risk located in a jurisdiction where the reinsurance is required by applicable
1189	1170		1126law or regulation of that jurisdiction.
1190	1171		1127 (10) (a) An asset or a reduction from liability for the reinsurance ceded by a domestic
1191	1172		1128insurer to an assuming insurer not meeting the requirements of Subsection (3), (4), (5), (6), (7),
1192	1173		1129or (8) shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer.
1193	1174		1130 (b) The commissioner may adopt by rule made in accordance with Title 63G, Chapter
1194	1175		11313, Utah Administrative Rulemaking Act, specific additional requirements relating to or setting
1195	1176		1132forth:
1196	1177		1133 (i) the valuation of assets or reserve credits;
1197	1178		1134 (ii) the amount and forms of security supporting reinsurance arrangements; and
1198		-	1135 (iii) the circumstances pursuant to which credit will be reduced or eliminated. Enrolled Copy H.B. 410
1199		-	- 43 -
	1179	+	1135 (iii) the circumstances pursuant to which credit will be reduced or eliminated.
1200	1180		1136 (c) (i) The reduction shall be in the amount of funds held by or on behalf of the ceding
1201	1181		1137insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with
1202	1182		1138the assuming insurer as security for the payment of obligations thereunder, if the security is:
1203	1183		1139 (A) held in the United States subject to withdrawal solely by, and under the exclusive
1204	1184		1140control of, the ceding insurer; or
1205		-	1141 (B) in the case of a trust, held in a qualified United States financial institution.
	1185	+	1141 (B) in the case of a trust, held in a qualified United States financial institution. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1186	+	- 38 -
1206	1187		1142 (ii) The security described in this Subsection (10)(c) may be in the form of:
1207	1188		1143 (A) cash;
1208	1189		1144 (B) securities listed by the Securities Valuation Office of the National Association of
1209	1190		1145Insurance Commissioners, including those deemed exempt from filing as defined by the
1210	1191		1146Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted
1211	1192		1147assets;
1212	1193		1148 (C) clean, irrevocable, unconditional letters of credit, issued or confirmed by a
1213	1194		1149qualified United States financial institution effective no later than December 31 of the year for
1214	1195		1150which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or
1215	1196		1151before the filing date of its annual statement;
1216	1197		1152 (D) letters of credit meeting applicable standards of issuer acceptability as of the dates
1217	1198		1153of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's
1218	1199		1154subsequent failure to meet applicable standards of issuer acceptability, continue to be
1219	1200		1155acceptable as security until their expiration, extension, renewal, modification or amendment,
1220	1201		1156whichever first occurs; or
1221	1202		1157 (E) any other form of security acceptable to the commissioner.
1222	1203		1158 (11) Reinsurance credit is not allowed a domestic ceding insurer unless the assuming
1223	1204		1159insurer under the reinsurance contract submits to the jurisdiction of Utah courts by:
1224	1205		1160 (a) (i) being an admitted insurer; and
1225	1206		1161 (ii) submitting to jurisdiction under Section 31A-2-309;
1226		-	1162 (b) having irrevocably appointed the commissioner as the domestic ceding insurer's H.B. 410
1227		-	Enrolled Copy
1228		-	- 44 -
	1207	+	1162 (b) having irrevocably appointed the commissioner as the domestic ceding insurer's
1229	1208		1163agent for service of process in an action arising out of or in connection with the reinsurance,
1230	1209		1164which appointment is made under Section 31A-2-309; or
1231	1210		1165 (c) agreeing in the reinsurance contract:
1232	1211		1166 (i) that if the assuming insurer fails to perform the assuming insurer's obligations under
1233	1212		1167the terms of the reinsurance contract, the assuming insurer, at the request of the ceding insurer,
1234	1213		1168shall:
1235	1214		1169 (A) submit to the jurisdiction of a court of competent jurisdiction in a state of the
1236	1215		1170United States;
1237	1216		1171 (B) comply with all requirements necessary to give the court jurisdiction; and
1238		-	1172 (C) abide by the final decision of the court or of an appellate court in the event of an
	1217	+	1172 (C) abide by the final decision of the court or of an appellate court in the event of an 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1218	+	- 39 -
1239	1219		1173appeal; and
1240	1220		1174 (ii) to designate the commissioner or a specific attorney licensed to practice law in this
1241	1221		1175state as its attorney upon whom may be served lawful process in an action, suit, or proceeding
1242	1222		1176instituted by or on behalf of the ceding company.
1243	1223		1177 (12) Submitting to the jurisdiction of Utah courts under Subsection (11) does not
1244	1224		1178override a duty or right of a party under the reinsurance contract, including a requirement that
1245	1225		1179the parties arbitrate their disputes.
1246	1226		1180 (13) (a) If an assuming insurer does not meet the requirements of Subsection (3), (4),
1247	1227		1181(5), or (8), the credit permitted by Subsection (6) or (7) may not be allowed unless the
1248	1228		1182assuming insurer agrees in the trust instrument to the conditions described in Subsections
1249	1229		1183(13)(b) through (e).
1250	1230		1184 (b) (i) Notwithstanding any other provision in the trust instrument, if an event
1251	1231		1185described in Subsection (13)(b)(ii) occurs the trustee shall comply with:
1252	1232		1186 (A) an order of the commissioner with regulatory oversight over the trust; or
1253	1233		1187 (B) an order of a court of competent jurisdiction directing the trustee to transfer to the
1254	1234		1188commissioner with regulatory oversight all of the assets of the trust fund.
1255		-	1189 (ii) This Subsection (13)(b) applies if: Enrolled Copy H.B. 410
1256		-	- 45 -
	1235	+	1189 (ii) This Subsection (13)(b) applies if:
1257	1236		1190 (A) the trust fund is inadequate because the trust contains an amount less than the
1258	1237		1191amount required by Subsection (6)(d); or
1259	1238		1192 (B) the grantor of the trust is:
1260	1239		1193 (I) declared insolvent; or
1261	1240		1194 (II) placed into receivership, rehabilitation, liquidation, or similar proceeding under the
1262	1241		1195laws of its state or country of domicile.
1263	1242		1196 (c) The assets of a trust fund described in Subsection (13)(b) shall be distributed by and
1264	1243		1197a claim shall be filed with and valued by the commissioner with regulatory oversight in
1265	1244		1198accordance with the laws of the state in which the trust is domiciled that are applicable to the
1266	1245		1199liquidation of a domestic insurance company.
1267	1246		1200 (d) If the commissioner with regulatory oversight determines that the assets of the trust
1268	1247		1201fund, or any part of the assets, are not necessary to satisfy the claims of the one or more United
1269	1248		1202States ceding insurers of the grantor of the trust, the assets, or a part of the assets, shall be
1270		-	1203returned by the commissioner with regulatory oversight to the trustee for distribution in
	1249	+	1203returned by the commissioner with regulatory oversight to the trustee for distribution in 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1250	+	- 40 -
1271	1251		1204accordance with the trust instrument.
1272	1252		1205 (e) A grantor shall waive any right otherwise available to the grantor under United
1273	1253		1206States law that is inconsistent with this Subsection (13).
1274	1254		1207 (14) (a) If an accredited or certified reinsurer ceases to meet the requirements for
1275	1255		1208accreditation or certification, the commissioner may suspend or revoke the reinsurer's
1276	1256		1209accreditation or certification.
1277	1257		1210 (b) The commissioner shall give the reinsurer notice and opportunity for hearing.
1278	1258		1211 (c) The suspension or revocation may not take effect until after the day on which the
1279	1259		1212commissioner issues an order after a hearing, unless:
1280	1260		1213 (i) the reinsurer waives the reinsurer's right to hearing;
1281	1261		1214 (ii) the commissioner's order is based on:
1282	1262		1215 (A) regulatory action by the reinsurer's domiciliary jurisdiction; or
1283		-	1216 (B) the voluntary surrender or termination of the reinsurer's eligibility to transact H.B. 410
1284		-	Enrolled Copy
1285		-	- 46 -
	1263	+	1216 (B) the voluntary surrender or termination of the reinsurer's eligibility to transact
1286	1264		1217insurance or reinsurance business in its domiciliary jurisdiction or primary certifying state
1287	1265		1218under Subsection (7)(g); or
1288	1266		1219 (iii) the commissioner's finding that an emergency requires immediate action and a
1289	1267		1220court of competent jurisdiction has not stayed the commissioner's action.
1290	1268		1221 (d) While a reinsurer's accreditation or certification is suspended, no reinsurance
1291	1269		1222contract issued or renewed after the effective date of the suspension qualifies for credit except
1292	1270		1223to the extent that the reinsurer's obligations under the contract are secured in accordance with
1293	1271		1224Section 31A-17-404.1.
1294	1272		1225 (e) If a reinsurer's accreditation or certification is revoked, no credit for reinsurance
1295	1273		1226may be granted after the effective date of the revocation except to the extent that the reinsurer's
1296	1274		1227obligations under the contract are secured in accordance with Subsection (7)(f) or Section
1297	1275		122831A-17-404.1.
1298	1276		1229 (15) (a) A ceding insurer shall take steps to manage the ceding insurer's reinsurance
1299	1277		1230recoverables proportionate to the ceding insurer's own book of business.
1300	1278		1231 (b) (i) A domestic ceding insurer shall notify the commissioner within 30 days after the
1301	1279		1232day on which reinsurance recoverables from any single assuming insurer, or group of affiliated
1302	1280		1233assuming insurers:
1303		-	1234 (A) exceeds 50% of the domestic ceding insurer's last reported surplus to
	1281	+	1234 (A) exceeds 50% of the domestic ceding insurer's last reported surplus to 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1282	+	- 41 -
1304	1283		1235policyholders; or
1305	1284		1236 (B) after it is determined that reinsurance recoverables from any single assuming
1306	1285		1237insurer, or group of affiliated assuming insurers, is likely to exceed 50% of the domestic ceding
1307	1286		1238insurer's last reported surplus to policyholders.
1308	1287		1239 (ii) The notification required by Subsection (15)(b)(i) shall demonstrate that the
1309	1288		1240exposure is safely managed by the domestic ceding insurer.
1310	1289		1241 (c) A ceding insurer shall take steps to diversify the ceding insurer's reinsurance
1311	1290		1242program.
1312		-	1243 (d) (i) A domestic ceding insurer shall notify the commissioner within 30 days after the Enrolled Copy H.B. 410
1313		-	- 47 -
	1291	+	1243 (d) (i) A domestic ceding insurer shall notify the commissioner within 30 days after the
1314	1292		1244day on which the ceding insurer cedes or is likely to cede more than 20% of the ceding insurer's
1315	1293		1245gross written premium in the prior calendar year to any:
1316	1294		1246 (A) single assuming insurer; or
1317	1295		1247 (B) group of affiliated assuming insurers.
1318	1296		1248 (ii) The notification shall demonstrate that the exposure is safely managed by the
1319	1297		1249domestic ceding insurer.
1320	1298		1250 (16) A ceding insurer licensed under Chapter 5, Domestic Stock and Mutual Insurance
1321	1299		1251Corporations, Chapter 7, Nonprofit Health Service Insurance Corporations, Chapter 8, Health
1322	1300		1252Maintenance Organizations and Limited Health Plans, or Chapter 9, Insurance Fraternals, [or
1323	1301		1253Chapter 14, Foreign Insurers is not] may be allowed credit if:
1324	1302		1254 (a) the reinsurance is ceded to an assuming domestic [or foreign] captive insurer[,
1325	1303		1255unless]; and
1326	1304		1256 (b) the assuming domestic [or foreign] captive insurer complies with:
1327	1305		1257 (i) Sections 31A-2-202 through 31A-2-205;
1328	1306		1258 [(a)] (ii) Chapter 4, Insurers in General;
1329	1307		1259 [(b)] (iii) Chapter 16, Insurance Holding Companies;
1330	1308		1260 [(c)] (iv) Chapter 16a, Risk Management and Own Risk and Solvency Assessment Act;
1331	1309		1261 [(d)] (v) Chapter 17, Determination of Financial Condition; [and]
1332	1310		1262 [(e)] (vi) Chapter 18, Investments[.]; and
1333	1311		1263 (vii) any other requirement that, in the commissioner's discretion, is necessary to
1334	1312		1264promote the captive insurer's solvency.
1335		-	1265 Section 7. Section 31A-19a-209 is amended to read:
	1313	+	1265 Section 7. Section 31A-19a-209 is amended to read: 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1314	+	- 42 -
1336	1315		1266 31A-19a-209. Special provisions for title insurance.
1337	1316		1267 (1) (a) (i) The Title and Escrow Commission [shall adopt rules] may make rules, in
1338	1317		1268accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and subject to
1339	1318		1269Section 31A-2-404, establishing rate standards and rating methods [for individual title
1340		-	1270insurance producers and agency title insurance producers]. H.B. 410
1341		-	Enrolled Copy
1342		-	- 48 -
	1319	+	1270insurance producers and agency title insurance producers].
1343	1320		1271 (ii) The commissioner shall determine compliance with rate standards and rating
1344	1321		1272methods for title insurers, individual title insurance producers, and agency title insurance
1345	1322		1273producers.
1346	1323		1274 (b) In addition to the considerations in determining compliance with rate standards and
1347	1324		1275rating methods as set forth in Sections 31A-19a-201 and 31A-19a-202, including for title
1348	1325		1276insurers, the commissioner and the Title and Escrow Commission shall consider the costs and
1349	1326		1277expenses incurred by title insurers, individual title insurance producers, and agency title
1350	1327		1278insurance producers [peculiar] pertaining to the business of title insurance including:
1351	1328		1279 (i) the maintenance of title plants; and
1352	1329		1280 (ii) the examining of public records to determine insurability of title to real
1353	1330		1281[redevelopment] property.
1354	1331		1282 [(2) (a) A title insurer, an agency title insurance producer, or an individual title
1355	1332		1283insurance producer who is not an employee of a title insurer or who is not designated by an
1356	1333		1284agency title insurance producer shall file with the commissioner:]
1357	1334		1285 [(i) a schedule of the escrow charges that the title insurer, individual title insurance
1358	1335		1286producer, or agency title insurance producer proposes to use in this state for services performed
1359	1336		1287in connection with the issuance of policies of title insurance; and]
1360	1337		1288 [(ii) any changes to the schedule of the escrow charges described in Subsection
1361	1338		1289(2)(a)(i).]
1362	1339		1290 [(b) Except for a schedule filed by a title insurer under this Subsection (2), a schedule
1363	1340		1291filed under this Subsection (2) is subject to review by the Title and Escrow Commission.]
1364	1341		1292 [(c) (i) The schedule of escrow charges required to be filed by Subsection (2)(a)(i)
1365	1342		1293takes effect on the day on which the schedule of escrow charges is filed.]
1366	1343		1294 [(ii) Any changes to the schedule of the escrow charges required to be filed by
1367	1344		1295Subsection (2)(a)(ii) take effect on the day specified in the change to the schedule of escrow
1368		-	1296charges except that the effective date may not be less than 30 calendar days after the day on
1369		-	~~1297which the change to the schedule of escrow charges is filed.] Enrolled Copy H.B. 410~~
1370		-	~~- 49 -~~
	1345	+	1296charges except that the effective date may not be less than 30 calendar days after the day on 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1346	+	- 43 -
	1347	+	1297which the change to the schedule of escrow charges is filed.]
1371	1348		1298 [(3)] (2) A title insurer, individual title insurance producer, or agency title insurance
1372	1349		1299producer may not [file or] use any rate or other charge relating to the business of title
1373	1350		1300insurance, including rates or charges [filed] for escrow that would cause the title insurance
1374	1351		1301company, individual title insurance producer, or agency title insurance producer to:
1375	1352		1302 (a) operate at less than the cost of doing[:]
1376	1353		1303 [(i)] the insurance business; or
1377	1354		1304 [(ii) the escrow business; or]
1378	1355		1305 (b) fail to adequately underwrite a title insurance policy.
1379	1356		1306 [(4) (a) All or any of the schedule of rates or schedule of charges, including the
1380	1357		1307schedule of escrow charges, may be changed or amended at any time, subject to the limitations
1381	1358		1308in this Subsection (4).]
1382	1359		1309 [(b) Each change or amendment shall:]
1383	1360		1310 [(i) be filed with the commissioner, subject to review by the Title and Escrow
1384	1361		1311Commission; and]
1385	1362		1312 [(ii) state the effective date of the change or amendment, which may not be less than 30
1386	1363		1313calendar days after the day on which the change or amendment is filed.]
1387	1364		1314 [(c) Any change or amendment remains in force for a period of at least 90 calendar
1388	1365		1315days from the change or amendment's effective date.]
1389	1366		1316 [(5) While the schedule of rates and schedule of charges are effective, a copy of each
1390	1367		1317shall be:]
1391	1368		1318 [(a) retained in each of the offices of:]
1392	1369		1319 [(i) the title insurer in this state;]
1393	1370		1320 [(ii) the title insurer's individual title insurance producers or agency title insurance
1394	1371		1321producers in this state; and]
1395	1372		1322 [(b) upon request, furnished to the public.]
1396	1373		1323 [(6) Except in accordance with the schedules of rates and charges filed with the
1397		-	1324commissioner, a title insurer, individual title insurance producer, or agency title insurance H.B. 410
1398		-	Enrolled Copy
1399		-	- 50 -
	1374	+	1324commissioner, a title insurer, individual title insurance producer, or agency title insurance
1400	1375		1325producer may not make or impose any premium or other charge:]
1401	1376		1326 [(a) in connection with the issuance of a policy of title insurance; or]
1402		-	1327 [(b) for escrow services performed in connection with the issuance of a policy of title
	1377	+	1327 [(b) for escrow services performed in connection with the issuance of a policy of title 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1378	+	- 44 -
1403	1379		1328insurance.]
1404	1380		1329 Section 8. Section 31A-22-728 is enacted to read:
1405	1381		1330 31A-22-728. Large employer health benefit plan required report.
1406	1382		1331 (1) As used in this section:
1407	1383		1332 (a) "Claims run-out period" means the period beginning on the first day following the
1408	1384		1333last day of a plan year and ending on the 90th day following the last day of a plan year.
1409	1385		1334 (b) "Large employer" means an employer who:
1410	1386		1335 (i) with respect to a calendar year and to a plan year:
1411	1387		1336 (A) employed an average of at least 51 employees on a business day during the
1412	1388		1337preceding calendar year; and
1413	1389		1338 (B) employs at least one employee on the first day of the plan year; and
1414	1390		1339 (ii) has at least 51 but fewer than 100 enrolled eligible employees enrolled in a group
1415	1391		1340health benefit plan during each consecutive month during the plan year.
1416	1392		1341 (c) "Medical loss ratio" means a group health benefit plan's paid claims incurred during
1417	1393		1342a plan year, including the claims run-out period, divided by the total premium revenue
1418	1394		1343collected for the plan year.
1419		-	1344 (2) Except as provided in ~~Subsection~~ (6), beginning on January 1, 2024, an insurer ~~that~~
1420		-	~~1345offers~~ a large employer health benefit plan to a large employer shall annually provide a ~~report,~~
1421		-	~~1346upon~~ request of:
	1395	+	1344 (2) Except as provided in Subsections (6), beginning on January 1, 2024, an insurer
	1396	+	1345that offers a large employer health benefit plan to a large employer shall annually provide a
	1397	+	1346report, upon request of:
1422	1398		1347 (a) the large employer;
1423	1399		1348 (b) the large employer's appointed producer; or
1424	1400		1349 (c) the large employer's consultant.
1425	1401		1350 (3) The report described in Subsection (2) shall include:
1426		-	1351 (a) after the first renewal, the health benefit plan's aggregate performance from the Enrolled Copy H.B. 410
1427		-	- 51 -
	1402	+	1351 (a) after the first renewal, the health benefit plan's aggregate performance from the
1428	1403		1352immediately preceding plan year that describes whether the health benefit plan had a medical
1429	1404		1353loss ratio of:
1430	1405		1354 (i) less than 85%;
1431	1406		1355 (ii) between 85% and 125%; or
1432	1407		1356 (iii) greater than 125%; and
1433	1408		1357 (b) after the second renewal and each subsequent renewal thereafter, a summary of the
1434		-	1358health benefit plan's aggregate 24-month medical loss ratio from the immediately preceding
	1409	+	1358health benefit plan's aggregate 24-month medical loss ratio from the immediately preceding 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1410	+	- 45 -
1435	1411		1359two plan years combined.
1436	1412		1360 (4) An insurer that offers a large employer health benefit plan shall provide the
1437	1413		1361requested report described in Subsection (2) not less than 30 days after the claims run-out
1438	1414		1362period.
1439	1415		1363 (5) (a) The report described in Subsection (2) is proprietary to the large employer, the
1440	1416		1364large employer's appointed producer, or the large employer's consultant.
1441	1417		1365 (b) A person may not share the report described in Subsection (2) with a party other
1442	1418		1366than a party described in Subsection (5)(a).
1443	1419		1367 (6) An insurer is not required to provide a report as described in this section if:
1444	1420		1368 (a) the health benefit plan is a qualified health plan as defined in 45 C.F.R. Sec.
1445	1421		1369155.20;
1446	1422		1370 (b) the health benefit plan is issued to a group other than an employee group described
1447	1423		1371in Section 31A-22-502;
1448	1424		1372 (c) the large employer has not had continuous large employer health benefit plan
1449	1425		1373coverage with the insurer for at least 18 months before the date on which the large employer
1450	1426		1374requests the report;
1451	1427		1375 (d) the large employer does not renew coverage with the insurer; or
1452	1428		1376 (e) the insurer reasonably believes that providing the report would disclose information
1453	1429		1377described in Subsection 13-61-102(2)(g).
1454		-	1378 (7) An insurer that provides a report in compliance with this section is immune from H.B. 410
1455		-	Enrolled Copy
1456		-	- 52 -
	1430	+	1378 (7) An insurer that provides a report in compliance with this section is immune from
1457	1431		1379civil liability for the insurer's acts or omissions in providing information required under
1458	1432		1380Subsection (3).
1459	1433		1381 Section 9. Section 31A-23a-106 is amended to read:
1460	1434		1382 31A-23a-106. License types.
1461	1435		1383 (1) (a) A resident or nonresident license issued under this chapter shall be issued under
1462	1436		1384the license types described under Subsection (2).
1463	1437		1385 (b) A license type and a line of authority pertaining to a license type describe the type
1464	1438		1386of licensee and the lines of business that a licensee may sell, solicit, or negotiate. A license
1465	1439		1387type is intended to describe the matters to be considered under any education, examination, and
1466	1440		1388training required of a license applicant under Sections 31A-23a-108, 31A-23a-202, and
1467		-	138931A-23a-203.
	1441	+	138931A-23a-203. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1442	+	- 46 -
1468	1443		1390 (2) (a) A producer license type includes the following lines of authority:
1469	1444		1391 (i) life insurance, including a nonvariable contract;
1470	1445		1392 (ii) variable contracts, including variable life and annuity, if the producer has the life
1471	1446		1393insurance line of authority;
1472	1447		1394 (iii) accident and health insurance, including a contract issued to a policyholder under
1473	1448		1395Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
1474	1449		1396Organizations and Limited Health Plans;
1475	1450		1397 (iv) property insurance;
1476	1451		1398 (v) casualty insurance, including a surety or other bond;
1477	1452		1399 (vi) title insurance under one or more of the following categories:
1478	1453		1400 (A) title examination, including authority to act as a title marketing representative;
1479	1454		1401 (B) escrow, including authority to act as a title marketing representative; and
1480	1455		1402 (C) title marketing representative only; and
1481	1456		1403 (vii) personal lines insurance.
1482	1457		1404 (b) A surplus lines producer license type includes the following lines of authority:
1483		-	1405 (i) property insurance, if the person holds an underlying producer license with the Enrolled Copy H.B. 410
1484		-	- 53 -
	1458	+	1405 (i) property insurance, if the person holds an underlying producer license with the
1485	1459		1406property line of insurance; and
1486	1460		1407 (ii) casualty insurance, if the person holds an underlying producer license with the
1487	1461		1408casualty line of authority.
