Utah Code 31A-15-204. Risk retention groups not chartered in this state — Designation of commissioner as agent — Compliance with unfair claims settlement practices act — Deceptive, false, or fraudulent practices — Examination regarding financial …
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(1) Risk retention groups chartered and licensed in other states and seeking to do business as a risk retention group in this state shall comply with the following:
Terms Used In Utah Code 31A-15-204
- Application: means a document:(10)(a)(10)(a)(i) completed by an applicant to provide information about the risk to be insured; and(10)(a)(ii) that contains information that is used by the insurer to evaluate risk and decide whether to:(10)(a)(ii)(A) insure the risk under:(10)(a)(ii)(A)(I) the coverage as originally offered; or(10)(a)(ii)(A)(II) a modification of the coverage as originally offered; or(10)(a)(ii)(B) decline to insure the risk; or(10)(b) used by the insurer to gather information from the applicant before issuance of an annuity contract. See Utah Code 31A-1-301
- Certificate: means evidence of insurance given to:
(23)(a) an insured under a group insurance policy; or(23)(b) a third party. See Utah Code 31A-1-301- commissioner: means the insurance commissioner of Utah or the commissioner, director, or superintendent of insurance in another state. See Utah Code 31A-15-202
- feasibility study: means an analysis that presents the expected activities and results of a risk retention group, including at a minimum:
(8)(a) information sufficient to verify that its members are engaged in businesses or activities similar or related with respect to the liability to which the members are exposed by virtue of any related, similar or common business, trade, product, services, premises or operations;(8)(b) for each state in which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer;(8)(c) historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available;(8)(d) pro forma financial statements and projections;(8)(e) appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;(8)(f) identification of management, underwriting and claims procedures, marketing methods, managerial oversight methods, investment policies, and reinsurance agreements;(8)(g) identification of each state in which the risk retention group has obtained, or sought to obtain, a charter and license, and a description of its status in each such state; and(8)(h) any other matters required by the commissioner of the state in which the risk retention group is chartered for liability insurance companies authorized by the insurance laws of that state. See Utah Code 31A-15-202- Form: means one of the following prepared for general use:
(74)(a)(i) a policy;(74)(a)(ii) a certificate;(74)(a)(iii) an application;(74)(a)(iv) an outline of coverage; or(74)(a)(v) an endorsement. See Utah Code 31A-1-301- Hazardous financial condition: means that a risk retention group, based on its present or reasonably anticipated financial condition, although not yet financially impaired or insolvent, is unlikely to be able:
(4)(a) to meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or(4)(b) to pay other obligations in the normal course of business. See Utah Code 31A-15-202- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Insurance: means primary insurance, excess insurance, reinsurance, surplus lines insurance, and any other arrangement for shifting and distributing risk which is determined to be insurance under the laws of this state. See Utah Code 31A-15-202
- insurance company: means a person doing an insurance business as a principal including:
(104)(a)(i) a fraternal benefit society;(104)(a)(ii) an issuer of a gift annuity other than an annuity specified in Subsections31A-22-1305 (2) and (3);(104)(a)(iii) a motor club;(104)(a)(iv) an employee welfare plan;(104)(a)(v) a person purporting or intending to do an insurance business as a principal on that person's own account; and(104)(a)(vi) a health maintenance organization. See Utah Code 31A-1-301- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liability: means legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses because of injuries to other persons, damage to their property, or other damage or loss to other persons resulting from or arising out of:
(6)(a)(i) any business, whether profit or nonprofit, trade, product, services, including professional services, premises, or operations; or(6)(a)(ii) any activity of any state or local government or any agency or political subdivision of any state or local government. See Utah Code 31A-15-202- Liability insurance: includes :
(112)(b)(i) vehicle liability insurance;(112)(b)(ii) residential dwelling liability insurance; and(112)(b)(iii) making inspection of, and issuing a certificate of inspection upon, an elevator, boiler, machinery, or apparatus of any kind when done in connection with insurance on the elevator, boiler, machinery, or apparatus. See Utah Code 31A-1-301- License: includes a certificate of authority issued to an insurer. See Utah Code 31A-1-301
- Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
- Order: means an order of the commissioner. See Utah Code 31A-1-301
- Person: includes :
(146)(a) an individual;(146)(b) a partnership;(146)(c) a corporation;(146)(d) an incorporated or unincorporated association;(146)(e) a joint stock company;(146)(f) a trust;(146)(g) a limited liability company;(146)(h) a reciprocal;(146)(i) a syndicate; or(146)(j) another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301- Policy: includes a service contract issued by:
(150)(b)(i) a motor club under Chapter 11, Motor Clubs;(150)(b)(ii) a service contract provided under Chapter 6a, Service Contracts; and(150)(b)(iii) a corporation licensed under:(150)(b)(iii)(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or(150)(b)(iii)(B) Chapter 8, Health Maintenance Organizations and Limited Health Plans. See Utah Code 31A-1-301- Premium: includes , however designated:
(156)(b)(i) an assessment;(156)(b)(ii) a membership fee;(156)(b)(iii) a required contribution; or(156)(b)(iv) monetary consideration. See Utah Code 31A-1-301- Proceeding: includes an action or special statutory proceeding. See Utah Code 31A-1-301
- Process: means a writ or summons issued in the course of a judicial proceeding. See Utah Code 68-3-12.5
- Risk retention group: means any corporation or other limited liability association:
(11)(a) whose primary activity consists of assuming and spreading all, or any portion of, the liability exposure of its group members;(11)(b) which is organized for the primary purpose of conducting the activity described under Subsection (11)(a);(11)(c) that:(11)(c)(i) is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or(11)(c)(ii)(11)(c