1488	1462		1409 (c) A limited line producer license type includes the following limited lines of
1489	1463		1410authority:
1490	1464		1411 (i) limited line credit insurance;
1491	1465		1412 (ii) travel insurance, as set forth in Part 9, Travel Insurance Act;
1492	1466		1413 (iii) motor club insurance;
1493	1467		1414 (iv) car rental related insurance;
1494	1468		1415 (v) legal expense insurance;
1495	1469		1416 (vi) crop insurance;
1496	1470		1417 (vii) self-service storage insurance;
1497	1471		1418 (viii) bail bond producer;
1498	1472		1419 (ix) guaranteed asset protection waiver; [and]
1499		-	1420 (x) portable electronics insurance[.]; and
	1473	+	1420 (x) portable electronics insurance[.]; and 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1474	+	- 47 -
1500	1475		1421 (xi) pet insurance.
1501	1476		1422 (d) A consultant license type includes the following lines of authority:
1502	1477		1423 (i) life insurance, including a nonvariable contract;
1503	1478		1424 (ii) variable contracts, including variable life and annuity, if the consultant has the life
1504	1479		1425insurance line of authority;
1505	1480		1426 (iii) accident and health insurance, including a contract issued to a policyholder under
1506	1481		1427Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
1507	1482		1428Organizations and Limited Health Plans;
1508	1483		1429 (iv) property insurance;
1509	1484		1430 (v) casualty insurance, including a surety or other bond; and
1510	1485		1431 (vi) personal lines insurance.
1511		-	1432 (e) A managing general agent license type includes the following lines of authority: H.B. 410
1512		-	Enrolled Copy
1513		-	- 54 -
	1486	+	1432 (e) A managing general agent license type includes the following lines of authority:
1514	1487		1433 (i) life insurance, including a nonvariable contract;
1515	1488		1434 (ii) variable contracts, including variable life and annuity, if the managing general
1516	1489		1435agent has the life insurance line of authority;
1517	1490		1436 (iii) accident and health insurance, including a contract issued to a policyholder under
1518	1491		1437Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
1519	1492		1438Organizations and Limited Health Plans;
1520	1493		1439 (iv) property insurance;
1521	1494		1440 (v) casualty insurance, including a surety or other bond; and
1522	1495		1441 (vi) personal lines insurance.
1523	1496		1442 (f) A reinsurance intermediary license type includes the following lines of authority:
1524	1497		1443 (i) life insurance, including a nonvariable contract;
1525	1498		1444 (ii) variable contracts, including variable life and annuity, if the reinsurance
1526	1499		1445intermediary has the life insurance line of authority;
1527	1500		1446 (iii) accident and health insurance, including a contract issued to a policyholder under
1528	1501		1447Chapter 7, Nonprofit Health Service Insurance Corporations, or Chapter 8, Health Maintenance
1529	1502		1448Organizations and Limited Health Plans;
1530	1503		1449 (iv) property insurance;
1531	1504		1450 (v) casualty insurance, including a surety or other bond; and
1532		-	1451 (vi) personal lines insurance.
	1505	+	1451 (vi) personal lines insurance. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1506	+	- 48 -
1533	1507		1452 (g) A person who holds a license under Subsection (2)(a) has the qualifications
1534	1508		1453necessary to act as a holder of a license under Subsection (2)(c), except that the person may not
1535	1509		1454act under Subsection (2)(c)(viii) or (ix).
1536	1510		1455 (3) (a) The commissioner may by rule recognize other producer, surplus lines producer,
1537	1511		1456limited line producer, consultant, managing general agent, or reinsurance intermediary lines of
1538	1512		1457authority as to kinds of insurance not listed under Subsections (2)(a) through (f).
1539	1513		1458 (b) Notwithstanding Subsection (3)(a), for purposes of title insurance the Title and
1540		-	1459Escrow Commission may by rule, with the concurrence of the commissioner and subject to Enrolled Copy H.B. 410
1541		-	- 55 -
	1514	+	1459Escrow Commission may by rule, with the concurrence of the commissioner and subject to
1542	1515		1460Section 31A-2-404, recognize other categories for an individual title insurance producer or
1543	1516		1461agency title insurance producer line of authority not listed under Subsection (2)(a)(vi).
1544	1517		1462 (4) The variable contracts line of authority requires:
1545	1518		1463 (a) for a producer, licensure by the Financial Industry Regulatory Authority as a:
1546	1519		1464 (i) registered broker-dealer; or
1547	1520		1465 (ii) broker-dealer agent, with a current registration with a broker-dealer; and
1548	1521		1466 (b) for a consultant, registration with the Securities and Exchange Commission or
1549	1522		1467licensure by the Utah Division of Securities as an:
1550	1523		1468 (i) investment adviser; or
1551	1524		1469 (ii) investment adviser representative, with a current association with an investment
1552	1525		1470adviser.
1553	1526		1471 (5) A surplus lines producer is a producer who has a surplus lines license.
1554	1527		1472 Section 10. Section 31A-23a-111 is amended to read:
1555	1528		1473 31A-23a-111. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
1556	1529		1474terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
1557	1530		1475 (1) A license type issued under this chapter remains in force until:
1558	1531		1476 (a) revoked or suspended under Subsection (5);
1559	1532		1477 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
1560	1533		1478administrative action;
1561	1534		1479 (c) the licensee dies or is adjudicated incompetent as defined under:
1562	1535		1480 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
1563	1536		1481 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
1564		-	1482Minors;
	1537	+	1482Minors; 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1538	+	- 49 -
1565	1539		1483 (d) lapsed under Section 31A-23a-113; or
1566	1540		1484 (e) voluntarily surrendered.
1567	1541		1485 (2) The following may be reinstated within one year after the day on which the license
1568		-	1486is no longer in force: H.B. 410
1569		-	Enrolled Copy
1570		-	- 56 -
	1542	+	1486is no longer in force:
1571	1543		1487 (a) a lapsed license; or
1572	1544		1488 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
1573	1545		1489not be reinstated after the license period in which the license is voluntarily surrendered.
1574	1546		1490 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
1575	1547		1491license, submission and acceptance of a voluntary surrender of a license does not prevent the
1576	1548		1492department from pursuing additional disciplinary or other action authorized under:
1577	1549		1493 (a) this title; or
1578	1550		1494 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
1579	1551		1495Administrative Rulemaking Act.
1580	1552		1496 (4) A line of authority issued under this chapter remains in force until:
1581	1553		1497 (a) the qualifications pertaining to a line of authority are no longer met by the licensee;
1582	1554		1498[or]
1583	1555		1499 (b) the supporting license type:
1584	1556		1500 (i) is revoked or suspended under Subsection (5);
1585	1557		1501 (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
1586	1558		1502administrative action;
1587	1559		1503 (iii) lapses under Section 31A-23a-113; or
1588	1560		1504 (iv) is voluntarily surrendered; or
1589	1561		1505 (c) the licensee dies or is adjudicated incompetent as defined under:
1590	1562		1506 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
1591	1563		1507 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
1592	1564		1508Minors.
1593	1565		1509 (5) (a) If the commissioner makes a finding under Subsection (5)(b), as part of an
1594	1566		1510adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
1595	1567		1511commissioner may:
1596	1568		1512 (i) revoke:
1597		-	1513 (A) a license; or ~~Enrolled Copy~~ H.B. 410
1598		-	- 57 -
	1569	+	1513 (A) a license; or 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1570	+	- 50 -
1599	1571		1514 (B) a line of authority;
1600	1572		1515 (ii) suspend for a specified period of 12 months or less:
1601	1573		1516 (A) a license; or
1602	1574		1517 (B) a line of authority;
1603	1575		1518 (iii) limit in whole or in part:
1604	1576		1519 (A) a license; or
1605	1577		1520 (B) a line of authority;
1606	1578		1521 (iv) deny a license application;
1607	1579		1522 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
1608	1580		1523 (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
1609	1581		1524Subsection (5)(a)(v).
1610	1582		1525 (b) The commissioner may take an action described in Subsection (5)(a) if the
1611	1583		1526commissioner finds that the licensee or license applicant:
1612	1584		1527 (i) is unqualified for a license or line of authority under Section 31A-23a-104,
1613	1585		152831A-23a-105, or 31A-23a-107;
1614	1586		1529 (ii) violates:
1615	1587		1530 (A) an insurance statute;
1616	1588		1531 (B) a rule that is valid under Subsection 31A-2-201(3); or
1617	1589		1532 (C) an order that is valid under Subsection 31A-2-201(4);
1618	1590		1533 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
1619	1591		1534delinquency proceedings in any state;
1620	1592		1535 (iv) fails to pay a final judgment rendered against the person within 60 days after the
1621	1593		1536day on which the judgment became final;
1622	1594		1537 (v) fails to meet the same good faith obligations in claims settlement that is required of
1623	1595		1538admitted insurers;
1624	1596		1539 (vi) is affiliated with and under the same general management or interlocking
1625		-	1540directorate or ownership as another insurance producer that transacts business in this state H.B. 410
1626		-	Enrolled Copy
1627		-	- 58 -
	1597	+	1540directorate or ownership as another insurance producer that transacts business in this state
1628	1598		1541without a license;
1629	1599		1542 (vii) refuses:
1630	1600		1543 (A) to be examined; or
1631		-	1544 (B) to produce its accounts, records, and files for examination;
	1601	+	1544 (B) to produce its accounts, records, and files for examination; 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1602	+	- 51 -
1632	1603		1545 (viii) has an officer who refuses to:
1633	1604		1546 (A) give information with respect to the insurance producer's affairs; or
1634	1605		1547 (B) perform any other legal obligation as to an examination;
1635	1606		1548 (ix) provides information in the license application that is:
1636	1607		1549 (A) incorrect;
1637	1608		1550 (B) misleading;
1638	1609		1551 (C) incomplete; or
1639	1610		1552 (D) materially untrue;
1640	1611		1553 (x) violates an insurance law, valid rule, or valid order of another regulatory agency in
1641	1612		1554any jurisdiction;
1642	1613		1555 (xi) obtains or attempts to obtain a license through misrepresentation or fraud;
1643	1614		1556 (xii) improperly withholds, misappropriates, or converts money or properties received
1644	1615		1557in the course of doing insurance business;
1645	1616		1558 (xiii) intentionally misrepresents the terms of an actual or proposed:
1646	1617		1559 (A) insurance contract;
1647	1618		1560 (B) application for insurance; or
1648	1619		1561 (C) life settlement;
1649	1620		1562 (xiv) has been convicted of, or has entered a plea in abeyance as defined in Section
1650	1621		156377-2a-1 to:
1651	1622		1564 (A) a felony; or
1652	1623		1565 (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
1653	1624		1566 (xv) admits or is found to have committed an insurance unfair trade practice or fraud;
1654		-	1567 (xvi) in the conduct of business in this state or elsewhere: Enrolled Copy H.B. 410
1655		-	- 59 -
	1625	+	1567 (xvi) in the conduct of business in this state or elsewhere:
1656	1626		1568 (A) uses fraudulent, coercive, or dishonest practices; or
1657	1627		1569 (B) demonstrates incompetence, untrustworthiness, or financial irresponsibility;
1658	1628		1570 (xvii) has had an insurance license or other professional or occupational license, or an
1659	1629		1571equivalent to an insurance license or registration, or other professional or occupational license
1660	1630		1572or registration:
1661	1631		1573 (A) denied;
1662	1632		1574 (B) suspended;
1663		-	1575 (C) revoked; or
	1633	+	1575 (C) revoked; or 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1634	+	- 52 -
1664	1635		1576 (D) surrendered to resolve an administrative action;
1665	1636		1577 (xviii) forges another's name to:
1666	1637		1578 (A) an application for insurance; or
1667	1638		1579 (B) a document related to an insurance transaction;
1668	1639		1580 (xix) improperly uses notes or another reference material to complete an examination
1669	1640		1581for an insurance license;
1670	1641		1582 (xx) knowingly accepts insurance business from an individual who is not licensed;
1671	1642		1583 (xxi) fails to comply with an administrative or court order imposing a child support
1672	1643		1584obligation;
1673	1644		1585 (xxii) fails to:
1674	1645		1586 (A) pay state income tax; or
1675	1646		1587 (B) comply with an administrative or court order directing payment of state income
1676	1647		1588tax;
1677	1648		1589 (xxiii) has been convicted of violating the federal Violent Crime Control and Law
1678	1649		1590Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
1679	1650		1591in the business of insurance or participate in such business as required by 18 U.S.C. Sec. 1033;
1680	1651		1592 (xxiv) engages in a method or practice in the conduct of business that endangers the
1681	1652		1593legitimate interests of customers and the public; or
1682		-	1594 (xxv) has been convicted of any criminal felony involving dishonesty or breach of trust H.B. 410
1683		-	Enrolled Copy
1684		-	- 60 -
	1653	+	1594 (xxv) has been convicted of any criminal felony involving dishonesty or breach of trust
1685	1654		1595and has not obtained written consent to engage in the business of insurance or participate in
1686	1655		1596such business as required by 18 U.S.C. Sec. 1033.
1687	1656		1597 (c) For purposes of this section, if a license is held by an agency, both the agency itself
1688	1657		1598and any individual designated under the license are considered to be the holders of the license.
1689	1658		1599 (d) If an individual designated under the agency license commits an act or fails to
1690	1659		1600perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
1691	1660		1601the commissioner may suspend, revoke, or limit the license of:
1692	1661		1602 (i) the individual;
1693	1662		1603 (ii) the agency, if the agency:
1694	1663		1604 (A) is reckless or negligent in its supervision of the individual; or
1695	1664		1605 (B) knowingly participates in the act or failure to act that is the ground for suspending,
1696		-	1606revoking, or limiting the license; or
	1665	+	1606revoking, or limiting the license; or 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1666	+	- 53 -
1697	1667		1607 (iii) (A) the individual; and
1698	1668		1608 (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
1699	1669		1609 (6) A licensee under this chapter is subject to the penalties for acting as a licensee
1700	1670		1610without a license if:
1701	1671		1611 (a) the licensee's license is:
1702	1672		1612 (i) revoked;
1703	1673		1613 (ii) suspended;
1704	1674		1614 (iii) limited;
1705	1675		1615 (iv) surrendered in lieu of administrative action;
1706	1676		1616 (v) lapsed; or
1707	1677		1617 (vi) voluntarily surrendered; and
1708	1678		1618 (b) the licensee:
1709	1679		1619 (i) continues to act as a licensee; or
1710	1680		1620 (ii) violates the terms of the license limitation.
1711		-	1621 (7) A licensee under this chapter shall immediately report to the commissioner: Enrolled Copy H.B. 410
1712		-	- 61 -
	1681	+	1621 (7) A licensee under this chapter shall immediately report to the commissioner:
1713	1682		1622 (a) a revocation, suspension, or limitation of the person's license in another state, the
1714	1683		1623District of Columbia, or a territory of the United States;
1715	1684		1624 (b) the imposition of a disciplinary sanction imposed on that person by another state,
1716	1685		1625the District of Columbia, or a territory of the United States; or
1717	1686		1626 (c) a judgment or injunction entered against that person on the basis of conduct
1718	1687		1627involving:
1719	1688		1628 (i) fraud;
1720	1689		1629 (ii) deceit;
1721	1690		1630 (iii) misrepresentation; or
1722	1691		1631 (iv) a violation of an insurance law or rule.
1723	1692		1632 (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
1724	1693		1633license in lieu of administrative action may specify a time, not to exceed five years, within
1725	1694		1634which the former licensee may not apply for a new license.
1726	1695		1635 (b) If no time is specified in an order or agreement described in Subsection (8)(a), the
1727	1696		1636former licensee may not apply for a new license for five years from the day on which the order
1728		-	1637or agreement is made without the express approval by the commissioner.
	1697	+	1637or agreement is made without the express approval by the commissioner. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1698	+	- 54 -
1729	1699		1638 (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
1730	1700		1639a license issued under this part if so ordered by a court.
1731	1701		1640 (10) The commissioner shall by rule prescribe the license renewal and reinstatement
1732	1702		1641procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
1733	1703		1642 Section 11. Section 31A-23a-406 is amended to read:
1734	1704		1643 31A-23a-406. Title insurance producer's business.
1735	1705		1644 (1) As used in this section:
1736	1706		1645 (a) "Automated clearing house network" or "ACH network" means a national
1737	1707		1646electronic funds transfer system regulated by the Federal Reserve and the Office of the
1738	1708		1647Comptroller of the Currency.
1739		-	1648 (b) "Depository institution" means the same as that term is defined in Section 7-1-103. H.B. 410
1740		-	Enrolled Copy
1741		-	- 62 -
	1709	+	1648 (b) "Depository institution" means the same as that term is defined in Section 7-1-103.
1742	1710		1649 (c) "Funds transfer system" means the same as that term is defined in Section 7-1-103.
1743	1711		1650 [(1)] (2) An individual title insurance producer or agency title insurance producer may
1744	1712		1651do escrow involving real property transactions if all of the following exist:
1745	1713		1652 (a) the individual title insurance producer or agency title insurance producer is licensed
1746	1714		1653with:
1747	1715		1654 (i) the title line of authority; and
1748	1716		1655 (ii) the escrow subline of authority;
1749	1717		1656 (b) the individual title insurance producer or agency title insurance producer is
1750	1718		1657appointed by a title insurer authorized to do business in the state;
1751	1719		1658 (c) except as provided in Subsection [(3)] (4), the individual title insurance producer or
1752	1720		1659agency title insurance producer issues one or more of the following as part of the transaction:
1753	1721		1660 (i) an owner's policy offering title insurance;
1754	1722		1661 (ii) a lender's policy offering title insurance; or
1755	1723		1662 (iii) if the transaction does not involve a transfer of ownership, an endorsement to an
1756	1724		1663owner's or a lender's policy offering title insurance;
1757	1725		1664 (d) money deposited with the individual title insurance producer or agency title
1758	1726		1665insurance producer in connection with any escrow is deposited:
1759	1727		1666 (i) in a federally insured depository institution, as defined in Section 7-1-103, that:
1760	1728		1667 (A) has [an office] a branch in this state, if the individual title insurance producer or
1761		-	1668agency title insurance producer depositing the money is a resident licensee; and
	1729	+	1668agency title insurance producer depositing the money is a resident licensee; and 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1730	+	- 55 -
1762	1731		1669 (B) is authorized by the depository institution's primary regulator to engage in trust
1763	1732		1670business, as defined in Section 7-5-1, in this state; and
1764	1733		1671 (ii) in a trust account that is separate from all other trust account money that is not
1765	1734		1672related to real estate transactions;
1766	1735		1673 (e) money deposited with the individual title insurance producer or agency title
1767	1736		1674insurance producer in connection with any escrow is the property of the one or more persons
1768		-	1675entitled to the money under the provisions of the escrow; [and] Enrolled Copy H.B. 410
1769		-	- 63 -
	1737	+	1675entitled to the money under the provisions of the escrow; [and]
1770	1738		1676 (f) money deposited with the individual title insurance producer or agency title
1771	1739		1677insurance producer in connection with an escrow is segregated escrow by escrow in the records
1772	1740		1678of the individual title insurance producer or agency title insurance producer;
1773	1741		1679 (g) earnings on money held in escrow may be paid out of the escrow account to any
1774	1742		1680person in accordance with the conditions of the escrow;
1775	1743		1681 (h) the escrow does not require the individual title insurance producer or agency title
1776	1744		1682insurance producer to hold:
1777	1745		1683 (i) construction money; or
1778	1746		1684 (ii) money held for exchange under Section 1031, Internal Revenue Code; and
1779	1747		1685 (i) the individual title insurance producer or agency title insurance producer shall
1780	1748		1686maintain a physical office in Utah staffed by a person with an escrow subline of authority who
1781	1749		1687processes the escrow.
1782	1750		1688 [(2)] (3) Notwithstanding Subsection [(1)] (2), an individual title insurance producer or
1783	1751		1689agency title insurance producer may engage in the escrow business if:
1784	1752		1690 (a) the escrow involves:
1785	1753		1691 (i) a mobile home;
1786	1754		1692 (ii) a grazing right;
1787	1755		1693 (iii) a water right; or
1788	1756		1694 (iv) other personal property authorized by the commissioner; and
1789	1757		1695 (b) the individual title insurance producer or agency title insurance producer complies
1790	1758		1696with this section except for Subsection [(1)(c)] (2)(c).
1791	1759		1697 [(3)] (4) (a) Subsection [(1)(c)] (2)(c) does not apply if the transaction is for the
1792	1760		1698transfer of real property from the School and Institutional Trust Lands Administration.
1793		-	1699 (b) This subsection does not prohibit an individual title insurance producer or agency
	1761	+	1699 (b) This subsection does not prohibit an individual title insurance producer or agency 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1762	+	- 56 -
1794	1763		1700title insurance producer from issuing a policy described in Subsection [(1)(c)] (2)(c) as part of a
1795	1764		1701transaction described in Subsection [(3)(a)] (4)(a).
1796		-	1702 [(4)] (5) Money held in escrow: H.B. 410
1797		-	Enrolled Copy
1798		-	- 64 -
	1765	+	1702 [(4)] (5) Money held in escrow:
1799	1766		1703 (a) is not subject to any debts of the individual title insurance producer or agency title
1800	1767		1704insurance producer;
1801	1768		1705 (b) may only be used to fulfill the terms of the individual escrow under which the
1802	1769		1706money is accepted; and
1803	1770		1707 (c) may not be used until the conditions of the escrow are met.
1804	1771		1708 [(5)] (6) Assets or property other than escrow money received by an individual title
1805	1772		1709insurance producer or agency title insurance producer in accordance with an escrow shall be
1806	1773		1710maintained in a manner that will:
1807	1774		1711 (a) reasonably preserve and protect the asset or property from loss, theft, or damages;
1808	1775		1712and
1809	1776		1713 (b) otherwise comply with the general duties and responsibilities of a fiduciary or
1810	1777		1714bailee.
1811	1778		1715 [(6)] (7) (a) A check from the trust account described in Subsection [(1)(d)] (2)(d) may
1812	1779		1716not be drawn, executed, or dated, or money otherwise disbursed unless the segregated escrow
1813	1780		1717account from which money is to be disbursed contains a sufficient credit balance consisting of
1814	1781		1718collected and cleared money at the time the check is drawn, executed, or dated, or money is
1815	1782		1719otherwise disbursed.
1816	1783		1720 (b) As used in this Subsection [(6)] (7), money is considered to be "collected and
1817	1784		1721cleared," and may be disbursed as follows:
1818	1785		1722 (i) cash may be disbursed on the same day the cash is deposited;
1819	1786		1723 (ii) a wire transfer may be disbursed on the same day the wire transfer is deposited;
1820	1787		1724[and]
1821	1788		1725 (iii) the proceeds of one or more of the following financial instruments may be
1822	1789		1726disbursed on the same day the financial instruments are deposited if received from a single
1823	1790		1727party to the real estate transaction and if the aggregate of the financial instruments for the real
1824	1791		1728estate transaction is less than $10,000:
1825		-	1729 (A) a cashier's check, certified check, or official check that is drawn on an existing ~~Enrolled Copy H.B. 410~~
1826		-	~~- 65 -~~
1827		-	~~1730account at a federally insured financial institution;~~
	1792	+	1729 (A) a cashier's check, certified check, or official check that is drawn on an existing
	1793	+	1730account at a federally insured financial institution; 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1794	+	- 57 -
1828	1795		1731 (B) a check drawn on the trust account of a principal broker or associate broker
1829	1796		1732licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act, if the individual
1830	1797		1733title insurance producer or agency title insurance producer has reasonable and prudent grounds
1831	1798		1734to believe sufficient money will be available from the trust account on which the check is
1832	1799		1735drawn at the time of disbursement of proceeds from the individual title insurance producer or
1833	1800		1736agency title insurance producer's escrow account;
1834	1801		1737 (C) a personal check not to exceed $500 per closing; or
1835	1802		1738 (D) a check drawn on the escrow account of another individual title insurance producer
1836	1803		1739or agency title insurance producer, if the individual title insurance producer or agency title
1837	1804		1740insurance producer in the escrow transaction has reasonable and prudent grounds to believe
1838	1805		1741that sufficient money will be available for withdrawal from the account upon which the check
1839	1806		1742is drawn at the time of disbursement of money from the escrow account of the individual title
1840	1807		1743insurance producer or agency title insurance producer in the escrow transaction[.];
1841	1808		1744 (iv) deposits made through the ACH network may be disbursed on the same day the
1842	1809		1745deposit is made if:
1843	1810		1746 (A) the transferred funds remain uniquely designated and traceable throughout the
1844	1811		1747entire ACH network transfer process;
1845	1812		1748 (B) except as a function of the ACH network process, the transferred funds are not
1846	1813		1749subject to comingling or third party access during the transfer process;
1847	1814		1750 (C) the transferred funds are deposited into the title insurance producer's escrow
1848	1815		1751account and are available for disbursement; and
1849	1816		1752 (D) either the ACH network payment type or the title insurance producer's systems
1850	1817		1753prevent the transaction from being unilaterally canceled or reversed by the consumer once the
1851	1818		1754transferred funds are deposited to the individual title insurance producer or agency title
1852	1819		1755producer;
1853		-	1756 (v) deposits may be disbursed on the same day the deposit is made if the deposit is H.B. 410
1854		-	Enrolled Copy
1855		-	- 66 -
	1820	+	1756 (v) deposits may be disbursed on the same day the deposit is made if the deposit is
1856	1821		1757made via:
1857	1822		1758 (A) the Federal Reserve Bank through the Federal Reserve's funds transfer system; or
1858	1823		1759 (B) a funds transfer system provided by an association of banks.
1859	1824		1760 (c) A check or deposit not described in Subsection [(6)(b)] (7)(b) may be disbursed:
1860		-	1761 (i) within the time limits provided under the Expedited Funds Availability Act, 12
	1825	+	1761 (i) within the time limits provided under the Expedited Funds Availability Act, 12 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1826	+	- 58 -
1861	1827		1762U.S.C. Sec. 4001 et seq., as amended, and related regulations of the Federal Reserve System; or
1862	1828		1763 (ii) upon notification from the financial institution to which the money has been
1863	1829		1764deposited that final settlement has occurred on the deposited financial instrument.
1864	1830		1765 [(7)] (8) An individual title insurance producer or agency title insurance producer shall
1865	1831		1766maintain a record of a receipt or disbursement of escrow money.
1866	1832		1767 [(8)] (9) An individual title insurance producer or agency title insurance producer shall
1867	1833		1768comply with:
1868	1834		1769 (a) Section 31A-23a-409;
1869	1835		1770 (b) Title 46, Chapter 1, Notaries Public Reform Act; and
1870	1836		1771 (c) any rules adopted by the Title and Escrow Commission, subject to Section
1871	1837		177231A-2-404, that govern escrows.
1872	1838		1773 [(9)] (10) If an individual title insurance producer or agency title insurance producer
1873	1839		1774conducts a search for real estate located in the state, the individual title insurance producer or
1874	1840		1775agency title insurance producer shall conduct a reasonable search of the public records.
1875	1841		1776 Section 12. Section 31A-23a-409 is amended to read:
1876	1842		1777 31A-23a-409. Trust obligation for money collected.
1877	1843		1778 (1) (a) Subject to Subsection (7), a licensee is a trustee for money that is paid to,
1878	1844		1779received by, or collected by a licensee for forwarding to insurers or to insureds.
1879	1845		1780 (b) (i) Except as provided in Subsection (1)(b)(ii), a licensee may not commingle trust
1880	1846		1781funds with:
1881	1847		1782 (A) the licensee's own money; or
1882		-	1783 (B) money held in any other capacity. Enrolled Copy H.B. 410
1883		-	- 67 -
	1848	+	1783 (B) money held in any other capacity.
1884	1849		1784 (ii) This Subsection (1)(b) does not apply to:
1885	1850		1785 (A) amounts necessary to pay bank charges; and
1886	1851		1786 (B) money paid by insureds and belonging in part to the licensee as a fee or
1887	1852		1787commission.
1888	1853		1788 (c) Except as provided under Subsection (4), a licensee owes to insureds and insurers
1889	1854		1789the fiduciary duties of a trustee with respect to money to be forwarded to insurers or insureds
1890	1855		1790through the licensee.
1891	1856		1791 (d) (i) Unless money is sent to the appropriate payee by the close of the next business
1892		-	1792day after their receipt, the licensee shall deposit them in an account authorized under
	1857	+	1792day after their receipt, the licensee shall deposit them in an account authorized under 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1858	+	- 59 -
1893	1859		1793Subsection (2).
1894	1860		1794 (ii) Money deposited under this Subsection (1)(d) shall remain in an account
1895	1861		1795authorized under Subsection (2) until sent to the appropriate payee.
1896	1862		1796 (2) Money required to be deposited under Subsection (1) shall be deposited:
1897	1863		1797 (a) in a federally insured trust account in a depository institution, as defined in Section
1898	1864		17987-1-103, which:
1899	1865		1799 (i) has [an office] a branch in this state, if the [licensee] individual title insurance
1900	1866		1800producer or agency title insurance producer depositing the money is a resident licensee;
1901	1867		1801 (ii) has federal deposit insurance; and
1902	1868		1802 (iii) is authorized by its primary regulator to engage in the trust business, as defined by
1903	1869		1803Section 7-5-1, in this state; or
1904	1870		1804 (b) in some other account, that:
1905	1871		1805 (i) the commissioner approves by rule or order; and
1906	1872		1806 (ii) provides safety comparable to an account described in Subsection (2)(a).
1907	1873		1807 (3) It is not a violation of Subsection (2)(a) if the amounts in the accounts exceed the
1908	1874		1808amount of the federal insurance on the accounts.
1909	1875		1809 (4) A trust account into which money is deposited may be interest bearing. The
1910		-	1810interest accrued on the account may be paid to the licensee, so long as the licensee otherwise H.B. 410
1911		-	Enrolled Copy
1912		-	- 68 -
	1876	+	1810interest accrued on the account may be paid to the licensee, so long as the licensee otherwise
1913	1877		1811complies with this section and with the contract with the insurer.
1914	1878		1812 (5) A depository institution or other organization holding trust funds under this section
1915	1879		1813may not offset or impound trust account funds against debts and obligations incurred by the
1916	1880		1814licensee.
1917	1881		1815 (6) A licensee who, not being lawfully entitled to do so, diverts or appropriates any
1918	1882		1816portion of the money held under Subsection (1) to the licensee's own use, is guilty of theft
1919	1883		1817under Title 76, Chapter 6, Part 4, Theft. Section 76-6-412 applies in determining the
1920	1884		1818classification of the offense. Sanctions under Section 31A-2-308 also apply.
1921	1885		1819 (7) A nonresident licensee:
1922	1886		1820 (a) shall comply with Subsection (1)(a) by complying with the trust account
1923	1887		1821requirements of the nonresident licensee's home state; and
1924	1888		1822 (b) is not required to comply with the other provisions of this section.
1925		-	1823 Section 13. Section 31A-23a-415 is amended to read:
	1889	+	1823 Section 13. Section 31A-23a-415 is amended to read: 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1890	+	- 60 -
1926	1891		1824 31A-23a-415. Assessment on agency title insurance producers or title insurers --
1927	1892		1825Account created.
1928	1893		1826 (1) For purposes of this section:
1929	1894		1827 (a) "Premium" is as described in Subsection 59-9-101(3).
1930	1895		1828 (b) "Title insurer" means a person:
1931	1896		1829 (i) making any contract or policy of title insurance as:
1932	1897		1830 (A) insurer;
1933	1898		1831 (B) guarantor; or
1934	1899		1832 (C) surety;
1935	1900		1833 (ii) proposing to make any contract or policy of title insurance as:
1936	1901		1834 (A) insurer;
1937	1902		1835 (B) guarantor; or
1938	1903		1836 (C) surety; or
1939		-	1837 (iii) transacting or proposing to transact any phase of title insurance, including: Enrolled Copy H.B. 410
1940		-	- 69 -
	1904	+	1837 (iii) transacting or proposing to transact any phase of title insurance, including:
1941	1905		1838 (A) soliciting;
1942	1906		1839 (B) negotiating preliminary to execution;
1943	1907		1840 (C) executing of a contract of title insurance;
1944	1908		1841 (D) insuring; and
1945	1909		1842 (E) transacting matters subsequent to the execution of the contract and arising out of
1946	1910		1843the contract.
1947	1911		1844 (c) "Utah risks" means insuring, guaranteeing, or indemnifying with regard to real or
1948	1912		1845personal property located in Utah, an owner of real or personal property, the holders of liens or
1949	1913		1846encumbrances on that property, or others interested in the property against loss or damage
1950	1914		1847suffered by reason of:
1951	1915		1848 (i) liens or encumbrances upon, defects in, or the unmarketability of the title to the
1952	1916		1849property; or
1953	1917		1850 (ii) invalidity or unenforceability of any liens or encumbrances on the property.
1954	1918		1851 (2) (a) The commissioner may assess each title insurer, each individual title insurance
1955	1919		1852producer who is not an employee of a title insurer or who is not designated by an agency title
1956	1920		1853insurance producer, and each agency title insurance producer an annual assessment:
1957		-	1854 (i) determined by the Title and Escrow Commission:
	1921	+	1854 (i) determined by the Title and Escrow Commission: 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1922	+	- 61 -
1958	1923		1855 (A) after consultation with the commissioner; and
1959	1924		1856 (B) in accordance with this Subsection (2); and
1960	1925		1857 (ii) to be used for the purposes described in Subsection (3).
1961	1926		1858 (b) An agency title insurance producer and individual title insurance producer who is
1962	1927		1859not an employee of a title insurer or who is not designated by an agency title insurance
1963	1928		1860producer shall be assessed up to:
1964	1929		1861 (i) $250 for the first office in each county in which the agency title insurance producer
1965	1930		1862or individual title insurance producer maintains an office; and
1966	1931		1863 (ii) $150 for each additional office the agency title insurance producer or individual
1967		-	1864title insurance producer maintains in the county described in Subsection (2)(b)(i). H.B. 410
1968		-	Enrolled Copy
1969		-	- 70 -
	1932	+	1864title insurance producer maintains in the county described in Subsection (2)(b)(i).
1970	1933		1865 (c) A title insurer shall be assessed up to:
1971	1934		1866 (i) $250 for the first office in each county in which the title insurer maintains an office;
1972	1935		1867 (ii) $150 for each additional office the title insurer maintains in the county described in
1973	1936		1868Subsection (2)(c)(i); and
1974	1937		1869 (iii) an amount calculated by:
1975	1938		1870 (A) aggregating the assessments imposed on:
1976	1939		1871 (I) agency title insurance producers and individual title insurance producers under
1977	1940		1872Subsection (2)(b); and
1978	1941		1873 (II) title insurers under Subsections (2)(c)(i) and (2)(c)(ii);
1979	1942		1874 (B) subtracting the amount determined under Subsection (2)(c)(iii)(A) from the total
1980	1943		1875costs and expenses determined under Subsection (2)(d); and
1981	1944		1876 (C) multiplying:
1982	1945		1877 (I) the amount calculated under Subsection (2)(c)(iii)(B); and
1983	1946		1878 (II) the percentage of total premiums for title insurance on Utah risk that are premiums
1984	1947		1879of the title insurer.
1985	1948		1880 (d) Notwithstanding Section 31A-3-103 and subject to Section 31A-2-404, during the
1986	1949		1881first quarter of each fiscal year the Title and Escrow Commission [by rule shall establish] shall
1987	1950		1882approve the amount of costs and expenses described under Subsection (3) for the prior fiscal
1988	1951		1883year that will be covered by the assessment[, except the costs or expenses to be covered by the
1989	1952		1884assessment may not exceed the cost of one full-time equivalent position].
1990		-	1885 (e) (i) An individual licensed to practice law in Utah is exempt from the requirements
	1953	+	1885 (e) (i) An individual licensed to practice law in Utah is exempt from the requirements 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	1954	+	- 62 -
1991	1955		1886of this Subsection (2) if that person issues 12 or less policies during a 12-month period.
1992	1956		1887 (ii) In determining the number of policies issued by an individual licensed to practice
1993	1957		1888law in Utah for purposes of Subsection (2)(e)(i), if the individual issues a policy to more than
1994	1958		1889one party to the same closing, the individual is considered to have issued only one policy.
1995	1959		1890 (3) (a) Money received by the state under this section shall be deposited into the Title
1996		-	1891Licensee Enforcement Restricted Account. Enrolled Copy H.B. 410
1997		-	- 71 -
	1960	+	1891Licensee Enforcement Restricted Account.
1998	1961		1892 (b) There is created in the General Fund a restricted account known as the "Title
1999	1962		1893Licensee Enforcement Restricted Account."
2000	1963		1894 (c) The Title Licensee Enforcement Restricted Account shall consist of the money
2001	1964		1895received by the state under this section.
2002	1965		1896 (d) The commissioner shall administer the Title Licensee Enforcement Restricted
2003	1966		1897Account. Subject to appropriations by the Legislature, the commissioner shall use the money
2004	1967		1898deposited into the Title Licensee Enforcement Restricted Account only to pay for a cost or
2005	1968		1899expense incurred by the department in the administration, investigation, and enforcement of
2006	1969		1900laws governing individual title insurance producers, agency title insurance producers, or title
2007	1970		1901insurers.
2008	1971		1902 (e) An appropriation from the Title Licensee Enforcement Restricted Account is
2009	1972		1903nonlapsing.
2010	1973		1904 (4) The assessment imposed by this section shall be in addition to any premium
2011	1974		1905assessment imposed under Subsection 59-9-101(3).
2012	1975		1906 Section 14. Section 31A-23b-401 is amended to read:
2013	1976		1907 31A-23b-401. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
2014	1977		1908terminating a license -- Rulemaking for renewal or reinstatement.
2015	1978		1909 (1) A license as a navigator under this chapter remains in force until:
2016	1979		1910 (a) revoked or suspended under Subsection (4);
2017	1980		1911 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2018	1981		1912administrative action;
2019	1982		1913 (c) the licensee dies or is adjudicated incompetent as defined under:
2020	1983		1914 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2021	1984		1915 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2022		-	1916Minors;
	1985	+	1916Minors; 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	1986	+	- 63 -
2023	1987		1917 (d) lapsed under this section; or
2024		-	1918 (e) voluntarily surrendered. H.B. 410
2025		-	Enrolled Copy
2026		-	- 72 -
	1988	+	1918 (e) voluntarily surrendered.
2027	1989		1919 (2) The following may be reinstated within one year after the day on which the license
2028	1990		1920is no longer in force:
2029	1991		1921 (a) a lapsed license; or
2030	1992		1922 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
2031	1993		1923not be reinstated after the license period in which the license is voluntarily surrendered.
2032	1994		1924 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
2033	1995		1925license, submission and acceptance of a voluntary surrender of a license does not prevent the
2034	1996		1926department from pursuing additional disciplinary or other action authorized under:
2035	1997		1927 (a) this title; or
2036	1998		1928 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
2037	1999		1929Administrative Rulemaking Act.
2038	2000		1930 (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
2039	2001		1931adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
2040	2002		1932commissioner may:
2041	2003		1933 (i) revoke a license;
2042	2004		1934 (ii) suspend a license for a specified period of 12 months or less;
2043	2005		1935 (iii) limit a license in whole or in part;
2044	2006		1936 (iv) deny a license application;
2045	2007		1937 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
2046	2008		1938 (vi) take a combination of actions under Subsections (4)(a)(i) through (iv) and
2047	2009		1939Subsection (4)(a)(v).
2048	2010		1940 (b) The commissioner may take an action described in Subsection (4)(a) if the
2049	2011		1941commissioner finds that the licensee or license applicant:
2050	2012		1942 (i) is unqualified for a license under Section 31A-23b-204, 31A-23b-205, or
2051	2013		194331A-23b-206;
2052	2014		1944 (ii) violated:
2053		-	1945 (A) an insurance statute; Enrolled Copy H.B. 410
2054		-	- 73 -
	2015	+	1945 (A) an insurance statute;
2055	2016		1946 (B) a rule that is valid under Subsection 31A-2-201(3); or
2056		-	1947 (C) an order that is valid under Subsection 31A-2-201(4);
	2017	+	1947 (C) an order that is valid under Subsection 31A-2-201(4); 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2018	+	- 64 -
2057	2019		1948 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
2058	2020		1949delinquency proceedings in any state;
2059	2021		1950 (iv) failed to pay a final judgment rendered against the person in this state within 60
2060	2022		1951days after the day on which the judgment became final;
2061	2023		1952 (v) refused:
2062	2024		1953 (A) to be examined; or
2063	2025		1954 (B) to produce its accounts, records, and files for examination;
2064	2026		1955 (vi) had an officer who refused to:
2065	2027		1956 (A) give information with respect to the navigator's affairs; or
2066	2028		1957 (B) perform any other legal obligation as to an examination;
2067	2029		1958 (vii) provided information in the license application that is:
2068	2030		1959 (A) incorrect;
2069	2031		1960 (B) misleading;
2070	2032		1961 (C) incomplete; or
2071	2033		1962 (D) materially untrue;
2072	2034		1963 (viii) violated an insurance law, valid rule, or valid order of another regulatory agency
2073	2035		1964in any jurisdiction;
2074	2036		1965 (ix) obtained or attempted to obtain a license through misrepresentation or fraud;
2075	2037		1966 (x) improperly withheld, misappropriated, or converted money or properties received
2076	2038		1967in the course of doing insurance business;
2077	2039		1968 (xi) intentionally misrepresented the terms of an actual or proposed:
2078	2040		1969 (A) insurance contract;
2079	2041		1970 (B) application for insurance; or
2080	2042		1971 (C) application for public program;
2081		-	1972 (xii) has been convicted of, or has entered a plea in abeyance as defined in Section H.B. 410
2082		-	Enrolled Copy
2083		-	- 74 -
	2043	+	1972 (xii) has been convicted of, or has entered a plea in abeyance as defined in Section
2084	2044		197377-2a-1 to:
2085	2045		1974 (A) a felony; or
2086	2046		1975 (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
2087	2047		1976 (xiii) admitted or is found to have committed an insurance unfair trade practice or
2088	2048		1977fraud;
2089		-	1978 (xiv) in the conduct of business in this state or elsewhere:
	2049	+	1978 (xiv) in the conduct of business in this state or elsewhere: 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2050	+	- 65 -
2090	2051		1979 (A) used fraudulent, coercive, or dishonest practices; or
2091	2052		1980 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
2092	2053		1981 (xv) has had an insurance license, navigator license, or other professional or
2093	2054		1982occupational license or registration, or an equivalent of the same denied, suspended, revoked,
2094	2055		1983or surrendered to resolve an administrative action;
2095	2056		1984 (xvi) forged another's name to:
2096	2057		1985 (A) an application for insurance;
2097	2058		1986 (B) a document related to an insurance transaction;
2098	2059		1987 (C) a document related to an application for a public program; or
2099	2060		1988 (D) a document related to an application for premium subsidies;
2100	2061		1989 (xvii) improperly used notes or another reference material to complete an examination
2101	2062		1990for a license;
2102	2063		1991 (xviii) knowingly accepted insurance business from an individual who is not licensed;
2103	2064		1992 (xix) failed to comply with an administrative or court order imposing a child support
2104	2065		1993obligation;
2105	2066		1994 (xx) failed to:
2106	2067		1995 (A) pay state income tax; or
2107	2068		1996 (B) comply with an administrative or court order directing payment of state income
2108	2069		1997tax;
2109	2070		1998 (xxi) has been convicted of violating the federal Violent Crime Control and Law
2110		-	1999Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage Enrolled Copy H.B. 410
2111		-	- 75 -
	2071	+	1999Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
2112	2072		2000in the business of insurance or participate in such business as required by 18 U.S.C. Sec. 1033;
2113	2073		2001 (xxii) engaged in a method or practice in the conduct of business that endangered the
2114	2074		2002legitimate interests of customers and the public; or
2115	2075		2003 (xxiii) has been convicted of any criminal felony involving dishonesty or breach of
2116	2076		2004trust and has not obtained written consent to engage in the business of insurance or participate
2117	2077		2005in such business as required by 18 U.S.C. Sec. 1033.
2118	2078		2006 (c) For purposes of this section, if a license is held by an agency, both the agency itself
2119	2079		2007and any individual designated under the license are considered to be the holders of the license.
2120	2080		2008 (d) If an individual designated under the agency license commits an act or fails to
2121		-	2009perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
	2081	+	2009perform a duty that is a ground for suspending, revoking, or limiting the individual's license, 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2082	+	- 66 -
2122	2083		2010the commissioner may suspend, revoke, or limit the license of:
2123	2084		2011 (i) the individual;
2124	2085		2012 (ii) the agency, if the agency:
2125	2086		2013 (A) is reckless or negligent in its supervision of the individual; or
2126	2087		2014 (B) knowingly participates in the act or failure to act that is the ground for suspending,
2127	2088		2015revoking, or limiting the license; or
2128	2089		2016 (iii) (A) the individual; and
2129	2090		2017 (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
2130	2091		2018 (5) A licensee under this chapter is subject to the penalties for acting as a licensee
2131	2092		2019without a license if:
2132	2093		2020 (a) the licensee's license is:
2133	2094		2021 (i) revoked;
2134	2095		2022 (ii) suspended;
2135	2096		2023 (iii) surrendered in lieu of administrative action;
2136	2097		2024 (iv) lapsed; or
2137	2098		2025 (v) voluntarily surrendered; and
2138		-	2026 (b) the licensee: H.B. 410
2139		-	Enrolled Copy
2140		-	- 76 -
	2099	+	2026 (b) the licensee:
2141	2100		2027 (i) continues to act as a licensee; or
2142	2101		2028 (ii) violates the terms of the license limitation.
2143	2102		2029 (6) A licensee under this chapter shall immediately report to the commissioner:
2144	2103		2030 (a) a revocation, suspension, or limitation of the person's license in another state, the
2145	2104		2031District of Columbia, or a territory of the United States;
2146	2105		2032 (b) the imposition of a disciplinary sanction imposed on that person by another state,
2147	2106		2033the District of Columbia, or a territory of the United States; or
2148	2107		2034 (c) a judgment or injunction entered against that person on the basis of conduct
2149	2108		2035involving:
2150	2109		2036 (i) fraud;
2151	2110		2037 (ii) deceit;
2152	2111		2038 (iii) misrepresentation; or
2153	2112		2039 (iv) a violation of an insurance law or rule.
2154		-	2040 (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
	2113	+	2040 (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2114	+	- 67 -
2155	2115		2041license in lieu of administrative action may specify a time, not to exceed five years, within
2156	2116		2042which the former licensee may not apply for a new license.
2157	2117		2043 (b) If no time is specified in an order or agreement described in Subsection (7)(a), the
2158	2118		2044former licensee may not apply for a new license for five years from the day on which the order
2159	2119		2045or agreement is made without the express approval of the commissioner.
2160	2120		2046 (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2161	2121		2047a license issued under this chapter if so ordered by a court.
2162	2122		2048 (9) The commissioner shall by rule prescribe the license renewal and reinstatement
2163	2123		2049procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2164	2124		2050 Section 15. Section 31A-25-208 is amended to read:
2165	2125		2051 31A-25-208. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
2166	2126		2052terminating a license -- Rulemaking for renewal and reinstatement.
2167		-	2053 (1) A license type issued under this chapter remains in force until: Enrolled Copy H.B. 410
2168		-	- 77 -
	2127	+	2053 (1) A license type issued under this chapter remains in force until:
2169	2128		2054 (a) revoked or suspended under Subsection (4);
2170	2129		2055 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2171	2130		2056administrative action;
2172	2131		2057 (c) the licensee dies or is adjudicated incompetent as defined under:
2173	2132		2058 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2174	2133		2059 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2175	2134		2060Minors;
2176	2135		2061 (d) lapsed under Section 31A-25-210; or
2177	2136		2062 (e) voluntarily surrendered.
2178	2137		2063 (2) The following may be reinstated within one year after the day on which the license
2179	2138		2064is no longer in force:
2180	2139		2065 (a) a lapsed license; or
2181	2140		2066 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
2182	2141		2067not be reinstated after the license period in which the license is voluntarily surrendered.
2183	2142		2068 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
2184	2143		2069license, submission and acceptance of a voluntary surrender of a license does not prevent the
2185	2144		2070department from pursuing additional disciplinary or other action authorized under:
2186		-	2071 (a) this title; or
	2145	+	2071 (a) this title; or 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2146	+	- 68 -
2187	2147		2072 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
2188	2148		2073Administrative Rulemaking Act.
2189	2149		2074 (4) (a) If the commissioner makes a finding under Subsection (4)(b), as part of an
2190	2150		2075adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
2191	2151		2076commissioner may:
2192	2152		2077 (i) revoke a license;
2193	2153		2078 (ii) suspend a license for a specified period of 12 months or less;
2194	2154		2079 (iii) limit a license in whole or in part; or
2195		-	2080 (iv) deny a license application. H.B. 410
2196		-	Enrolled Copy
2197		-	- 78 -
	2155	+	2080 (iv) deny a license application.
2198	2156		2081 (b) The commissioner may take an action described in Subsection (4)(a) if the
2199	2157		2082commissioner finds that the licensee or license applicant:
2200	2158		2083 (i) is unqualified for a license under Section 31A-25-202, 31A-25-203, or 31A-25-204;
2201	2159		2084 (ii) has violated:
2202	2160		2085 (A) an insurance statute;
2203	2161		2086 (B) a rule that is valid under Subsection 31A-2-201(3); or
2204	2162		2087 (C) an order that is valid under Subsection 31A-2-201(4);
2205	2163		2088 (iii) is insolvent or the subject of receivership, conservatorship, rehabilitation, or other
2206	2164		2089delinquency proceedings in any state;
2207	2165		2090 (iv) fails to pay a final judgment rendered against the person in this state within 60
2208	2166		2091days after the day on which the judgment became final;
2209	2167		2092 (v) fails to meet the same good faith obligations in claims settlement that is required of
2210	2168		2093admitted insurers;
2211	2169		2094 (vi) is affiliated with and under the same general management or interlocking
2212	2170		2095directorate or ownership as another third party administrator that transacts business in this state
2213	2171		2096without a license;
2214	2172		2097 (vii) refuses:
2215	2173		2098 (A) to be examined; or
2216	2174		2099 (B) to produce its accounts, records, and files for examination;
2217	2175		2100 (viii) has an officer who refuses to:
2218	2176		2101 (A) give information with respect to the third party administrator's affairs; or
2219		-	2102 (B) perform any other legal obligation as to an examination;
	2177	+	2102 (B) perform any other legal obligation as to an examination; 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2178	+	- 69 -
2220	2179		2103 (ix) provides information in the license application that is:
2221	2180		2104 (A) incorrect;
2222	2181		2105 (B) misleading;
2223	2182		2106 (C) incomplete; or
2224		-	2107 (D) materially untrue; Enrolled Copy H.B. 410
2225		-	- 79 -
	2183	+	2107 (D) materially untrue;
2226	2184		2108 (x) has violated an insurance law, valid rule, or valid order of another regulatory
2227	2185		2109agency in any jurisdiction;
2228	2186		2110 (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
2229	2187		2111 (xii) has improperly withheld, misappropriated, or converted money or properties
2230	2188		2112received in the course of doing insurance business;
2231	2189		2113 (xiii) has intentionally misrepresented the terms of an actual or proposed:
2232	2190		2114 (A) insurance contract; or
2233	2191		2115 (B) application for insurance;
2234	2192		2116 (xiv) has been convicted of, or has entered a plea in abeyance as defined in Section
2235	2193		211777-2a-1 to:
2236	2194		2118 (A) a felony; or
2237	2195		2119 (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
2238	2196		2120 (xv) has admitted or been found to have committed an insurance unfair trade practice
2239	2197		2121or fraud;
2240	2198		2122 (xvi) in the conduct of business in this state or elsewhere has:
2241	2199		2123 (A) used fraudulent, coercive, or dishonest practices; or
2242	2200		2124 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
2243	2201		2125 (xvii) has had an insurance license or other professional or occupational license or
2244	2202		2126registration, or an equivalent of the same, denied, suspended, revoked, or surrendered to
2245	2203		2127resolve an administrative action;
2246	2204		2128 (xviii) has forged another's name to:
2247	2205		2129 (A) an application for insurance; or
2248	2206		2130 (B) a document related to an insurance transaction;
2249	2207		2131 (xix) has improperly used notes or any other reference material to complete an
2250	2208		2132examination for an insurance license;
2251		-	2133 (xx) has knowingly accepted insurance business from an individual who is not
2252		-	2134licensed; H.B. 410
2253		-	Enrolled Copy
2254		-	- 80 -
	2209	+	2133 (xx) has knowingly accepted insurance business from an individual who is not 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2210	+	- 70 -
	2211	+	2134licensed;
2255	2212		2135 (xxi) has failed to comply with an administrative or court order imposing a child
2256	2213		2136support obligation;
2257	2214		2137 (xxii) has failed to:
2258	2215		2138 (A) pay state income tax; or
2259	2216		2139 (B) comply with an administrative or court order directing payment of state income
2260	2217		2140tax;
2261	2218		2141 (xxiii) is convicted of violating the federal Violent Crime Control and Law
2262	2219		2142Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent to engage
2263	2220		2143in the business of insurance or participate in such business as required under 18 U.S.C. Sec.
2264	2221		21441033;
2265	2222		2145 (xxiv) has engaged in methods and practices in the conduct of business that endanger
2266	2223		2146the legitimate interests of customers and the public; or
2267	2224		2147 (xxv) has been convicted of a criminal felony involving dishonesty or breach of trust
2268	2225		2148and has not obtained written consent to engage in the business of insurance or participate in
2269	2226		2149such business as required under 18 U.S.C. Sec. 1033.
2270	2227		2150 (c) For purposes of this section, if a license is held by an agency, both the agency itself
2271	2228		2151and any individual designated under the license are considered to be the holders of the agency
2272	2229		2152license.
2273	2230		2153 (d) If an individual designated under the agency license commits an act or fails to
2274	2231		2154perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
2275	2232		2155the commissioner may suspend, revoke, or limit the license of:
2276	2233		2156 (i) the individual;
2277	2234		2157 (ii) the agency if the agency:
2278	2235		2158 (A) is reckless or negligent in its supervision of the individual; or
2279	2236		2159 (B) knowingly participated in the act or failure to act that is the ground for suspending,
2280	2237		2160revoking, or limiting the license; or
2281		-	2161 (iii) (A) the individual; and Enrolled Copy H.B. 410
2282		-	- 81 -
	2238	+	2161 (iii) (A) the individual; and
2283	2239		2162 (B) the agency if the agency meets the requirements of Subsection (4)(d)(ii).
2284	2240		2163 (5) A licensee under this chapter is subject to the penalties for acting as a licensee
2285		-	2164without a license if:
	2241	+	2164without a license if: 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2242	+	- 71 -
2286	2243		2165 (a) the licensee's license is:
2287	2244		2166 (i) revoked;
2288	2245		2167 (ii) suspended;
2289	2246		2168 (iii) limited;
2290	2247		2169 (iv) surrendered in lieu of administrative action;
2291	2248		2170 (v) lapsed; or
2292	2249		2171 (vi) voluntarily surrendered; and
2293	2250		2172 (b) the licensee:
2294	2251		2173 (i) continues to act as a licensee; or
2295	2252		2174 (ii) violates the terms of the license limitation.
2296	2253		2175 (6) A licensee under this chapter shall immediately report to the commissioner:
2297	2254		2176 (a) a revocation, suspension, or limitation of the person's license in any other state, the
2298	2255		2177District of Columbia, or a territory of the United States;
2299	2256		2178 (b) the imposition of a disciplinary sanction imposed on that person by any other state,
2300	2257		2179the District of Columbia, or a territory of the United States; or
2301	2258		2180 (c) a judgment or injunction entered against the person on the basis of conduct
2302	2259		2181involving:
2303	2260		2182 (i) fraud;
2304	2261		2183 (ii) deceit;
2305	2262		2184 (iii) misrepresentation; or
2306	2263		2185 (iv) a violation of an insurance law or rule.
2307	2264		2186 (7) (a) An order revoking a license under Subsection (4) or an agreement to surrender a
2308	2265		2187license in lieu of administrative action may specify a time, not to exceed five years, within
2309		-	2188which the former licensee may not apply for a new license. H.B. 410
2310		-	Enrolled Copy
2311		-	- 82 -
	2266	+	2188which the former licensee may not apply for a new license.
2312	2267		2189 (b) If no time is specified in the order or agreement described in Subsection (7)(a), the
2313	2268		2190former licensee may not apply for a new license for five years from the day on which the order
2314	2269		2191or agreement is made without the express approval of the commissioner.
2315	2270		2192 (8) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2316	2271		2193a license issued under this part if so ordered by the court.
2317	2272		2194 (9) The commissioner shall by rule prescribe the license renewal and reinstatement
2318		-	2195procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
	2273	+	2195procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2274	+	- 72 -
2319	2275		2196 Section 16. Section 31A-26-213 is amended to read:
2320	2276		2197 31A-26-213. Revoking, suspending, surrendering, lapsing, limiting, or otherwise
2321	2277		2198terminating a license -- Forfeiture -- Rulemaking for renewal or reinstatement.
2322	2278		2199 (1) A license type issued under this chapter remains in force until:
2323	2279		2200 (a) revoked or suspended under Subsection (5);
2324	2280		2201 (b) surrendered to the commissioner and accepted by the commissioner in lieu of
2325	2281		2202administrative action;
2326	2282		2203 (c) the licensee dies or is adjudicated incompetent as defined under:
2327	2283		2204 (i) Title 75, Chapter 5, Part 3, Guardians of Incapacitated Persons; or
2328	2284		2205 (ii) Title 75, Chapter 5, Part 4, Protection of Property of Persons Under Disability and
2329	2285		2206Minors;
2330	2286		2207 (d) lapsed under Section 31A-26-214.5; or
2331	2287		2208 (e) voluntarily surrendered.
2332	2288		2209 (2) The following may be reinstated within one year after the day on which the license
2333	2289		2210is no longer in force:
2334	2290		2211 (a) a lapsed license; or
2335	2291		2212 (b) a voluntarily surrendered license, except that a voluntarily surrendered license may
2336	2292		2213not be reinstated after the license period in which it is voluntarily surrendered.
2337	2293		2214 (3) Unless otherwise stated in a written agreement for the voluntary surrender of a
2338		-	2215license, submission and acceptance of a voluntary surrender of a license does not prevent the Enrolled Copy H.B. 410
2339		-	- 83 -
	2294	+	2215license, submission and acceptance of a voluntary surrender of a license does not prevent the
2340	2295		2216department from pursuing additional disciplinary or other action authorized under:
2341	2296		2217 (a) this title; or
2342	2297		2218 (b) rules made under this title in accordance with Title 63G, Chapter 3, Utah
2343	2298		2219Administrative Rulemaking Act.
2344	2299		2220 (4) A license classification issued under this chapter remains in force until:
2345	2300		2221 (a) the qualifications pertaining to a license classification are no longer met by the
2346	2301		2222licensee; or
2347	2302		2223 (b) the supporting license type:
2348	2303		2224 (i) is revoked or suspended under Subsection (5); or
2349	2304		2225 (ii) is surrendered to the commissioner and accepted by the commissioner in lieu of
2350		-	2226administrative action.
	2305	+	2226administrative action. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2306	+	- 73 -
2351	2307		2227 (5) (a) If the commissioner makes a finding under Subsection (5)(b) as part of an
2352	2308		2228adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act, the
2353	2309		2229commissioner may:
2354	2310		2230 (i) revoke:
2355	2311		2231 (A) a license; or
2356	2312		2232 (B) a license classification;
2357	2313		2233 (ii) suspend for a specified period of 12 months or less:
2358	2314		2234 (A) a license; or
2359	2315		2235 (B) a license classification;
2360	2316		2236 (iii) limit in whole or in part:
2361	2317		2237 (A) a license; or
2362	2318		2238 (B) a license classification;
2363	2319		2239 (iv) deny a license application;
2364	2320		2240 (v) assess a forfeiture under Subsection 31A-2-308(1)(b)(i) or (1)(c)(i); or
2365	2321		2241 (vi) take a combination of actions under Subsections (5)(a)(i) through (iv) and
2366		-	2242Subsection (5)(a)(v). H.B. 410
2367		-	Enrolled Copy
2368		-	- 84 -
	2322	+	2242Subsection (5)(a)(v).
2369	2323		2243 (b) The commissioner may take an action described in Subsection (5)(a) if the
2370	2324		2244commissioner finds that the licensee or license applicant:
2371	2325		2245 (i) is unqualified for a license or license classification under Section 31A-26-202,
2372	2326		224631A-26-203, 31A-26-204, or 31A-26-205;
2373	2327		2247 (ii) has violated:
2374	2328		2248 (A) an insurance statute;
2375	2329		2249 (B) a rule that is valid under Subsection 31A-2-201(3); or
2376	2330		2250 (C) an order that is valid under Subsection 31A-2-201(4);
2377	2331		2251 (iii) is insolvent, or the subject of receivership, conservatorship, rehabilitation, or other
2378	2332		2252delinquency proceedings in any state;
2379	2333		2253 (iv) fails to pay a final judgment rendered against the person in this state within 60
2380	2334		2254days after the judgment became final;
2381	2335		2255 (v) fails to meet the same good faith obligations in claims settlement that is required of
2382	2336		2256admitted insurers;
2383		-	2257 (vi) is affiliated with and under the same general management or interlocking
	2337	+	2257 (vi) is affiliated with and under the same general management or interlocking 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2338	+	- 74 -
2384	2339		2258directorate or ownership as another insurance adjuster that transacts business in this state
2385	2340		2259without a license;
2386	2341		2260 (vii) refuses:
2387	2342		2261 (A) to be examined; or
2388	2343		2262 (B) to produce its accounts, records, and files for examination;
2389	2344		2263 (viii) has an officer who refuses to:
2390	2345		2264 (A) give information with respect to the insurance adjuster's affairs; or
2391	2346		2265 (B) perform any other legal obligation as to an examination;
2392	2347		2266 (ix) provides information in the license application that is:
2393	2348		2267 (A) incorrect;
2394	2349		2268 (B) misleading;
2395		-	2269 (C) incomplete; or Enrolled Copy H.B. 410
2396		-	- 85 -
	2350	+	2269 (C) incomplete; or
2397	2351		2270 (D) materially untrue;
2398	2352		2271 (x) has violated an insurance law, valid rule, or valid order of another regulatory
2399	2353		2272agency in any jurisdiction;
2400	2354		2273 (xi) has obtained or attempted to obtain a license through misrepresentation or fraud;
2401	2355		2274 (xii) has improperly withheld, misappropriated, or converted money or properties
2402	2356		2275received in the course of doing insurance business;
2403	2357		2276 (xiii) has intentionally misrepresented the terms of an actual or proposed:
2404	2358		2277 (A) insurance contract; or
2405	2359		2278 (B) application for insurance;
2406	2360		2279 (xiv) has been convicted of, or has entered a plea in abeyance as defined in Section
2407	2361		228077-2a-1 to:
2408	2362		2281 (A) a felony; or
2409	2363		2282 (B) a misdemeanor involving fraud, misrepresentation, theft, or dishonesty;
2410	2364		2283 (xv) has admitted or been found to have committed an insurance unfair trade practice
2411	2365		2284or fraud;
2412	2366		2285 (xvi) in the conduct of business in this state or elsewhere has:
2413	2367		2286 (A) used fraudulent, coercive, or dishonest practices; or
2414	2368		2287 (B) demonstrated incompetence, untrustworthiness, or financial irresponsibility;
2415		-	2288 (xvii) has had an insurance license or other professional or occupational license or
	2369	+	2288 (xvii) has had an insurance license or other professional or occupational license or 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2370	+	- 75 -
2416	2371		2289registration, or equivalent, denied, suspended, revoked, or surrendered to resolve an
2417	2372		2290administrative action;
2418	2373		2291 (xviii) has forged another's name to:
2419	2374		2292 (A) an application for insurance; or
2420	2375		2293 (B) a document related to an insurance transaction;
2421	2376		2294 (xix) has improperly used notes or any other reference material to complete an
2422	2377		2295examination for an insurance license;
2423		-	2296 (xx) has knowingly accepted insurance business from an individual who is not H.B. 410
2424		-	Enrolled Copy
2425		-	- 86 -
	2378	+	2296 (xx) has knowingly accepted insurance business from an individual who is not
2426	2379		2297licensed;
2427	2380		2298 (xxi) has failed to comply with an administrative or court order imposing a child
2428	2381		2299support obligation;
2429	2382		2300 (xxii) has failed to:
2430	2383		2301 (A) pay state income tax; or
2431	2384		2302 (B) comply with an administrative or court order directing payment of state income
2432	2385		2303tax;
2433	2386		2304 (xxiii) has been convicted of a violation of the federal Violent Crime Control and Law
2434	2387		2305Enforcement Act of 1994, 18 U.S.C. Sec. 1033 and has not obtained written consent in
2435	2388		2306accordance with 18 U.S.C. Sec. 1033 to engage in the business of insurance or participate in
2436	2389		2307such business;
2437	2390		2308 (xxiv) has engaged in methods and practices in the conduct of business that endanger
2438	2391		2309the legitimate interests of customers and the public; or
2439	2392		2310 (xxv) has been convicted of any criminal felony involving dishonesty or breach of trust
2440	2393		2311and has not obtained written consent in accordance with 18 U.S.C. Sec. 1033 to engage in the
2441	2394		2312business of insurance or participate in such business.
2442	2395		2313 (c) For purposes of this section, if a license is held by an agency, both the agency itself
2443	2396		2314and any individual designated under the license are considered to be the holders of the license.
2444	2397		2315 (d) If an individual designated under the agency license commits an act or fails to
2445	2398		2316perform a duty that is a ground for suspending, revoking, or limiting the individual's license,
2446	2399		2317the commissioner may suspend, revoke, or limit the license of:
2447	2400		2318 (i) the individual;
2448		-	2319 (ii) the agency, if the agency:
	2401	+	2319 (ii) the agency, if the agency: 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2402	+	- 76 -
2449	2403		2320 (A) is reckless or negligent in its supervision of the individual; or
2450	2404		2321 (B) knowingly participated in the act or failure to act that is the ground for suspending,
2451	2405		2322revoking, or limiting the license; or
2452		-	2323 (iii) (A) the individual; and Enrolled Copy H.B. 410
2453		-	- 87 -
	2406	+	2323 (iii) (A) the individual; and
2454	2407		2324 (B) the agency if the agency meets the requirements of Subsection (5)(d)(ii).
2455	2408		2325 (6) A licensee under this chapter is subject to the penalties for conducting an insurance
2456	2409		2326business without a license if:
2457	2410		2327 (a) the licensee's license is:
2458	2411		2328 (i) revoked;
2459	2412		2329 (ii) suspended;
2460	2413		2330 (iii) limited;
2461	2414		2331 (iv) surrendered in lieu of administrative action;
2462	2415		2332 (v) lapsed; or
2463	2416		2333 (vi) voluntarily surrendered; and
2464	2417		2334 (b) the licensee:
2465	2418		2335 (i) continues to act as a licensee; or
2466	2419		2336 (ii) violates the terms of the license limitation.
2467	2420		2337 (7) A licensee under this chapter shall immediately report to the commissioner:
2468	2421		2338 (a) a revocation, suspension, or limitation of the person's license in any other state, the
2469	2422		2339District of Columbia, or a territory of the United States;
2470	2423		2340 (b) the imposition of a disciplinary sanction imposed on that person by any other state,
2471	2424		2341the District of Columbia, or a territory of the United States; or
2472	2425		2342 (c) a judgment or injunction entered against that person on the basis of conduct
2473	2426		2343involving:
2474	2427		2344 (i) fraud;
2475	2428		2345 (ii) deceit;
2476	2429		2346 (iii) misrepresentation; or
2477	2430		2347 (iv) a violation of an insurance law or rule.
2478	2431		2348 (8) (a) An order revoking a license under Subsection (5) or an agreement to surrender a
2479	2432		2349license in lieu of administrative action may specify a time not to exceed five years within
2480		-	2350which the former licensee may not apply for a new license. H.B. 410
2481		-	Enrolled Copy
2482		-	- 88 -
	2433	+	2350which the former licensee may not apply for a new license. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2434	+	- 77 -
2483	2435		2351 (b) If no time is specified in the order or agreement described in Subsection (8)(a), the
2484	2436		2352former licensee may not apply for a new license for five years without the express approval of
2485	2437		2353the commissioner.
2486	2438		2354 (9) The commissioner shall promptly withhold, suspend, restrict, or reinstate the use of
2487	2439		2355a license issued under this part if so ordered by a court.
2488	2440		2356 (10) The commissioner shall by rule prescribe the license renewal and reinstatement
2489	2441		2357procedures in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
2490	2442		2358 Section 17. Section 31A-30-118 is amended to read:
2491	2443		2359 31A-30-118. Patient Protection and Affordable Care Act -- State insurance
2492	2444		2360mandates -- Cost of additional benefits.
2493	2445		2361 (1) (a) The commissioner shall identify a new mandated benefit that is in excess of the
2494	2446		2362essential health benefits required by PPACA.
2495	2447		2363 (b) The state shall quantify the cost attributable to each additional mandated benefit
2496	2448		2364specified in Subsection (1)(a) based on a qualified health plan issuer's calculation of the cost
2497	2449		2365associated with the mandated benefit, which shall be:
2498	2450		2366 (i) calculated in accordance with generally accepted actuarial principles and
2499	2451		2367methodologies;
2500	2452		2368 (ii) conducted by a member of the American Academy of Actuaries; and
2501	2453		2369 (iii) reported to the commissioner and to the individual exchange operating in the state.
2502	2454		2370 (c) The commissioner may require a proponent of a new mandated benefit under
2503	2455		2371Subsection (1)(a) to provide the commissioner with a cost analysis conducted in accordance
2504	2456		2372with Subsection (1)(b). The commissioner may use the cost information provided under this
2505	2457		2373Subsection (1)(c) to establish estimates of the cost to the state under Subsection (2).
2506	2458		2374 (2) If the state is required to defray the cost of additional required benefits under the
2507	2459		2375provisions of 45 C.F.R. 155.170:
2508	2460		2376 (a) the state shall make the required payments:
2509		-	2377 (i) in accordance with Subsection (3); and Enrolled Copy H.B. 410
2510		-	- 89 -
	2461	+	2377 (i) in accordance with Subsection (3); and
2511	2462		2378 (ii) directly to the qualified health plan issuer in accordance with 45 C.F.R. 155.170;
2512	2463		2379 (b) an issuer of a qualified health plan that receives a payment under the provisions of
2513	2464		2380Subsection (1) and 45 C.F.R. 155.170 shall:
2514		-	2381 (i) reduce the premium charged to the individual on whose behalf the issuer will be
	2465	+	2381 (i) reduce the premium charged to the individual on whose behalf the issuer will be 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2466	+	- 78 -
2515	2467		2382paid under Subsection (1), in an amount equal to the amount of the payment under Subsection
2516	2468		2383(1); or
2517	2469		2384 (ii) notwithstanding Subsection 31A-23a-402.5(5), provide a premium rebate to an
2518	2470		2385individual on whose behalf the issuer received a payment under Subsection (1), in an amount
2519	2471		2386equal to the amount of the payment under Subsection (1); and
2520	2472		2387 (c) a premium rebate made under this section is not a prohibited inducement under
2521	2473		2388Section 31A-23a-402.5.
2522	2474		2389 (3) A payment required under 45 C.F.R. 155.170(c) shall:
2523	2475		2390 (a) unless otherwise required by PPACA, be based on a statewide average of the cost
2524	2476		2391of the additional benefit for all issuers who are entitled to payment under the provisions of 45
2525	2477		2392C.F.R. 155.170; and
2526	2478		2393 (b) be submitted to an issuer through a process established by the commissioner.
2527	2479		2394 (4) (a) As used in this Subsection (4), "account" means the State Mandated Insurer
2528	2480		2395Payments Restricted Account created in Subsection (4)(b).
2529	2481		2396 (b) There is created in the General Fund a restricted account known as the "State
2530	2482		2397Mandated Insurer Payments Restricted Account."
2531	2483		2398 (c) The account shall consist of:
2532	2484		2399 (i) money appropriated to the account by the Legislature; and
2533	2485		2400 (ii) interest earned on money in the account.
2534	2486		2401 (d) Subject to appropriations from the Legislature, the commissioner shall administer
2535	2487		2402the account for the sole benefit of a qualified health plan issuer who is eligible to receive
2536	2488		2403payments under this section.
2537		-	2404 (e) An appropriation from the account is nonlapsing. H.B. 410
2538		-	Enrolled Copy
2539		-	- 90 -
	2489	+	2404 (e) An appropriation from the account is nonlapsing.
2540	2490		2405 (5) The commissioner may adopt rules in accordance with Title 63G, Chapter 3, Utah
2541	2491		2406Administrative Rulemaking Act, to:
2542	2492		2407 (a) administer the provisions of this section and 45 C.F.R. 155.170; and
2543	2493		2408 (b) establish or implement a process for submitting a payment to an issuer under
2544	2494		2409Subsection (3)(b).
2545	2495		2410 Section 18. Section 31A-31-110 is amended to read:
2546	2496		2411 31A-31-110. Mandatory reporting of fraudulent insurance acts.
2547		-	2412 (1) (a) A person shall report a fraudulent insurance act to the department if:
	2497	+	2412 (1) (a) A person shall report a fraudulent insurance act to the department if: 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2498	+	- 79 -
2548	2499		2413 (i) the person has a good faith belief on the basis of a preponderance of the evidence
2549	2500		2414that a fraudulent insurance act is being, will be, or has been committed by a person other than
2550	2501		2415the person making the report; and
2551	2502		2416 (ii) the person is:
2552	2503		2417 (A) an insurer; or
2553	2504		2418 (B) in relation to the business of title insurance, an auditor that is employed by a title
2554	2505		2419insurer.
2555	2506		2420 (b) The report required by this Subsection (1) shall:
2556	2507		2421 (i) be in writing;
2557	2508		2422 (ii) be submitted through:
2558	2509		2423 (A) the National Insurance Crime Bureau fraud reporting system;
2559	2510		2424 (B) the NAIC's online fraud reporting system; or
2560	2511		2425 (C) email using an email address established by the department for the purpose of
2561	2512		2426submitting the report required by this Subsection (1);
2562	2513		2427 [(ii)] (iii) provide information in detail relating to:
2563	2514		2428 (A) the fraudulent insurance act; and
2564	2515		2429 (B) the perpetrator of the fraudulent insurance act; and
2565	2516		2430 [(iii)] (iv) (A) state whether the person required to report under Subsection (1)(a) also
2566		-	2431reported the fraudulent insurance act in writing to: Enrolled Copy H.B. 410
2567		-	- 91 -
	2517	+	2431reported the fraudulent insurance act in writing to:
2568	2518		2432 (I) the attorney general;
2569	2519		2433 (II) a state law enforcement agency;
2570	2520		2434 (III) a criminal investigative department or agency of the United States;
2571	2521		2435 (IV) a district attorney; or
2572	2522		2436 (V) the prosecuting attorney of a municipality or county; and
2573	2523		2437 (B) if the person reported the fraudulent insurance act as provided in Subsection
2574		-	2438[(1)(b)(iii)(A)] (1)(b)(iv)(A), state the agency to which the person reported the fraudulent
2575		-	2439insurance act.
2576		-	2440 (c) A person required to submit a written report under this Subsection (1) shall submit
2577		-	2441the written report to the department by no later than 90 days from the day on which the person
2578		-	2442required to report the fraudulent insurance act has a good faith belief on the basis of a
2579		-	2443preponderance of the evidence that the fraudulent insurance act is being, will be, or has been
2580		-	2444committed.
2581		-	2445 (2) An action brought under Section 31A-2-201, 31A-2-308, or 31A-31-109, for failure
2582		-	2446to comply with Subsection (1) shall be commenced within four years from the date on which a
2583		-	2447person described in Subsection (1):
2584		-	2448 (a) has a good faith belief on the basis of a preponderance of the evidence that a
2585		-	2449fraudulent insurance act is being, will be, or has been committed; and
2586		-	2450 (b) willfully fails to report the fraudulent insurance act.
2587		-	2451 (3) The department may by rule made in accordance with Title 63G, Chapter 3, Utah
2588		-	2452Administrative Rulemaking Act, provide a process by which a person described in Subsection
2589		-	2453(1)(a)(ii)(B) may comply with the requirements of Subsection (1) by reporting a fraudulent
2590		-	2454insurance act to the insurer with whom the person is employed, except that the rule shall
2591		-	2455provide that if the person reports the fraudulent insurance act to the insurer, the insurer is
2592		-	2456required to report the fraudulent insurance act to the department.
2593		-	2457 (4) A person described in Subsection (1)(a)(ii) who in good faith makes a report under
2594		-	2458this section, in accordance with Section 31A-31-105, is immune from civil action, civil H.B. 410
2595		-	Enrolled Copy
	2524	+	2438(1)(b)(iii)(A), state the agency to which the person reported the fraudulent insurance act.
	2525	+	2439 (c) A person required to submit a written report under this Subsection (1) shall submit
	2526	+	2440the written report to the department by no later than 90 days from the day on which the person
	2527	+	2441required to report the fraudulent insurance act has a good faith belief on the basis of a
	2528	+	2442preponderance of the evidence that the fraudulent insurance act is being, will be, or has been
	2529	+	2443committed. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2530	+	- 80 -
	2531	+	2444 (2) An action brought under Section 31A-2-201, 31A-2-308, or 31A-31-109, for failure
	2532	+	2445to comply with Subsection (1) shall be commenced within four years from the date on which a
	2533	+	2446person described in Subsection (1):
	2534	+	2447 (a) has a good faith belief on the basis of a preponderance of the evidence that a
	2535	+	2448fraudulent insurance act is being, will be, or has been committed; and
	2536	+	2449 (b) willfully fails to report the fraudulent insurance act.
	2537	+	2450 (3) The department may by rule made in accordance with Title 63G, Chapter 3, Utah
	2538	+	2451Administrative Rulemaking Act, provide a process by which a person described in Subsection
	2539	+	2452(1)(a)(ii)(B) may comply with the requirements of Subsection (1) by reporting a fraudulent
	2540	+	2453insurance act to the insurer with whom the person is employed, except that the rule shall
	2541	+	2454provide that if the person reports the fraudulent insurance act to the insurer, the insurer is
	2542	+	2455required to report the fraudulent insurance act to the department.
	2543	+	2456 (4) A person described in Subsection (1)(a)(ii) who in good faith makes a report under
	2544	+	2457this section, in accordance with Section 31A-31-105, is immune from civil action, civil
	2545	+	2458penalty, or damages for making that report.
	2546	+	2459 Section 19. Section 31A-35-504 is amended to read:
	2547	+	2460 31A-35-504. Failure to pay bail bond forfeiture -- Grounds for suspension and
	2548	+	2461revocation of bail bond agency license.
	2549	+	2462 (1) As used in this section:
	2550	+	2463 (a) "Agency" means a bail bond agency.
	2551	+	2464 (b) "Judgment" means a judgment of bail bond forfeiture issued under Section
	2552	+	246577-20-505.
	2553	+	2466 (2) (a) (i) An agency shall pay a judgment not later than 15 days following service of
	2554	+	2467notice upon the agency from a prosecutor of the entry of the judgment.
	2555	+	2468 (ii) An agency may pay a bail bond forfeiture to the court prior to judgment.
	2556	+	2469 (b) (i) A prosecutor who does not receive proof of or notice of payment of the
	2557	+	2470judgment within 15 days after the service of notice to the agency of a judgment shall notify the
	2558	+	2471commissioner of the failure to pay the judgment.
	2559	+	2472 (ii) The commissioner shall notify the agency, by the most expeditious means
	2560	+	2473available, of the nonpayment of the judgment.
	2561	+	2474 (iii) The agency shall satisfy the judgment within five business days after receiving 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2562	+	- 81 -
	2563	+	2475notice under Subsection (2)(b)(ii). [If the judgment is not satisfied at the end of the five days,
	2564	+	2476the commissioner may suspend the agency's license under Subsection (3).]
	2565	+	2477 (c) If notice of entry of judgment is served upon the agency by mail, three additional
	2566	+	2478days are added to the 15 days provided in Subsections (2)(a), (2)(b), and (2)(d).
	2567	+	2479 (d) A prosecutor may not proceed under Subsection (2)(b) if an agency, within 15 days
	2568	+	2480after service of notice of the entry of judgment is served:
	2569	+	2481 (i) files a motion to set aside the judgment or files an application for an extraordinary
	2570	+	2482writ; and
	2571	+	2483 (ii) provides proof that the agency has posted the judgment amount with the court in
	2572	+	2484the form of cash, a cashier's check, or certified funds.
	2573	+	2485 (e) As used in this section, the filing of the following tolls the time within which an
	2574	+	2486agency is required to pay a judgment if the motion or application is filed within 15 days after
	2575	+	2487the day on which service of notice of the entry of a judgment is served:
	2576	+	2488 (i) a motion to set aside a judgment; or
	2577	+	2489 (ii) an application for extraordinary writ.
	2578	+	2490 (3) The commissioner shall suspend the license of the agency not later than five days
	2579	+	2491following the agency's failure to satisfy the judgment as required under Subsection (2)(b).
	2580	+	2492 (4) If the prosecutor receives proof of or notice of payment of the judgment during the
	2581	+	2493suspension period under Subsection (3), the prosecutor shall immediately notify the
	2582	+	2494commissioner of the payment. The notice shall be in writing and by the most expeditious
	2583	+	2495means possible, including facsimile or other electronic means.
	2584	+	2496 (5) The commissioner shall lift a suspension under Subsection (3) within five days of
	2585	+	2497the day on which all of the following conditions are met:
	2586	+	2498 (a) the suspension has been in place for no fewer than 14 days;
	2587	+	2499 (b) the commissioner has received written notice of payment of the unpaid forfeiture
	2588	+	2500from the prosecutor; and
	2589	+	2501 (c) the commissioner has received:
	2590	+	2502 (i) no other notice of any unpaid forfeiture from a prosecutor; or
	2591	+	2503 (ii) if a notice of unpaid forfeiture is received, written notice from the prosecutor that
	2592	+	2504the unpaid forfeiture has been paid.
	2593	+	2505 (6) The commissioner shall commence an administrative proceeding and revoke the 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2594	+	- 82 -
	2595	+	2506license of an agency that fails to meet the conditions under Subsection (5) within 60 days
	2596	+	2507following the initial date of suspension.
	2597	+	2508 (7) This section does not restrict or otherwise affect the rights of a prosecutor to
	2598	+	2509commence collection proceedings under Subsection 77-20-505(5).
	2599	+	2510 Section 20. Section 31A-37-102 is amended to read:
	2600	+	2511 31A-37-102. Definitions.
	2601	+	2512 As used in this chapter:
	2602	+	2513 (1) (a) "Affiliated company" means a business entity that because of common
	2603	+	2514ownership, control, operation, or management is in the same corporate or limited liability
	2604	+	2515company system as:
	2605	+	2516 (i) a parent;
	2606	+	2517 (ii) an industrial insured; or
	2607	+	2518 (iii) a member organization.
	2608	+	2519 (b) "Affiliated company" does not include a business entity for which the
	2609	+	2520commissioner issues an order finding that the business entity is not an affiliated company.
	2610	+	2521 (2) "Alien captive insurance company" means an insurer:
	2611	+	2522 (a) formed to write insurance business for a parent or affiliate of the insurer; and
	2612	+	2523 (b) licensed pursuant to the laws of an alien or foreign jurisdiction that imposes
	2613	+	2524statutory or regulatory standards:
	2614	+	2525 (i) on a business entity transacting the business of insurance in the alien or foreign
	2615	+	2526jurisdiction; and
	2616	+	2527 (ii) in a form acceptable to the commissioner.
	2617	+	2528 (3) "Applicant captive insurance company" means an entity that has submitted an
	2618	+	2529application for a certificate of authority for a captive insurance company, unless the application
	2619	+	2530has been denied or withdrawn.
	2620	+	2531 (4) "Association" means a legal association of two or more persons that [has been in
	2621	+	2532continuous existence for at least one year if] meets the following requirements:
	2622	+	2533 (a) the persons are exposed to similar or related liability because of related, similar, or
	2623	+	2534common business trade, products, services, premises, or operations; and
	2624	+	2535 (b) [(a)] (i) the association or [its] the association's member organizations:
	2625	+	2536 [(i)] (A) own, control, or hold with power to vote all of the outstanding voting 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2626	+	- 83 -
	2627	+	2537securities of an association captive insurance company incorporated as a stock insurer; [or]
	2628	+	2538 [(ii)] (B) have complete voting control over an association captive insurance company
	2629	+	2539incorporated as a mutual insurer; or
	2630	+	2540 (C) have complete voting control over an association captive insurance company
	2631	+	2541formed as a limited liability company; or
	2632	+	2542 [(b)] (ii) the association's member organizations collectively constitute all of the
	2633	+	2543subscribers of an association captive insurance company formed as a reciprocal insurer[; or].
	2634	+	2544 [(c) the association or the association's member organizations have complete voting
	2635	+	2545control over an association captive insurance company formed as a limited liability company.]
	2636	+	2546 (5) "Association captive insurance company" means a business entity that insures risks
	2637	+	2547of:
	2638	+	2548 (a) a member organization of the association;
	2639	+	2549 (b) an affiliate of a member organization of the association; and
	2640	+	2550 (c) the association.
	2641	+	2551 (6) "Branch business" means an insurance business transacted by a branch captive
	2642	+	2552insurance company in this state.
	2643	+	2553 (7) "Branch captive insurance company" means an alien captive insurance company
	2644	+	2554that has a certificate of authority from the commissioner to transact the business of insurance in
	2645	+	2555this state through a captive insurance company that is domiciled outside of this state.
	2646	+	2556 (8) "Branch operation" means a business operation of a branch captive insurance
	2647	+	2557company in this state.
	2648	+	2558 (9) (a) "Captive insurance company" means the same as that term is defined in Section
	2649	+	255931A-1-301.
	2650	+	2560 (b) "Captive insurance company" includes any of the following formed or holding a
	2651	+	2561certificate of authority under this chapter:
	2652	+	2562 (i) a branch captive insurance company;
	2653	+	2563 (ii) a pure captive insurance company;
	2654	+	2564 (iii) an association captive insurance company;
	2655	+	2565 (iv) a sponsored captive insurance company;
	2656	+	2566 (v) an industrial insured captive insurance company, including an industrial insured
	2657	+	2567captive insurance company formed as a risk retention group captive in this state pursuant to the 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2658	+	- 84 -
	2659	+	2568provisions of the Federal Liability Risk Retention Act of 1986;
	2660	+	2569 (vi) a special purpose captive insurance company; or
	2661	+	2570 (vii) a special purpose financial captive insurance company.
	2662	+	2571 (10) "Commissioner" means Utah's Insurance Commissioner or the commissioner's
	2663	+	2572designee.
	2664	+	2573 (11) "Common ownership and control" means that two or more captive insurance
	2665	+	2574companies are owned or controlled by the same person or group of persons as follows:
	2666	+	2575 (a) in the case of a captive insurance company that is a stock corporation, the direct or
	2667	+	2576indirect ownership of 80% or more of the outstanding voting stock of the stock corporation;
	2668	+	2577 (b) in the case of a captive insurance company that is a mutual corporation, the direct
	2669	+	2578or indirect ownership of 80% or more of the surplus and the voting power of the mutual
	2670	+	2579corporation;
	2671	+	2580 (c) in the case of a captive insurance company that is a limited liability company, the
	2672	+	2581direct or indirect ownership by the same member or members of 80% or more of the
	2673	+	2582membership interests in the limited liability company; or
	2674	+	2583 (d) in the case of a sponsored captive insurance company, a protected cell is a separate
	2675	+	2584captive insurance company owned and controlled by the protected cell's participant, only if:
	2676	+	2585 (i) the participant is the only participant with respect to the protected cell; and
	2677	+	2586 (ii) the participant is the sponsor or is affiliated with the sponsor of the sponsored
	2678	+	2587captive insurance company through common ownership and control.
	2679	+	2588 (12) "Consolidated debt to total capital ratio" means the ratio of Subsection (12)(a) to
	2680	+	2589(b).
	2681	+	2590 (a) This Subsection (12)(a) is an amount equal to the sum of all debts and hybrid
	2682	+	2591capital instruments including:
	2683	+	2592 (i) all borrowings from depository institutions;
	2684	+	2593 (ii) all senior debt;
	2685	+	2594 (iii) all subordinated debts;
	2686	+	2595 (iv) all trust preferred shares; and
	2687	+	2596 (v) all other hybrid capital instruments that are not included in the determination of
	2688	+	2597consolidated GAAP net worth issued and outstanding.
	2689	+	2598 (b) This Subsection (12)(b) is an amount equal to the sum of: 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2690	+	- 85 -
	2691	+	2599 (i) total capital consisting of all debts and hybrid capital instruments as described in
	2692	+	2600Subsection (12)(a); and
	2693	+	2601 (ii) shareholders' equity determined in accordance with generally accepted accounting
	2694	+	2602principles for reporting to the United States Securities and Exchange Commission.
	2695	+	2603 (13) "Consolidated GAAP net worth" means the consolidated shareholders' or
	2696	+	2604members' equity determined in accordance with generally accepted accounting principles for
	2697	+	2605reporting to the United States Securities and Exchange Commission.
	2698	+	2606 (14) "Controlled unaffiliated business" means a business entity:
	2699	+	2607 (a) (i) in the case of a pure captive insurance company, that is not in the corporate or
	2700	+	2608limited liability company system of a parent or the parent's affiliate; or
	2701	+	2609 (ii) in the case of an industrial insured captive insurance company, that is not in the
	2702	+	2610corporate or limited liability company system of an industrial insured or an affiliated company
	2703	+	2611of the industrial insured;
	2704	+	2612 (b) (i) in the case of a pure captive insurance company, that has a contractual
	2705	+	2613relationship with a parent or affiliate; or
	2706	+	2614 (ii) in the case of an industrial insured captive insurance company, that has a
	2707	+	2615contractual relationship with an industrial insured or an affiliated company of the industrial
	2708	+	2616insured; and
	2709	+	2617 (c) whose risks that are or will be insured by a pure captive insurance company, an
	2710	+	2618industrial insured captive insurance company, or both, are managed in accordance with
	2711	+	2619Subsection 31A-37-106(1)(j) by:
	2712	+	2620 (i) (A) a pure captive insurance company; or
	2713	+	2621 (B) an industrial insured captive insurance company; or
	2714	+	2622 (ii) a parent or affiliate of:
	2715	+	2623 (A) a pure captive insurance company; or
	2716	+	2624 (B) an industrial insured captive insurance company.
	2717	+	2625 (15) "Criminal act" means an act for which a person receives a verdict or finding of
	2718	+	2626guilt after a criminal trial or a plea of guilty or nolo contendere to a criminal charge.
	2719	+	2627 (16) "Establisher" means a person who establishes a business entity or a trust.
	2720	+	2628 (17) "Governing body" means the persons who hold the ultimate authority to direct and
	2721	+	2629manage the affairs of an entity. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2722	+	- 86 -
	2723	+	2630 (18) "Industrial insured" means an insured:
	2724	+	2631 (a) that produces insurance:
	2725	+	2632 (i) by the services of a full-time employee acting as a risk manager or insurance
	2726	+	2633manager; or
	2727	+	2634 (ii) using the services of a regularly and continuously qualified insurance consultant;
	2728	+	2635 (b) whose aggregate annual premiums for insurance on all risks total at least $25,000;
	2729	+	2636and
	2730	+	2637 (c) that has at least 25 full-time employees.
	2731	+	2638 (19) "Industrial insured captive insurance company" means a business entity that:
	2732	+	2639 (a) insures risks of the industrial insureds that comprise the industrial insured group;
	2733	+	2640and
	2734	+	2641 (b) may insure the risks of:
	2735	+	2642 (i) an affiliated company of an industrial insured; or
	2736	+	2643 (ii) a controlled unaffiliated business of:
	2737	+	2644 (A) an industrial insured; or
	2738	+	2645 (B) an affiliated company of an industrial insured.
	2739	+	2646 (20) "Industrial insured group" means:
	2740	+	2647 (a) a group of industrial insureds that collectively:
	2741	+	2648 (i) own, control, or hold with power to vote all of the outstanding voting securities of
	2742	+	2649an industrial insured captive insurance company incorporated or organized as a limited liability
	2743	+	2650company as a stock insurer; or
	2744	+	2651 (ii) have complete voting control over an industrial insured captive insurance company
	2745	+	2652incorporated or organized as a limited liability company as a mutual insurer;
	2746	+	2653 (b) a group that is:
	2747	+	2654 (i) created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. Sec. 3901
	2748	+	2655et seq., as amended, as a corporation or other limited liability association; and
	2749	+	2656 (ii) taxable under this title as a:
	2750	+	2657 (A) stock corporation; or
	2751	+	2658 (B) mutual insurer; or
	2752	+	2659 (c) a group that has complete voting control over an industrial captive insurance
	2753	+	2660company formed as a limited liability company. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2754	+	- 87 -
	2755	+	2661 (21) "Member organization" means a person that belongs to an association.
	2756	+	2662 (22) "Parent" means a person that directly or indirectly owns, controls, or holds with
	2757	+	2663power to vote more than 50% of the outstanding securities of an organization.
	2758	+	2664 (23) "Participant" means an entity that is insured by a sponsored captive insurance
	2759	+	2665company:
	2760	+	2666 (a) if the losses of the participant are limited through a participant contract to the assets
	2761	+	2667of a protected cell; and
	2762	+	2668 (b) (i) the entity is permitted to be a participant under Section 31A-37-403; or
	2763	+	2669 (ii) the entity is an affiliate of an entity permitted to be a participant under Section
	2764	+	267031A-37-403.
	2765	+	2671 (24) "Participant contract" means a contract by which a sponsored captive insurance
	2766	+	2672company:
	2767	+	2673 (a) insures the risks of a participant; and
	2768	+	2674 (b) limits the losses of the participant to the assets of a protected cell.
	2769	+	2675 (25) "Protected cell" means a separate account established and maintained by a
	2770	+	2676sponsored captive insurance company for one participant.
	2771	+	2677 (26) "Pure captive insurance company" means a business entity that insures risks of a
	2772	+	2678parent or affiliate of the business entity.
	2773	+	2679 (27) "Special purpose financial captive insurance company" means the same as that
	2774	+	2680term is defined in Section 31A-37a-102.
	2775	+	2681 (28) "Sponsor" means an entity that:
	2776	+	2682 (a) meets the requirements of Section 31A-37-402; and
	2777	+	2683 (b) is approved by the commissioner to:
	2778	+	2684 (i) provide all or part of the capital and surplus required by applicable law in an amount
	2779	+	2685of not less than $350,000, which amount the commissioner may increase by order if the
	2780	+	2686commissioner considers it necessary; and
	2781	+	2687 (ii) organize and operate a sponsored captive insurance company.
	2782	+	2688 (29) "Sponsored captive insurance company" means a captive insurance company:
	2783	+	2689 (a) in which the minimum capital and surplus required by applicable law is provided by
	2784	+	2690one or more sponsors;
	2785	+	2691 (b) that is formed or holding a certificate of authority under this chapter; 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2786	+	- 88 -
	2787	+	2692 (c) that insures the risks of a separate participant through the contract; and
	2788	+	2693 (d) that segregates each participant's liability through one or more protected cells.
	2789	+	2694 (30) "Treasury rates" means the United States Treasury strip asked yield as published
	2790	+	2695in the Wall Street Journal as of a balance sheet date.
	2791	+	2696 Section 21. Section 31A-37-202 is amended to read:
	2792	+	2697 31A-37-202. Permissive areas of insurance.
	2793	+	2698 (1) Except as provided in Subsections (2) and (3), a captive insurance company may
	2794	+	2699not directly insure a risk other than the risk of the captive insurance company's parent or
	2795	+	2700affiliated company.
	2796	+	2701 (2) In addition to the risks described in Subsection (1), an association captive insurance
	2797	+	2702company may insure the risk of:
	2798	+	2703 (a) a member organization of the association captive insurance company's association;
	2799	+	2704or
	2800	+	2705 (b) an affiliate of a member organization of the association captive insurance
	2801	+	2706company's association.
	2802	+	2707 (3) The following may insure a risk of a controlled unaffiliated business:
	2803	+	2708 (a) an industrial insured captive insurance company;
	2804	+	2709 (b) a protected cell;
	2805	+	2710 (c) a pure captive insurance company; or
	2806	+	2711 (d) a sponsored captive insurance company.
	2807	+	2712 (4) To the extent allowed by a captive insurance company's organizational charter, a
	2808	+	2713captive insurance company may provide any type of insurance described in this title, except:
	2809	+	2714 (a) workers' compensation insurance;
	2810	+	2715 (b) personal motor vehicle insurance;
	2811	+	2716 (c) homeowners' insurance; and
	2812	+	2717 (d) any component of the types of insurance described in Subsections (4)(a) through
	2813	+	2718(c).
	2814	+	2719 (5) A captive insurance company may not provide coverage for:
	2815	+	2720 (a) a wager or gaming risk;
	2816	+	2721 (b) loss of an election; or
	2817	+	2722 (c) the penal consequences of a crime. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2818	+	- 89 -
	2819	+	2723 (6) Unless the punitive damages award arises out of a criminal act of an insured, a
	2820	+	2724captive insurance company may provide coverage for punitive damages awarded, including
	2821	+	2725through adjudication or compromise, against the captive insurance company's:
	2822	+	2726 (a) parent; or
	2823	+	2727 (b) affiliated company[; or].
	2824	+	2728 [(c) controlled unaffiliated business.]
	2825	+	2729 (7) Notwithstanding Subsection (4), if approved by the commissioner, a captive
	2826	+	2730insurance company may insure as a reimbursement a limited layer or deductible of workers'
	2827	+	2731compensation coverage.
	2828	+	2732 Section 22. Section 31A-37-204 is amended to read:
	2829	+	2733 31A-37-204. Paid-in capital -- Other capital.
	2830	+	2734 (1) (a) The commissioner may not issue a certificate of authority to a company
	2831	+	2735described in Subsection (1)(c) unless the company possesses and thereafter maintains
	2832	+	2736unimpaired paid-in capital and unimpaired paid-in surplus of:
	2833	+	2737 (i) in the case of a pure captive insurance company[,]:
	2834	+	2738 (A) except as provided in Subsection (1)(a)(i)(B), not less than $250,000; or
	2835	+	2739 (B) if the pure captive insurance company is not acting as a pool that facilitates risk
	2836	+	2740distribution for other captive insurers, an amount that is the greater of:
	2837	+	2741 (I) not less than 20% of the company's total aggregate risk; or
	2838	+	2742 (II) $50,000;
	2839	+	2743 (ii) in the case of an association captive insurance company, not less than $750,000;
	2840	+	2744 (iii) in the case of an industrial insured captive insurance company incorporated as a
	2841	+	2745stock insurer, not less than $700,000;
	2842	+	2746 (iv) in the case of a sponsored captive insurance company, not less than $500,000, of
	2843	+	2747which a minimum of $200,000 is provided by the sponsor; or
	2844	+	2748 (v) in the case of a special purpose captive insurance company, an amount determined
	2845	+	2749by the commissioner after giving due consideration to the company's business plan, feasibility
	2846	+	2750study, and pro-formas, including the nature of the risks to be insured.
	2847	+	2751 (b) The paid-in capital and surplus required under this Subsection (1) may be in the
	2848	+	2752form of:
	2849	+	2753 (i) (A) cash; or 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
	2850	+	- 90 -
	2851	+	2754 (B) cash equivalent;
	2852	+	2755 (ii) an irrevocable letter of credit:
	2853	+	2756 (A) issued by:
	2854	+	2757 (I) a bank chartered by this state; [or]
	2855	+	2758 (II) a member bank of the Federal Reserve System; [and] or
	2856	+	2759 (III) a member bank of the Federal Deposit Insurance Corporation;
	2857	+	2760 (B) approved by the commissioner;
	2858	+	2761 (iii) marketable securities as determined by Subsection (5); or
	2859	+	2762 (iv) some other thing of value approved by the commissioner, for a period not to
	2860	+	2763exceed 45 days, to facilitate the formation of a captive insurance company in this state pursuant
	2861	+	2764to an approved plan of liquidation and reorganization of another captive insurance company or
	2862	+	2765alien captive insurance company in another jurisdiction.
	2863	+	2766 (c) This Subsection (1) applies to:
	2864	+	2767 (i) a pure captive insurance company;
	2865	+	2768 (ii) a sponsored captive insurance company;
	2866	+	2769 (iii) a special purpose captive insurance company;
	2867	+	2770 (iv) an association captive insurance company; or
	2868	+	2771 (v) an industrial insured captive insurance company.
	2869	+	2772 (2) (a) The commissioner may, under Section 31A-37-106, prescribe additional capital
	2870	+	2773based on the type, volume, and nature of insurance business transacted.
	2871	+	2774 (b) The capital prescribed by the commissioner under this Subsection (2) may be in the
	2872	+	2775form of:
	2873	+	2776 (i) cash;
	2874	+	2777 (ii) an irrevocable letter of credit issued by:
	2875	+	2778 (A) a bank chartered by this state; or
	2876	+	2779 (B) a member bank of the Federal Reserve System; or
	2877	+	2780 (iii) marketable securities as determined by Subsection (5).
	2878	+	2781 (3) (a) Except as provided in Subsection (3)(c), a branch captive insurance company, as
	2879	+	2782security for the payment of liabilities attributable to branch operations, shall, through its branch
	2880	+	2783operations, establish and maintain a trust fund:
	2881	+	2784 (i) funded by an irrevocable letter of credit or other acceptable asset; and 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
	2882	+	- 91 -
	2883	+	2785 (ii) in the United States for the benefit of:
	2884	+	2786 (A) United States policyholders; and
	2885	+	2787 (B) United States ceding insurers under:
	2886	+	2788 (I) insurance policies issued; or
	2887	+	2789 (II) reinsurance contracts issued or assumed.
	2888	+	2790 (b) The amount of the security required under this Subsection (3) shall be no less than:
	2889	+	2791 (i) the capital and surplus required by this chapter; and
	2890	+	2792 (ii) the reserves on the insurance policies or reinsurance contracts, including:
	2891	+	2793 (A) reserves for losses;
	2892	+	2794 (B) allocated loss adjustment expenses;
	2893	+	2795 (C) incurred but not reported losses; and
	2894	+	2796 (D) unearned premiums with regard to business written through branch operations.
	2895	+	2797 (c) Notwithstanding the other provisions of this Subsection (3):
	2896	+	2798 (i) the commissioner may permit a branch captive insurance company that is required
	2897	+	2799to post security for loss reserves on branch business by its reinsurer to reduce the funds in the
	2898	+	2800trust account required by this section by the same amount as the security posted if the security
	2899	+	2801remains posted with the reinsurer; and
	2900	+	2802 (ii) a branch captive insurance company that is the result of the licensure of an alien
	2901	+	2803captive insurance company that is not formed in an alien jurisdiction is not subject to the
	2902	+	2804requirements of this Subsection (3).
	2903	+	2805 (4) (a) A captive insurance company may not pay the following without the prior
	2904	+	2806approval of the commissioner:
	2905	+	2807 (i) a dividend out of capital or surplus in excess of the limits under Section
	2906	+	280816-10a-640; or
	2907	+	2809 (ii) a distribution with respect to capital or surplus in excess of the limits under Section
	2908	+	281016-10a-640.
	2909	+	2811 (b) The commissioner shall condition approval of an ongoing plan for the payment of
	2910	+	2812dividends or other distributions on the retention, at the time of each payment, of capital or
	2911	+	2813surplus in excess of:
	2912	+	2814 (i) amounts specified by the commissioner under Section 31A-37-106; or
	2913	+	2815 (ii) determined in accordance with formulas approved by the commissioner under 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
2596	2914		- 92 -
2597		-	2459penalty, or damages for making that report.
2598		-	2460 Section 19. Section 31A-35-504 is amended to read:
2599		-	2461 31A-35-504. Failure to pay bail bond forfeiture -- Grounds for suspension and
2600		-	2462revocation of bail bond agency license.
2601		-	2463 (1) As used in this section:
2602		-	2464 (a) "Agency" means a bail bond agency.
2603		-	2465 (b) "Judgment" means a judgment of bail bond forfeiture issued under Section
2604		-	246677-20-505.
2605		-	2467 (2) (a) (i) An agency shall pay a judgment not later than 15 days following service of
2606		-	2468notice upon the agency from a prosecutor of the entry of the judgment.
2607		-	2469 (ii) An agency may pay a bail bond forfeiture to the court prior to judgment.
2608		-	2470 (b) (i) A prosecutor who does not receive proof of or notice of payment of the
2609		-	2471judgment within 15 days after the service of notice to the agency of a judgment shall notify the
2610		-	2472commissioner of the failure to pay the judgment.
2611		-	2473 (ii) The commissioner shall notify the agency, by the most expeditious means
2612		-	2474available, of the nonpayment of the judgment.
2613		-	2475 (iii) The agency shall satisfy the judgment within five business days after receiving
2614		-	2476notice under Subsection (2)(b)(ii). [If the judgment is not satisfied at the end of the five days,
2615		-	2477the commissioner may suspend the agency's license under Subsection (3).]
2616		-	2478 (c) If notice of entry of judgment is served upon the agency by mail, three additional
2617		-	2479days are added to the 15 days provided in Subsections (2)(a), (2)(b), and (2)(d).
2618		-	2480 (d) A prosecutor may not proceed under Subsection (2)(b) if an agency, within 15 days
2619		-	2481after service of notice of the entry of judgment is served:
2620		-	2482 (i) files a motion to set aside the judgment or files an application for an extraordinary
2621		-	2483writ; and
2622		-	2484 (ii) provides proof that the agency has posted the judgment amount with the court in
2623		-	2485the form of cash, a cashier's check, or certified funds. Enrolled Copy H.B. 410
	2915	+	2816Section 31A-37-106.
	2916	+	2817 (5) For purposes of this section, marketable securities means:
	2917	+	2818 (a) a bond or other evidence of indebtedness of a governmental unit in the United
	2918	+	2819States or Canada or any instrumentality of the United States or Canada; or
	2919	+	2820 (b) securities:
	2920	+	2821 (i) traded on one or more of the following exchanges in the United States:
	2921	+	2822 (A) New York;
	2922	+	2823 (B) American; or
	2923	+	2824 (C) NASDAQ;
	2924	+	2825 (ii) when no particular security, or a substantially related security, applied toward the
	2925	+	2826required minimum capital and surplus requirement of Subsection (1) represents more than 50%
	2926	+	2827of the minimum capital and surplus requirement; and
	2927	+	2828 (iii) when no group of up to four particular securities, consolidating substantially
	2928	+	2829related securities, applied toward the required minimum capital and surplus requirement of
	2929	+	2830Subsection (1) represents more than 90% of the minimum capital and surplus requirement.
	2930	+	2831 (6) Notwithstanding Subsection (5), to protect the solvency and liquidity of a captive
	2931	+	2832insurance company, the commissioner may reject the application of specific assets or amounts
	2932	+	2833of specific assets to satisfying the requirement of Subsection (1).
	2933	+	2834 Section 23. Section 49-20-401 is amended to read:
	2934	+	2835 49-20-401. Program -- Powers and duties.
	2935	+	2836 (1) The program shall:
	2936	+	2837 (a) act as a self-insurer of employee benefit plans and administer those plans;
	2937	+	2838 (b) enter into contracts with private insurers or carriers to underwrite employee benefit
	2938	+	2839plans as considered appropriate by the program;
	2939	+	2840 (c) indemnify employee benefit plans or purchase commercial reinsurance as
	2940	+	2841considered appropriate by the program;
	2941	+	2842 (d) provide descriptions of all employee benefit plans under this chapter in cooperation
	2942	+	2843with covered employers;
	2943	+	2844 (e) process claims for all employee benefit plans under this chapter or enter into
	2944	+	2845contracts, after competitive bids are taken, with other benefit administrators to provide for the
	2945	+	2846administration of the claims process; 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
2624	2946		- 93 -
2625		-	2486 (e) As used in this section, the filing of the following tolls the time within which an
2626		-	2487agency is required to pay a judgment if the motion or application is filed within 15 days after
2627		-	2488the day on which service of notice of the entry of a judgment is served:
2628		-	2489 (i) a motion to set aside a judgment; or
2629		-	2490 (ii) an application for extraordinary writ.
2630		-	2491 (3) The commissioner shall suspend the license of the agency not later than five days
2631		-	2492following the agency's failure to satisfy the judgment as required under Subsection (2)(b).
2632		-	2493 (4) If the prosecutor receives proof of or notice of payment of the judgment during the
2633		-	2494suspension period under Subsection (3), the prosecutor shall immediately notify the
2634		-	2495commissioner of the payment. The notice shall be in writing and by the most expeditious
2635		-	2496means possible, including facsimile or other electronic means.
2636		-	2497 (5) The commissioner shall lift a suspension under Subsection (3) within five days of
2637		-	2498the day on which all of the following conditions are met:
2638		-	2499 (a) the suspension has been in place for no fewer than 14 days;
2639		-	2500 (b) the commissioner has received written notice of payment of the unpaid forfeiture
2640		-	2501from the prosecutor; and
2641		-	2502 (c) the commissioner has received:
2642		-	2503 (i) no other notice of any unpaid forfeiture from a prosecutor; or
2643		-	2504 (ii) if a notice of unpaid forfeiture is received, written notice from the prosecutor that
2644		-	2505the unpaid forfeiture has been paid.
2645		-	2506 (6) The commissioner shall commence an administrative proceeding and revoke the
2646		-	2507license of an agency that fails to meet the conditions under Subsection (5) within 60 days
2647		-	2508following the initial date of suspension.
2648		-	2509 (7) This section does not restrict or otherwise affect the rights of a prosecutor to
2649		-	2510commence collection proceedings under Subsection 77-20-505(5).
2650		-	2511 Section 20. Section 31A-37-102 is amended to read:
2651		-	2512 31A-37-102. Definitions. H.B. 410
2652		-	Enrolled Copy
	2947	+	2847 (f) obtain an annual actuarial review of all health and dental benefit plans and a
	2948	+	2848periodic review of all other employee benefit plans;
	2949	+	2849 (g) consult with the covered employers to evaluate employee benefit plans and develop
	2950	+	2850recommendations for benefit changes;
	2951	+	2851 (h) annually submit a budget and audited financial statements to the governor and
	2952	+	2852Legislature that includes total projected benefit costs and administrative costs;
	2953	+	2853 (i) maintain reserves sufficient to liquidate the unrevealed claims liability and other
	2954	+	2854liabilities of the employee benefit plans as certified by the program's consulting actuary;
	2955	+	2855 (j) submit, in advance, the program's recommended benefit and rate adjustments for
	2956	+	2856state employees, which may include actuarially substantiated member premium differentials
	2957	+	2857between networks to:
	2958	+	2858 (i) the Legislature; and
	2959	+	2859 (ii) the director of the state Division of Human Resource Management;
	2960	+	2860 (k) determine benefits and rates, upon approval of the board, for multi-employer risk
	2961	+	2861pools, retiree coverage, and conversion coverage;
	2962	+	2862 (l) determine benefits and rates based on the total estimated costs and the employee
	2963	+	2863premium share established by the Legislature, upon approval of the board, for state employees;
	2964	+	2864 (m) administer benefits and rates, upon ratification of the board, for single-employer
	2965	+	2865risk pools;
	2966	+	2866 (n) request proposals for one or more out-of-state provider networks and a dental
	2967	+	2867health plan administered by a third-party carrier at least once every three years for the purposes
	2968	+	2868of:
	2969	+	2869 (i) stimulating competition for the benefit of covered individuals;
	2970	+	2870 (ii) establishing better geographical coverage of medical care services; and
	2971	+	2871 (iii) providing coverage for both active and retired covered individuals;
	2972	+	2872 (o) for a proposal that meets the criteria specified in a request for proposals and is
	2973	+	2873accepted by the program:
	2974	+	2874 (i) offer the proposal to active and retired state-covered individuals; and
	2975	+	2875 (ii) at the option of the covered employer, offer the proposal to active and retired
	2976	+	2876covered individuals of other covered employers;
	2977	+	2877 (p) perform the same functions established in Subsections (1)(a), (b), (e), and (h) for 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
2653	2978		- 94 -
2654		-	2513 As used in this chapter:
2655		-	2514 (1) (a) "Affiliated company" means a business entity that because of common
2656		-	2515ownership, control, operation, or management is in the same corporate or limited liability
2657		-	2516company system as:
2658		-	2517 (i) a parent;
2659		-	2518 (ii) an industrial insured; or
2660		-	2519 (iii) a member organization.
2661		-	2520 (b) "Affiliated company" does not include a business entity for which the
2662		-	2521commissioner issues an order finding that the business entity is not an affiliated company.
2663		-	2522 (2) "Alien captive insurance company" means an insurer:
2664		-	2523 (a) formed to write insurance business for a parent or affiliate of the insurer; and
2665		-	2524 (b) licensed pursuant to the laws of an alien or foreign jurisdiction that imposes
2666		-	2525statutory or regulatory standards:
2667		-	2526 (i) on a business entity transacting the business of insurance in the alien or foreign
2668		-	2527jurisdiction; and
2669		-	2528 (ii) in a form acceptable to the commissioner.
2670		-	2529 (3) "Applicant captive insurance company" means an entity that has submitted an
2671		-	2530application for a certificate of authority for a captive insurance company, unless the application
2672		-	2531has been denied or withdrawn.
2673		-	2532 (4) "Association" means a legal association of two or more persons that [has been in
2674		-	2533continuous existence for at least one year if] meets the following requirements:
2675		-	2534 (a) the persons are exposed to similar or related liability because of related, similar, or
2676		-	2535common business trade, products, services, premises, or operations; and
2677		-	2536 (b) [(a)] (i) the association or [its] the association's member organizations:
2678		-	2537 [(i)] (A) own, control, or hold with power to vote all of the outstanding voting
2679		-	2538securities of an association captive insurance company incorporated as a stock insurer; [or]
2680		-	2539 [(ii)] (B) have complete voting control over an association captive insurance company Enrolled Copy H.B. 410
	2979	+	2878the Department of Health and Human Services if the program provides program benefits to
	2980	+	2879children enrolled in the Utah Children's Health Insurance Program created in Title 26, Chapter
	2981	+	288040, Utah Children's Health Insurance Act;
	2982	+	2881 (q) establish rules and procedures governing the admission of political subdivisions or
	2983	+	2882educational institutions and their employees to the program;
	2984	+	2883 (r) (i) contract directly with medical providers to provide services for covered
	2985	+	2884individuals at commercially competitive rates; and
	2986	+	2885 (ii) (A) discontinue the preferred network, which offers in-network access to all
	2987	+	2886in-state hospitals, for the state risk pool created in Subsection 49-20-202(1)(a) for plan years
	2988	+	2887starting on or after July 1, 2022; and
	2989	+	2888 (B) for an employee in the state risk pool who fails to elect one of the remaining
	2990	+	2889networks before July 1, 2022, enroll the employee and the employee's dependents into the
	2991	+	2890network that best reflects the utilization pattern of that employee and the employee's
	2992	+	2891dependents;
	2993	+	2892 (s) (i) require state employees and the state employees' dependents to participate in the
	2994	+	2893electronic exchange of clinical health records in accordance with Section 26-1-37 unless the
	2995	+	2894enrollee opts out of participation; and
	2996	+	2895 (ii) prior to enrolling the state employee, each time the state employee logs onto the
	2997	+	2896program's website, and each time the enrollee receives written enrollment information from the
	2998	+	2897program, provide notice to the enrollee of the enrollee's participation in the electronic exchange
	2999	+	2898of clinical health records and the option to opt out of participation at any time;
	3000	+	2899 (t) at the request of a procurement unit, as that term is defined in Section 63G-6a-103,
	3001	+	2900that administers benefits to program recipients who are not covered by Title 26, Utah Health
	3002	+	2901Code, provide services for:
	3003	+	2902 (i) drugs;
	3004	+	2903 (ii) medical devices; or
	3005	+	2904 (iii) other types of medical care; and
	3006	+	2905 (u) take additional actions necessary or appropriate to carry out the purposes of this
	3007	+	2906chapter.
	3008	+	2907 (2) (a) Funds budgeted and expended shall accrue from rates paid by the covered
	3009	+	2908employers and covered individuals. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
2681	3010		- 95 -
2682		-	2540incorporated as a mutual insurer; or
2683		-	2541 (C) have complete voting control over an association captive insurance company
2684		-	2542formed as a limited liability company; or
2685		-	2543 [(b)] (ii) the association's member organizations collectively constitute all of the
2686		-	2544subscribers of an association captive insurance company formed as a reciprocal insurer[; or].
2687		-	2545 [(c) the association or the association's member organizations have complete voting
2688		-	2546control over an association captive insurance company formed as a limited liability company.]
2689		-	2547 (5) "Association captive insurance company" means a business entity that insures risks
2690		-	2548of:
2691		-	2549 (a) a member organization of the association;
2692		-	2550 (b) an affiliate of a member organization of the association; and
2693		-	2551 (c) the association.
2694		-	2552 (6) "Branch business" means an insurance business transacted by a branch captive
2695		-	2553insurance company in this state.
2696		-	2554 (7) "Branch captive insurance company" means an alien captive insurance company
2697		-	2555that has a certificate of authority from the commissioner to transact the business of insurance in
2698		-	2556this state through a captive insurance company that is domiciled outside of this state.
2699		-	2557 (8) "Branch operation" means a business operation of a branch captive insurance
2700		-	2558company in this state.
2701		-	2559 (9) (a) "Captive insurance company" means the same as that term is defined in Section
2702		-	256031A-1-301.
2703		-	2561 (b) "Captive insurance company" includes any of the following formed or holding a
2704		-	2562certificate of authority under this chapter:
2705		-	2563 (i) a branch captive insurance company;
2706		-	2564 (ii) a pure captive insurance company;
2707		-	2565 (iii) an association captive insurance company;
2708		-	2566 (iv) a sponsored captive insurance company; H.B. 410
2709		-	Enrolled Copy
	3011	+	2909 (b) The board shall approve administrative costs and report the administrative costs to
	3012	+	2910the governor and the Legislature.
	3013	+	2911 (3) The Division of Human Resource Management shall include the benefit and rate
	3014	+	2912adjustments described in Subsection (1)(j) in the total compensation plan recommended to the
	3015	+	2913governor required under Subsection 63A-17-307(5)(a).
	3016	+	2914 (4) The program may establish a partnership with a public entity in a different state to
	3017	+	2915purchase or share services related to the administration of medical benefits if:
	3018	+	2916 (a) the program receives approval for the partnership from the board; and
	3019	+	2917 (b) the partnership:
	3020	+	2918 (i) creates cost savings for Utah;
	3021	+	2919 (ii) does not commingle state funds with funds of the public entity in the other state;
	3022	+	2920and
	3023	+	2921 (iii) does not pose a greater actuarial risk to Utah than the program has already
	3024	+	2922assumed.
	3025	+	2923 Section 24. Section 63J-1-602.1 is amended to read:
	3026	+	2924 63J-1-602.1. List of nonlapsing appropriations from accounts and funds.
	3027	+	2925 Appropriations made from the following accounts or funds are nonlapsing:
	3028	+	2926 (1) The Utah Intracurricular Student Organization Support for Agricultural Education
	3029	+	2927and Leadership Restricted Account created in Section 4-42-102.
	3030	+	2928 (2) The Native American Repatriation Restricted Account created in Section 9-9-407.
	3031	+	2929 (3) The Martin Luther King, Jr. Civil Rights Support Restricted Account created in
	3032	+	2930Section 9-18-102.
	3033	+	2931 (4) The National Professional Men's Soccer Team Support of Building Communities
	3034	+	2932Restricted Account created in Section 9-19-102.
	3035	+	2933 (5) Funds collected for directing and administering the C-PACE district created in
	3036	+	2934Section 11-42a-106.
	3037	+	2935 (6) Money received by the Utah Inland Port Authority, as provided in Section
	3038	+	293611-58-105.
	3039	+	2937 (7) The "Latino Community Support Restricted Account" created in Section 13-1-16.
	3040	+	2938 (8) The Clean Air Support Restricted Account created in Section 19-1-109.
	3041	+	2939 (9) The Division of Air Quality Oil, Gas, and Mining Restricted Account created in 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
2710	3042		- 96 -
2711		-	2567 (v) an industrial insured captive insurance company, including an industrial insured
2712		-	2568captive insurance company formed as a risk retention group captive in this state pursuant to the
2713		-	2569provisions of the Federal Liability Risk Retention Act of 1986;
2714		-	2570 (vi) a special purpose captive insurance company; or
2715		-	2571 (vii) a special purpose financial captive insurance company.
2716		-	2572 (10) "Commissioner" means Utah's Insurance Commissioner or the commissioner's
2717		-	2573designee.
2718		-	2574 (11) "Common ownership and control" means that two or more captive insurance
2719		-	2575companies are owned or controlled by the same person or group of persons as follows:
2720		-	2576 (a) in the case of a captive insurance company that is a stock corporation, the direct or
2721		-	2577indirect ownership of 80% or more of the outstanding voting stock of the stock corporation;
2722		-	2578 (b) in the case of a captive insurance company that is a mutual corporation, the direct
2723		-	2579or indirect ownership of 80% or more of the surplus and the voting power of the mutual
2724		-	2580corporation;
2725		-	2581 (c) in the case of a captive insurance company that is a limited liability company, the
2726		-	2582direct or indirect ownership by the same member or members of 80% or more of the
2727		-	2583membership interests in the limited liability company; or
2728		-	2584 (d) in the case of a sponsored captive insurance company, a protected cell is a separate
2729		-	2585captive insurance company owned and controlled by the protected cell's participant, only if:
2730		-	2586 (i) the participant is the only participant with respect to the protected cell; and
2731		-	2587 (ii) the participant is the sponsor or is affiliated with the sponsor of the sponsored
2732		-	2588captive insurance company through common ownership and control.
2733		-	2589 (12) "Consolidated debt to total capital ratio" means the ratio of Subsection (12)(a) to
2734		-	2590(b).
2735		-	2591 (a) This Subsection (12)(a) is an amount equal to the sum of all debts and hybrid
2736		-	2592capital instruments including:
2737		-	2593 (i) all borrowings from depository institutions; Enrolled Copy H.B. 410
	3043	+	2940Section 19-2a-106.
	3044	+	2941 (10) The Division of Water Quality Oil, Gas, and Mining Restricted Account created in
	3045	+	2942Section 19-5-126.
	3046	+	2943 (11) The "Support for State-Owned Shooting Ranges Restricted Account" created in
	3047	+	2944Section 23-14-13.5.
	3048	+	2945 (12) Award money under the State Asset Forfeiture Grant Program, as provided under
	3049	+	2946Section 24-4-117.
	3050	+	2947 (13) Funds collected from the program fund for local health department expenses
	3051	+	2948incurred in responding to a local health emergency under Section 26-1-38.
	3052	+	2949 (14) The Children with Cancer Support Restricted Account created in Section
	3053	+	295026-21a-304.
	3054	+	2951 (15) State funds for matching federal funds in the Children's Health Insurance Program
	3055	+	2952as provided in Section 26-40-108.
	3056	+	2953 (16) The Children with Heart Disease Support Restricted Account created in Section
	3057	+	295426-58-102.
	3058	+	2955 (17) The Technology Development Restricted Account created in Section 31A-3-104.
	3059	+	2956 (18) The Criminal Background Check Restricted Account created in Section
	3060	+	295731A-3-105.
	3061	+	2958 (19) The Captive Insurance Restricted Account created in Section 31A-3-304, except
	3062	+	2959to the extent that Section 31A-3-304 makes the money received under that section free revenue.
	3063	+	2960 (20) The Title Licensee Enforcement Restricted Account created in Section
	3064	+	296131A-23a-415.
	3065	+	2962 (21) The Health Insurance Actuarial Review Restricted Account created in Section
	3066	+	296331A-30-115.
	3067	+	2964 (22) The State Mandated Insurer Payments Restricted Account created in Section
	3068	+	296531A-30-118.
	3069	+	2966 [(22)] (23) The Insurance Fraud Investigation Restricted Account created in Section
	3070	+	296731A-31-108.
	3071	+	2968 [(23)] (24) The Underage Drinking Prevention Media and Education Campaign
	3072	+	2969Restricted Account created in Section 32B-2-306.
	3073	+	2970 [(24)] (25) The Drinking While Pregnant Prevention Media and Education Campaign 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
2738	3074		- 97 -
2739		-	2594 (ii) all senior debt;
2740		-	2595 (iii) all subordinated debts;
2741		-	2596 (iv) all trust preferred shares; and
2742		-	2597 (v) all other hybrid capital instruments that are not included in the determination of
2743		-	2598consolidated GAAP net worth issued and outstanding.
2744		-	2599 (b) This Subsection (12)(b) is an amount equal to the sum of:
2745		-	2600 (i) total capital consisting of all debts and hybrid capital instruments as described in
2746		-	2601Subsection (12)(a); and
2747		-	2602 (ii) shareholders' equity determined in accordance with generally accepted accounting
2748		-	2603principles for reporting to the United States Securities and Exchange Commission.
2749		-	2604 (13) "Consolidated GAAP net worth" means the consolidated shareholders' or
2750		-	2605members' equity determined in accordance with generally accepted accounting principles for
2751		-	2606reporting to the United States Securities and Exchange Commission.
2752		-	2607 (14) "Controlled unaffiliated business" means a business entity:
2753		-	2608 (a) (i) in the case of a pure captive insurance company, that is not in the corporate or
2754		-	2609limited liability company system of a parent or the parent's affiliate; or
2755		-	2610 (ii) in the case of an industrial insured captive insurance company, that is not in the
2756		-	2611corporate or limited liability company system of an industrial insured or an affiliated company
2757		-	2612of the industrial insured;
2758		-	2613 (b) (i) in the case of a pure captive insurance company, that has a contractual
2759		-	2614relationship with a parent or affiliate; or
2760		-	2615 (ii) in the case of an industrial insured captive insurance company, that has a
2761		-	2616contractual relationship with an industrial insured or an affiliated company of the industrial
2762		-	2617insured; and
2763		-	2618 (c) whose risks that are or will be insured by a pure captive insurance company, an
2764		-	2619industrial insured captive insurance company, or both, are managed in accordance with
2765		-	2620Subsection 31A-37-106(1)(j) by: H.B. 410
2766		-	Enrolled Copy
	3075	+	2971Restricted Account created in Section 32B-2-308.
	3076	+	2972 [(25)] (26) The School Readiness Restricted Account created in Section 35A-15-203.
	3077	+	2973 [(26)] (27) Money received by the Utah State Office of Rehabilitation for the sale of
	3078	+	2974certain products or services, as provided in Section 35A-13-202.
	3079	+	2975 [(27)] (28) The Oil and Gas Administrative Penalties Account created in Section
	3080	+	297640-6-11.
	3081	+	2977 [(28)] (29) The Oil and Gas Conservation Account created in Section 40-6-14.5.
	3082	+	2978 [(29)] (30) The Division of Oil, Gas, and Mining Restricted account created in Section
	3083	+	297940-6-23.
	3084	+	2980 [(30)] (31) The Electronic Payment Fee Restricted Account created by Section
	3085	+	298141-1a-121 to the Motor Vehicle Division.
	3086	+	2982 [(31)] (32) The Motor Vehicle Enforcement Division Temporary Permit Restricted
	3087	+	2983Account created by Section 41-3-110 to the State Tax Commission.
	3088	+	2984 [(32)] (33) The Utah Law Enforcement Memorial Support Restricted Account created
	3089	+	2985in Section 53-1-120.
	3090	+	2986 [(33)] (34) The State Disaster Recovery Restricted Account to the Division of
	3091	+	2987Emergency Management, as provided in Section 53-2a-603.
	3092	+	2988 [(34)] (35) The Post Disaster Recovery and Mitigation Restricted Account created in
	3093	+	2989Section 53-2a-1302.
	3094	+	2990 [(35)] (36) The Department of Public Safety Restricted Account to the Department of
	3095	+	2991Public Safety, as provided in Section 53-3-106.
	3096	+	2992 [(36)] (37) The Utah Highway Patrol Aero Bureau Restricted Account created in
	3097	+	2993Section 53-8-303.
	3098	+	2994 [(37)] (38) The DNA Specimen Restricted Account created in Section 53-10-407.
	3099	+	2995 [(38)] (39) The Canine Body Armor Restricted Account created in Section 53-16-201.
	3100	+	2996 [(39)] (40) The Technical Colleges Capital Projects Fund created in Section
	3101	+	299753B-2a-118.
	3102	+	2998 [(40)] (41) The Higher Education Capital Projects Fund created in Section
	3103	+	299953B-22-202.
	3104	+	3000 [(41)] (42) A certain portion of money collected for administrative costs under the
	3105	+	3001School Institutional Trust Lands Management Act, as provided under Section 53C-3-202. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
2767	3106		- 98 -
2768		-	2621 (i) (A) a pure captive insurance company; or
2769		-	2622 (B) an industrial insured captive insurance company; or
2770		-	2623 (ii) a parent or affiliate of:
2771		-	2624 (A) a pure captive insurance company; or
2772		-	2625 (B) an industrial insured captive insurance company.
2773		-	2626 (15) "Criminal act" means an act for which a person receives a verdict or finding of
2774		-	2627guilt after a criminal trial or a plea of guilty or nolo contendere to a criminal charge.
2775		-	2628 (16) "Establisher" means a person who establishes a business entity or a trust.
2776		-	2629 (17) "Governing body" means the persons who hold the ultimate authority to direct and
2777		-	2630manage the affairs of an entity.
2778		-	2631 (18) "Industrial insured" means an insured:
2779		-	2632 (a) that produces insurance:
2780		-	2633 (i) by the services of a full-time employee acting as a risk manager or insurance
2781		-	2634manager; or
2782		-	2635 (ii) using the services of a regularly and continuously qualified insurance consultant;
2783		-	2636 (b) whose aggregate annual premiums for insurance on all risks total at least $25,000;
2784		-	2637and
2785		-	2638 (c) that has at least 25 full-time employees.
2786		-	2639 (19) "Industrial insured captive insurance company" means a business entity that:
2787		-	2640 (a) insures risks of the industrial insureds that comprise the industrial insured group;
2788		-	2641and
2789		-	2642 (b) may insure the risks of:
2790		-	2643 (i) an affiliated company of an industrial insured; or
2791		-	2644 (ii) a controlled unaffiliated business of:
2792		-	2645 (A) an industrial insured; or
2793		-	2646 (B) an affiliated company of an industrial insured.
2794		-	2647 (20) "Industrial insured group" means: Enrolled Copy H.B. 410
	3107	+	3002 [(42)] (43) The Public Utility Regulatory Restricted Account created in Section
	3108	+	300354-5-1.5, subject to Subsection 54-5-1.5(4)(d).
	3109	+	3004 [(43)] (44) Funds collected from a surcharge fee to provide certain licensees with
	3110	+	3005access to an electronic reference library, as provided in Section 58-3a-105.
	3111	+	3006 [(44)] (45) Certain fines collected by the Division of Professional Licensing for
	3112	+	3007violation of unlawful or unprofessional conduct that are used for education and enforcement
	3113	+	3008purposes, as provided in Section 58-17b-505.
	3114	+	3009 [(45)] (46) Funds collected from a surcharge fee to provide certain licensees with
	3115	+	3010access to an electronic reference library, as provided in Section 58-22-104.
	3116	+	3011 [(46)] (47) Funds collected from a surcharge fee to provide certain licensees with
	3117	+	3012access to an electronic reference library, as provided in Section 58-55-106.
	3118	+	3013 [(47)] (48) Funds collected from a surcharge fee to provide certain licensees with
	3119	+	3014access to an electronic reference library, as provided in Section 58-56-3.5.
	3120	+	3015 [(48)] (49) Certain fines collected by the Division of Professional Licensing for use in
	3121	+	3016education and enforcement of the Security Personnel Licensing Act, as provided in Section
	3122	+	301758-63-103.
	3123	+	3018 [(49)] (50) The Relative Value Study Restricted Account created in Section 59-9-105.
	3124	+	3019 [(50)] (51) The Cigarette Tax Restricted Account created in Section 59-14-204.
	3125	+	3020 [(51)] (52) Funds paid to the Division of Real Estate for the cost of a criminal
	3126	+	3021background check for a mortgage loan license, as provided in Section 61-2c-202.
	3127	+	3022 [(52)] (53) Funds paid to the Division of Real Estate for the cost of a criminal
	3128	+	3023background check for principal broker, associate broker, and sales agent licenses, as provided
	3129	+	3024in Section 61-2f-204.
	3130	+	3025 [(53)] (54) Certain funds donated to the Department of Health and Human Services, as
	3131	+	3026provided in Section 26B-1-202.
	3132	+	3027 [(54)] (55) The National Professional Men's Basketball Team Support of Women and
	3133	+	3028Children Issues Restricted Account created in Section 26B-1-302.
	3134	+	3029 [(55)] (56) Certain funds donated to the Division of Child and Family Services, as
	3135	+	3030provided in Section 80-2-404.
	3136	+	3031 [(56)] (57) The Choose Life Adoption Support Restricted Account created in Section
	3137	+	303280-2-502. 02-23-23 1:24 PM 2nd Sub. (Gray) H.B. 410
2795	3138		- 99 -
2796		-	2648 (a) a group of industrial insureds that collectively:
2797		-	2649 (i) own, control, or hold with power to vote all of the outstanding voting securities of
2798		-	2650an industrial insured captive insurance company incorporated or organized as a limited liability
2799		-	2651company as a stock insurer; or
2800		-	2652 (ii) have complete voting control over an industrial insured captive insurance company
2801		-	2653incorporated or organized as a limited liability company as a mutual insurer;
2802		-	2654 (b) a group that is:
2803		-	2655 (i) created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. Sec. 3901
2804		-	2656et seq., as amended, as a corporation or other limited liability association; and
2805		-	2657 (ii) taxable under this title as a:
2806		-	2658 (A) stock corporation; or
2807		-	2659 (B) mutual insurer; or
2808		-	2660 (c) a group that has complete voting control over an industrial captive insurance
2809		-	2661company formed as a limited liability company.
2810		-	2662 (21) "Member organization" means a person that belongs to an association.
2811		-	2663 (22) "Parent" means a person that directly or indirectly owns, controls, or holds with
2812		-	2664power to vote more than 50% of the outstanding securities of an organization.
2813		-	2665 (23) "Participant" means an entity that is insured by a sponsored captive insurance
2814		-	2666company:
2815		-	2667 (a) if the losses of the participant are limited through a participant contract to the assets
2816		-	2668of a protected cell; and
2817		-	2669 (b) (i) the entity is permitted to be a participant under Section 31A-37-403; or
2818		-	2670 (ii) the entity is an affiliate of an entity permitted to be a participant under Section
2819		-	267131A-37-403.
2820		-	2672 (24) "Participant contract" means a contract by which a sponsored captive insurance
2821		-	2673company:
2822		-	2674 (a) insures the risks of a participant; and H.B. 410
2823		-	Enrolled Copy
	3139	+	3033 [(57)] (58) Funds collected by the Office of Administrative Rules for publishing, as
	3140	+	3034provided in Section 63G-3-402.
	3141	+	3035 [(58)] (59) The Immigration Act Restricted Account created in Section 63G-12-103.
	3142	+	3036 [(59)] (60) Money received by the military installation development authority, as
	3143	+	3037provided in Section 63H-1-504.
	3144	+	3038 [(60)] (61) The Computer Aided Dispatch Restricted Account created in Section
	3145	+	303963H-7a-303.
	3146	+	3040 [(61)] (62) The Unified Statewide 911 Emergency Service Account created in Section
	3147	+	304163H-7a-304.
	3148	+	3042 [(62)] (63) The Utah Statewide Radio System Restricted Account created in Section
	3149	+	304363H-7a-403.
	3150	+	3044 [(63)] (64) The Utah Capital Investment Restricted Account created in Section
	3151	+	304563N-6-204.
	3152	+	3046 [(64)] (65) The Motion Picture Incentive Account created in Section 63N-8-103.
	3153	+	3047 [(65)] (66) Certain money payable for expenses of the Pete Suazo Utah Athletic
	3154	+	3048Commission, as provided under Section 63N-10-301.
	3155	+	3049 [(66)] (67) Funds collected by the housing of state probationary inmates or state parole
	3156	+	3050inmates, as provided in Subsection 64-13e-104(2).
	3157	+	3051 [(67)] (68) Certain forestry and fire control funds utilized by the Division of Forestry,
	3158	+	3052Fire, and State Lands, as provided in Section 65A-8-103.
	3159	+	3053 [(68)] (69) The Amusement Ride Safety Restricted Account, as provided in Section
	3160	+	305472-16-204.
	3161	+	3055 [(69)] (70) Certain funds received by the Office of the State Engineer for well drilling
	3162	+	3056fines or bonds, as provided in Section 73-3-25.
	3163	+	3057 [(70)] (71) The Water Resources Conservation and Development Fund, as provided in
	3164	+	3058Section 73-23-2.
	3165	+	3059 [(71)] (72) Funds donated or paid to a juvenile court by private sources, as provided in
	3166	+	3060Subsection 78A-6-203(1)(c).
	3167	+	3061 [(72)] (73) Fees for certificate of admission created under Section 78A-9-102.
	3168	+	3062 [(73)] (74) Funds collected for adoption document access as provided in Sections
	3169	+	306378B-6-141, 78B-6-144, and 78B-6-144.5. 2nd Sub. (Gray) H.B. 410 02-23-23 1:24 PM
2824	3170		- 100 -
2825		-	2675 (b) limits the losses of the participant to the assets of a protected cell.
2826		-	2676 (25) "Protected cell" means a separate account established and maintained by a
2827		-	2677sponsored captive insurance company for one participant.
2828		-	2678 (26) "Pure captive insurance company" means a business entity that insures risks of a
2829		-	2679parent or affiliate of the business entity.
2830		-	2680 (27) "Special purpose financial captive insurance company" means the same as that
2831		-	2681term is defined in Section 31A-37a-102.
2832		-	2682 (28) "Sponsor" means an entity that:
2833		-	2683 (a) meets the requirements of Section 31A-37-402; and
2834		-	2684 (b) is approved by the commissioner to:
2835		-	2685 (i) provide all or part of the capital and surplus required by applicable law in an amount
2836		-	2686of not less than $350,000, which amount the commissioner may increase by order if the
2837		-	2687commissioner considers it necessary; and
2838		-	2688 (ii) organize and operate a sponsored captive insurance company.
2839		-	2689 (29) "Sponsored captive insurance company" means a captive insurance company:
2840		-	2690 (a) in which the minimum capital and surplus required by applicable law is provided by
2841		-	2691one or more sponsors;
2842		-	2692 (b) that is formed or holding a certificate of authority under this chapter;
2843		-	2693 (c) that insures the risks of a separate participant through the contract; and
2844		-	2694 (d) that segregates each participant's liability through one or more protected cells.
2845		-	2695 (30) "Treasury rates" means the United States Treasury strip asked yield as published
2846		-	2696in the Wall Street Journal as of a balance sheet date.
2847		-	2697 Section 21. Section 31A-37-202 is amended to read:
2848		-	2698 31A-37-202. Permissive areas of insurance.
2849		-	2699 (1) Except as provided in Subsections (2) and (3), a captive insurance company may
2850		-	2700not directly insure a risk other than the risk of the captive insurance company's parent or
2851		-	2701affiliated company. Enrolled Copy H.B. 410
2852		-	- 101 -
2853		-	2702 (2) In addition to the risks described in Subsection (1), an association captive insurance
2854		-	2703company may insure the risk of:
2855		-	2704 (a) a member organization of the association captive insurance company's association;
2856		-	2705or
2857		-	2706 (b) an affiliate of a member organization of the association captive insurance
2858		-	2707company's association.
2859		-	2708 (3) The following may insure a risk of a controlled unaffiliated business:
2860		-	2709 (a) an industrial insured captive insurance company;
2861		-	2710 (b) a protected cell;
2862		-	2711 (c) a pure captive insurance company; or
2863		-	2712 (d) a sponsored captive insurance company.
2864		-	2713 (4) To the extent allowed by a captive insurance company's organizational charter, a
2865		-	2714captive insurance company may provide any type of insurance described in this title, except:
2866		-	2715 (a) workers' compensation insurance;
2867		-	2716 (b) personal motor vehicle insurance;
2868		-	2717 (c) homeowners' insurance; and
2869		-	2718 (d) any component of the types of insurance described in Subsections (4)(a) through
2870		-	2719(c).
2871		-	2720 (5) A captive insurance company may not provide coverage for:
2872		-	2721 (a) a wager or gaming risk;
2873		-	2722 (b) loss of an election; or
2874		-	2723 (c) the penal consequences of a crime.
2875		-	2724 (6) Unless the punitive damages award arises out of a criminal act of an insured, a
2876		-	2725captive insurance company may provide coverage for punitive damages awarded, including
2877		-	2726through adjudication or compromise, against the captive insurance company's:
2878		-	2727 (a) parent; or
2879		-	2728 (b) affiliated company[; or]. H.B. 410
2880		-	Enrolled Copy
2881		-	- 102 -
2882		-	2729 [(c) controlled unaffiliated business.]
2883		-	2730 (7) Notwithstanding Subsection (4), if approved by the commissioner, a captive
2884		-	2731insurance company may insure as a reimbursement a limited layer or deductible of workers'
2885		-	2732compensation coverage.
2886		-	2733 Section 22. Section 31A-37-204 is amended to read:
2887		-	2734 31A-37-204. Paid-in capital -- Other capital.
2888		-	2735 (1) (a) The commissioner may not issue a certificate of authority to a company
2889		-	2736described in Subsection (1)(c) unless the company possesses and thereafter maintains
2890		-	2737unimpaired paid-in capital and unimpaired paid-in surplus of:
2891		-	2738 (i) in the case of a pure captive insurance company[,]:
2892		-	2739 (A) except as provided in Subsection (1)(a)(i)(B), not less than $250,000; or
2893		-	2740 (B) if the pure captive insurance company is not acting as a pool that facilitates risk
2894		-	2741distribution for other captive insurers, an amount that is the greater of:
2895		-	2742 (I) not less than 20% of the company's total aggregate risk; or
2896		-	2743 (II) $50,000;
2897		-	2744 (ii) in the case of an association captive insurance company, not less than $750,000;
2898		-	2745 (iii) in the case of an industrial insured captive insurance company incorporated as a
2899		-	2746stock insurer, not less than $700,000;
2900		-	2747 (iv) in the case of a sponsored captive insurance company, not less than $500,000, of
2901		-	2748which a minimum of $200,000 is provided by the sponsor; or
2902		-	2749 (v) in the case of a special purpose captive insurance company, an amount determined
2903		-	2750by the commissioner after giving due consideration to the company's business plan, feasibility
2904		-	2751study, and pro-formas, including the nature of the risks to be insured.
2905		-	2752 (b) The paid-in capital and surplus required under this Subsection (1) may be in the
2906		-	2753form of:
2907		-	2754 (i) (A) cash; or
2908		-	2755 (B) cash equivalent; Enrolled Copy H.B. 410
2909		-	- 103 -
2910		-	2756 (ii) an irrevocable letter of credit:
2911		-	2757 (A) issued by:
2912		-	2758 (I) a bank chartered by this state; [or]
2913		-	2759 (II) a member bank of the Federal Reserve System; [and] or
2914		-	2760 (III) a member bank of the Federal Deposit Insurance Corporation;
2915		-	2761 (B) approved by the commissioner;
2916		-	2762 (iii) marketable securities as determined by Subsection (5); or
2917		-	2763 (iv) some other thing of value approved by the commissioner, for a period not to
2918		-	2764exceed 45 days, to facilitate the formation of a captive insurance company in this state pursuant
2919		-	2765to an approved plan of liquidation and reorganization of another captive insurance company or
2920		-	2766alien captive insurance company in another jurisdiction.
2921		-	2767 (c) This Subsection (1) applies to:
2922		-	2768 (i) a pure captive insurance company;
2923		-	2769 (ii) a sponsored captive insurance company;
2924		-	2770 (iii) a special purpose captive insurance company;
2925		-	2771 (iv) an association captive insurance company; or
2926		-	2772 (v) an industrial insured captive insurance company.
2927		-	2773 (2) (a) The commissioner may, under Section 31A-37-106, prescribe additional capital
2928		-	2774based on the type, volume, and nature of insurance business transacted.
2929		-	2775 (b) The capital prescribed by the commissioner under this Subsection (2) may be in the
2930		-	2776form of:
2931		-	2777 (i) cash;
2932		-	2778 (ii) an irrevocable letter of credit issued by:
2933		-	2779 (A) a bank chartered by this state; or
2934		-	2780 (B) a member bank of the Federal Reserve System; or
2935		-	2781 (iii) marketable securities as determined by Subsection (5).
2936		-	2782 (3) (a) Except as provided in Subsection (3)(c), a branch captive insurance company, as H.B. 410
2937		-	Enrolled Copy
2938		-	- 104 -
2939		-	2783security for the payment of liabilities attributable to branch operations, shall, through its branch
2940		-	2784operations, establish and maintain a trust fund:
2941		-	2785 (i) funded by an irrevocable letter of credit or other acceptable asset; and
2942		-	2786 (ii) in the United States for the benefit of:
2943		-	2787 (A) United States policyholders; and
2944		-	2788 (B) United States ceding insurers under:
2945		-	2789 (I) insurance policies issued; or
2946		-	2790 (II) reinsurance contracts issued or assumed.
2947		-	2791 (b) The amount of the security required under this Subsection (3) shall be no less than:
2948		-	2792 (i) the capital and surplus required by this chapter; and
2949		-	2793 (ii) the reserves on the insurance policies or reinsurance contracts, including:
2950		-	2794 (A) reserves for losses;
2951		-	2795 (B) allocated loss adjustment expenses;
2952		-	2796 (C) incurred but not reported losses; and
2953		-	2797 (D) unearned premiums with regard to business written through branch operations.
2954		-	2798 (c) Notwithstanding the other provisions of this Subsection (3):
2955		-	2799 (i) the commissioner may permit a branch captive insurance company that is required
2956		-	2800to post security for loss reserves on branch business by its reinsurer to reduce the funds in the
2957		-	2801trust account required by this section by the same amount as the security posted if the security
2958		-	2802remains posted with the reinsurer; and
2959		-	2803 (ii) a branch captive insurance company that is the result of the licensure of an alien
2960		-	2804captive insurance company that is not formed in an alien jurisdiction is not subject to the
2961		-	2805requirements of this Subsection (3).
2962		-	2806 (4) (a) A captive insurance company may not pay the following without the prior
2963		-	2807approval of the commissioner:
2964		-	2808 (i) a dividend out of capital or surplus in excess of the limits under Section
2965		-	280916-10a-640; or Enrolled Copy H.B. 410
2966		-	- 105 -
2967		-	2810 (ii) a distribution with respect to capital or surplus in excess of the limits under Section
2968		-	281116-10a-640.
2969		-	2812 (b) The commissioner shall condition approval of an ongoing plan for the payment of
2970		-	2813dividends or other distributions on the retention, at the time of each payment, of capital or
2971		-	2814surplus in excess of:
2972		-	2815 (i) amounts specified by the commissioner under Section 31A-37-106; or
2973		-	2816 (ii) determined in accordance with formulas approved by the commissioner under
2974		-	2817Section 31A-37-106.
2975		-	2818 (5) For purposes of this section, marketable securities means:
2976		-	2819 (a) a bond or other evidence of indebtedness of a governmental unit in the United
2977		-	2820States or Canada or any instrumentality of the United States or Canada; or
2978		-	2821 (b) securities:
2979		-	2822 (i) traded on one or more of the following exchanges in the United States:
2980		-	2823 (A) New York;
2981		-	2824 (B) American; or
2982		-	2825 (C) NASDAQ;
2983		-	2826 (ii) when no particular security, or a substantially related security, applied toward the
2984		-	2827required minimum capital and surplus requirement of Subsection (1) represents more than 50%
2985		-	2828of the minimum capital and surplus requirement; and
2986		-	2829 (iii) when no group of up to four particular securities, consolidating substantially
2987		-	2830related securities, applied toward the required minimum capital and surplus requirement of
2988		-	2831Subsection (1) represents more than 90% of the minimum capital and surplus requirement.
2989		-	2832 (6) Notwithstanding Subsection (5), to protect the solvency and liquidity of a captive
2990		-	2833insurance company, the commissioner may reject the application of specific assets or amounts
2991		-	2834of specific assets to satisfying the requirement of Subsection (1).
2992		-	2835 Section 23. Section 49-20-401 is amended to read:
2993		-	2836 49-20-401. Program -- Powers and duties. H.B. 410
2994		-	Enrolled Copy
2995		-	- 106 -
2996		-	2837 (1) The program shall:
2997		-	2838 (a) act as a self-insurer of employee benefit plans and administer those plans;
2998		-	2839 (b) enter into contracts with private insurers or carriers to underwrite employee benefit
2999		-	2840plans as considered appropriate by the program;
3000		-	2841 (c) indemnify employee benefit plans or purchase commercial reinsurance as
3001		-	2842considered appropriate by the program;
3002		-	2843 (d) provide descriptions of all employee benefit plans under this chapter in cooperation
3003		-	2844with covered employers;
3004		-	2845 (e) process claims for all employee benefit plans under this chapter or enter into
3005		-	2846contracts, after competitive bids are taken, with other benefit administrators to provide for the
3006		-	2847administration of the claims process;
3007		-	2848 (f) obtain an annual actuarial review of all health and dental benefit plans and a
3008		-	2849periodic review of all other employee benefit plans;
3009		-	2850 (g) consult with the covered employers to evaluate employee benefit plans and develop
3010		-	2851recommendations for benefit changes;
3011		-	2852 (h) annually submit a budget and audited financial statements to the governor and
3012		-	2853Legislature that includes total projected benefit costs and administrative costs;
3013		-	2854 (i) maintain reserves sufficient to liquidate the unrevealed claims liability and other
3014		-	2855liabilities of the employee benefit plans as certified by the program's consulting actuary;
3015		-	2856 (j) submit, in advance, the program's recommended benefit and rate adjustments for
3016		-	2857state employees, which may include actuarially substantiated member premium differentials
3017		-	2858between networks to:
3018		-	2859 (i) the Legislature; and
3019		-	2860 (ii) the director of the state Division of Human Resource Management;
3020		-	2861 (k) determine benefits and rates, upon approval of the board, for multi-employer risk
3021		-	2862pools, retiree coverage, and conversion coverage;
3022		-	2863 (l) determine benefits and rates based on the total estimated costs and the employee Enrolled Copy H.B. 410
3023		-	- 107 -
3024		-	2864premium share established by the Legislature, upon approval of the board, for state employees;
3025		-	2865 (m) administer benefits and rates, upon ratification of the board, for single-employer
3026		-	2866risk pools;
3027		-	2867 (n) request proposals for one or more out-of-state provider networks and a dental
3028		-	2868health plan administered by a third-party carrier at least once every three years for the purposes
3029		-	2869of:
3030		-	2870 (i) stimulating competition for the benefit of covered individuals;
3031		-	2871 (ii) establishing better geographical coverage of medical care services; and
3032		-	2872 (iii) providing coverage for both active and retired covered individuals;
3033		-	2873 (o) for a proposal that meets the criteria specified in a request for proposals and is
3034		-	2874accepted by the program:
3035		-	2875 (i) offer the proposal to active and retired state-covered individuals; and
3036		-	2876 (ii) at the option of the covered employer, offer the proposal to active and retired
3037		-	2877covered individuals of other covered employers;
3038		-	2878 (p) perform the same functions established in Subsections (1)(a), (b), (e), and (h) for
3039		-	2879the Department of Health and Human Services if the program provides program benefits to
3040		-	2880children enrolled in the Utah Children's Health Insurance Program created in Title 26, Chapter
3041		-	288140, Utah Children's Health Insurance Act;
3042		-	2882 (q) establish rules and procedures governing the admission of political subdivisions or
3043		-	2883educational institutions and their employees to the program;
3044		-	2884 (r) (i) contract directly with medical providers to provide services for covered
3045		-	2885individuals at commercially competitive rates; and
3046		-	2886 (ii) (A) discontinue the preferred network, which offers in-network access to all
3047		-	2887in-state hospitals, for the state risk pool created in Subsection 49-20-202(1)(a) for plan years
3048		-	2888starting on or after July 1, 2022; and
3049		-	2889 (B) for an employee in the state risk pool who fails to elect one of the remaining
3050		-	2890networks before July 1, 2022, enroll the employee and the employee's dependents into the H.B. 410
3051		-	Enrolled Copy
3052		-	- 108 -
3053		-	2891network that best reflects the utilization pattern of that employee and the employee's
3054		-	2892dependents;
3055		-	2893 (s) (i) require state employees and the state employees' dependents to participate in the
3056		-	2894electronic exchange of clinical health records in accordance with Section 26-1-37 unless the
3057		-	2895enrollee opts out of participation; and
3058		-	2896 (ii) prior to enrolling the state employee, each time the state employee logs onto the
3059		-	2897program's website, and each time the enrollee receives written enrollment information from the
3060		-	2898program, provide notice to the enrollee of the enrollee's participation in the electronic exchange
3061		-	2899of clinical health records and the option to opt out of participation at any time;
3062		-	2900 (t) at the request of a procurement unit, as that term is defined in Section 63G-6a-103,
3063		-	2901that administers benefits to program recipients who are not covered by Title 26, Utah Health
3064		-	2902Code, provide services for:
3065		-	2903 (i) drugs;
3066		-	2904 (ii) medical devices; or
3067		-	2905 (iii) other types of medical care; and
3068		-	2906 (u) take additional actions necessary or appropriate to carry out the purposes of this
3069		-	2907chapter.
3070		-	2908 (2) (a) Funds budgeted and expended shall accrue from rates paid by the covered
3071		-	2909employers and covered individuals.
3072		-	2910 (b) The board shall approve administrative costs and report the administrative costs to
3073		-	2911the governor and the Legislature.
3074		-	2912 (3) The Division of Human Resource Management shall include the benefit and rate
3075		-	2913adjustments described in Subsection (1)(j) in the total compensation plan recommended to the
3076		-	2914governor required under Subsection 63A-17-307(5)(a).
3077		-	2915 (4) The program may establish a partnership with a public entity in a different state to
3078		-	2916purchase or share services related to the administration of medical benefits if:
3079		-	2917 (a) the program receives approval for the partnership from the board; and Enrolled Copy H.B. 410
3080		-	- 109 -
3081		-	2918 (b) the partnership:
3082		-	2919 (i) creates cost savings for Utah;
3083		-	2920 (ii) does not commingle state funds with funds of the public entity in the other state;
3084		-	2921and
3085		-	2922 (iii) does not pose a greater actuarial risk to Utah than the program has already
3086		-	2923assumed.
3087		-	2924 Section 24. Section 63J-1-602.1 is amended to read:
3088		-	2925 63J-1-602.1. List of nonlapsing appropriations from accounts and funds.
3089		-	2926 Appropriations made from the following accounts or funds are nonlapsing:
3090		-	2927 (1) The Utah Intracurricular Student Organization Support for Agricultural Education
3091		-	2928and Leadership Restricted Account created in Section 4-42-102.
3092		-	2929 (2) The Native American Repatriation Restricted Account created in Section 9-9-407.
3093		-	2930 (3) The Martin Luther King, Jr. Civil Rights Support Restricted Account created in
3094		-	2931Section 9-18-102.
3095		-	2932 (4) The National Professional Men's Soccer Team Support of Building Communities
3096		-	2933Restricted Account created in Section 9-19-102.
3097		-	2934 (5) Funds collected for directing and administering the C-PACE district created in
3098		-	2935Section 11-42a-106.
3099		-	2936 (6) Money received by the Utah Inland Port Authority, as provided in Section
3100		-	293711-58-105.
3101		-	2938 (7) The "Latino Community Support Restricted Account" created in Section 13-1-16.
3102		-	2939 (8) The Clean Air Support Restricted Account created in Section 19-1-109.
3103		-	2940 (9) The Division of Air Quality Oil, Gas, and Mining Restricted Account created in
3104		-	2941Section 19-2a-106.
3105		-	2942 (10) The Division of Water Quality Oil, Gas, and Mining Restricted Account created in
3106		-	2943Section 19-5-126.
3107		-	2944 (11) The "Support for State-Owned Shooting Ranges Restricted Account" created in H.B. 410
3108		-	Enrolled Copy
3109		-	- 110 -
3110		-	2945Section 23-14-13.5.
3111		-	2946 (12) Award money under the State Asset Forfeiture Grant Program, as provided under
3112		-	2947Section 24-4-117.
3113		-	2948 (13) Funds collected from the program fund for local health department expenses
3114		-	2949incurred in responding to a local health emergency under Section 26-1-38.
3115		-	2950 (14) The Children with Cancer Support Restricted Account created in Section
3116		-	295126-21a-304.
3117		-	2952 (15) State funds for matching federal funds in the Children's Health Insurance Program
3118		-	2953as provided in Section 26-40-108.
3119		-	2954 (16) The Children with Heart Disease Support Restricted Account created in Section
3120		-	295526-58-102.
3121		-	2956 (17) The Technology Development Restricted Account created in Section 31A-3-104.
3122		-	2957 (18) The Criminal Background Check Restricted Account created in Section
3123		-	295831A-3-105.
3124		-	2959 (19) The Captive Insurance Restricted Account created in Section 31A-3-304, except
3125		-	2960to the extent that Section 31A-3-304 makes the money received under that section free revenue.
3126		-	2961 (20) The Title Licensee Enforcement Restricted Account created in Section
3127		-	296231A-23a-415.
3128		-	2963 (21) The Health Insurance Actuarial Review Restricted Account created in Section
3129		-	296431A-30-115.
3130		-	2965 (22) The State Mandated Insurer Payments Restricted Account created in Section
3131		-	296631A-30-118.
3132		-	2967 [(22)] (23) The Insurance Fraud Investigation Restricted Account created in Section
3133		-	296831A-31-108.
3134		-	2969 [(23)] (24) The Underage Drinking Prevention Media and Education Campaign
3135		-	2970Restricted Account created in Section 32B-2-306.
3136		-	2971 [(24)] (25) The Drinking While Pregnant Prevention Media and Education Campaign Enrolled Copy H.B. 410
3137		-	- 111 -
3138		-	2972Restricted Account created in Section 32B-2-308.
3139		-	2973 [(25)] (26) The School Readiness Restricted Account created in Section 35A-15-203.
3140		-	2974 [(26)] (27) Money received by the Utah State Office of Rehabilitation for the sale of
3141		-	2975certain products or services, as provided in Section 35A-13-202.
3142		-	2976 [(27)] (28) The Oil and Gas Administrative Penalties Account created in Section
3143		-	297740-6-11.
3144		-	2978 [(28)] (29) The Oil and Gas Conservation Account created in Section 40-6-14.5.
3145		-	2979 [(29)] (30) The Division of Oil, Gas, and Mining Restricted account created in Section
3146		-	298040-6-23.
3147		-	2981 [(30)] (31) The Electronic Payment Fee Restricted Account created by Section
3148		-	298241-1a-121 to the Motor Vehicle Division.
3149		-	2983 [(31)] (32) The Motor Vehicle Enforcement Division Temporary Permit Restricted
3150		-	2984Account created by Section 41-3-110 to the State Tax Commission.
3151		-	2985 [(32)] (33) The Utah Law Enforcement Memorial Support Restricted Account created
3152		-	2986in Section 53-1-120.
3153		-	2987 [(33)] (34) The State Disaster Recovery Restricted Account to the Division of
3154		-	2988Emergency Management, as provided in Section 53-2a-603.
3155		-	2989 [(34)] (35) The Post Disaster Recovery and Mitigation Restricted Account created in
3156		-	2990Section 53-2a-1302.
3157		-	2991 [(35)] (36) The Department of Public Safety Restricted Account to the Department of
3158		-	2992Public Safety, as provided in Section 53-3-106.
3159		-	2993 [(36)] (37) The Utah Highway Patrol Aero Bureau Restricted Account created in
3160		-	2994Section 53-8-303.
3161		-	2995 [(37)] (38) The DNA Specimen Restricted Account created in Section 53-10-407.
3162		-	2996 [(38)] (39) The Canine Body Armor Restricted Account created in Section 53-16-201.
3163		-	2997 [(39)] (40) The Technical Colleges Capital Projects Fund created in Section
3164		-	299853B-2a-118. H.B. 410
3165		-	Enrolled Copy
3166		-	- 112 -
3167		-	2999 [(40)] (41) The Higher Education Capital Projects Fund created in Section
3168		-	300053B-22-202.
3169		-	3001 [(41)] (42) A certain portion of money collected for administrative costs under the
3170		-	3002School Institutional Trust Lands Management Act, as provided under Section 53C-3-202.
3171		-	3003 [(42)] (43) The Public Utility Regulatory Restricted Account created in Section
3172		-	300454-5-1.5, subject to Subsection 54-5-1.5(4)(d).
3173		-	3005 [(43)] (44) Funds collected from a surcharge fee to provide certain licensees with
3174		-	3006access to an electronic reference library, as provided in Section 58-3a-105.
3175		-	3007 [(44)] (45) Certain fines collected by the Division of Professional Licensing for
3176		-	3008violation of unlawful or unprofessional conduct that are used for education and enforcement
3177		-	3009purposes, as provided in Section 58-17b-505.
3178		-	3010 [(45)] (46) Funds collected from a surcharge fee to provide certain licensees with
3179		-	3011access to an electronic reference library, as provided in Section 58-22-104.
3180		-	3012 [(46)] (47) Funds collected from a surcharge fee to provide certain licensees with
3181		-	3013access to an electronic reference library, as provided in Section 58-55-106.
3182		-	3014 [(47)] (48) Funds collected from a surcharge fee to provide certain licensees with
3183		-	3015access to an electronic reference library, as provided in Section 58-56-3.5.
3184		-	3016 [(48)] (49) Certain fines collected by the Division of Professional Licensing for use in
3185		-	3017education and enforcement of the Security Personnel Licensing Act, as provided in Section
3186		-	301858-63-103.
3187		-	3019 [(49)] (50) The Relative Value Study Restricted Account created in Section 59-9-105.
3188		-	3020 [(50)] (51) The Cigarette Tax Restricted Account created in Section 59-14-204.
3189		-	3021 [(51)] (52) Funds paid to the Division of Real Estate for the cost of a criminal
3190		-	3022background check for a mortgage loan license, as provided in Section 61-2c-202.
3191		-	3023 [(52)] (53) Funds paid to the Division of Real Estate for the cost of a criminal
3192		-	3024background check for principal broker, associate broker, and sales agent licenses, as provided
3193		-	3025in Section 61-2f-204. Enrolled Copy H.B. 410
3194		-	- 113 -
3195		-	3026 [(53)] (54) Certain funds donated to the Department of Health and Human Services, as
3196		-	3027provided in Section 26B-1-202.
3197		-	3028 [(54)] (55) The National Professional Men's Basketball Team Support of Women and
3198		-	3029Children Issues Restricted Account created in Section 26B-1-302.
3199		-	3030 [(55)] (56) Certain funds donated to the Division of Child and Family Services, as
3200		-	3031provided in Section 80-2-404.
3201		-	3032 [(56)] (57) The Choose Life Adoption Support Restricted Account created in Section
3202		-	303380-2-502.
3203		-	3034 [(57)] (58) Funds collected by the Office of Administrative Rules for publishing, as
3204		-	3035provided in Section 63G-3-402.
3205		-	3036 [(58)] (59) The Immigration Act Restricted Account created in Section 63G-12-103.
3206		-	3037 [(59)] (60) Money received by the military installation development authority, as
3207		-	3038provided in Section 63H-1-504.
3208		-	3039 [(60)] (61) The Computer Aided Dispatch Restricted Account created in Section
3209		-	304063H-7a-303.
3210		-	3041 [(61)] (62) The Unified Statewide 911 Emergency Service Account created in Section
3211		-	304263H-7a-304.
3212		-	3043 [(62)] (63) The Utah Statewide Radio System Restricted Account created in Section
3213		-	304463H-7a-403.
3214		-	3045 [(63)] (64) The Utah Capital Investment Restricted Account created in Section
3215		-	304663N-6-204.
3216		-	3047 [(64)] (65) The Motion Picture Incentive Account created in Section 63N-8-103.
3217		-	3048 [(65)] (66) Certain money payable for expenses of the Pete Suazo Utah Athletic
3218		-	3049Commission, as provided under Section 63N-10-301.
3219		-	3050 [(66)] (67) Funds collected by the housing of state probationary inmates or state parole
3220		-	3051inmates, as provided in Subsection 64-13e-104(2).
3221		-	3052 [(67)] (68) Certain forestry and fire control funds utilized by the Division of Forestry, H.B. 410
3222		-	Enrolled Copy
3223		-	- 114 -
3224		-	3053Fire, and State Lands, as provided in Section 65A-8-103.
3225		-	3054 [(68)] (69) The Amusement Ride Safety Restricted Account, as provided in Section
3226		-	305572-16-204.
3227		-	3056 [(69)] (70) Certain funds received by the Office of the State Engineer for well drilling
3228		-	3057fines or bonds, as provided in Section 73-3-25.
3229		-	3058 [(70)] (71) The Water Resources Conservation and Development Fund, as provided in
3230		-	3059Section 73-23-2.
3231		-	3060 [(71)] (72) Funds donated or paid to a juvenile court by private sources, as provided in
3232		-	3061Subsection 78A-6-203(1)(c).
3233		-	3062 [(72)] (73) Fees for certificate of admission created under Section 78A-9-102.
3234		-	3063 [(73)] (74) Funds collected for adoption document access as provided in Sections
3235		-	306478B-6-141, 78B-6-144, and 78B-6-144.5.
3236		-	3065 [(74)] (75) Funds collected for indigent defense as provided in Title 78B, Chapter 22,
3237		-	3066Part 4, Utah Indigent Defense Commission.
3238		-	3067 [(75)] (76) The Utah Geological Survey Oil, Gas, and Mining Restricted Account
3239		-	3068created in Section 79-3-403.
3240		-	3069 [(76)] (77) Revenue for golf user fees at the Wasatch Mountain State Park, Palisades
3241		-	3070State Park, and Green River State Park, as provided under Section 79-4-403.
3242		-	3071 [(77)] (78) Funds donated as described in Section 41-1a-422 for the State Park Fees
3243		-	3072Restricted Account created in Section 79-4-402 for support of the Division of State Parks' dark
3244		-	3073sky initiative.
3245		-	3074 [(78)] (79) Certain funds received by the Division of State Parks from the sale or
3246		-	3075disposal of buffalo, as provided under Section 79-4-1001.
	3171	+	3064 [(74)] (75) Funds collected for indigent defense as provided in Title 78B, Chapter 22,
	3172	+	3065Part 4, Utah Indigent Defense Commission.
	3173	+	3066 [(75)] (76) The Utah Geological Survey Oil, Gas, and Mining Restricted Account
	3174	+	3067created in Section 79-3-403.
	3175	+	3068 [(76)] (77) Revenue for golf user fees at the Wasatch Mountain State Park, Palisades
	3176	+	3069State Park, and Green River State Park, as provided under Section 79-4-403.
	3177	+	3070 [(77)] (78) Funds donated as described in Section 41-1a-422 for the State Park Fees
	3178	+	3071Restricted Account created in Section 79-4-402 for support of the Division of State Parks' dark
	3179	+	3072sky initiative.
	3180	+	3073 [(78)] (79) Certain funds received by the Division of State Parks from the sale or
	3181	+	3074disposal of buffalo, as provided under Section 79-4-1001.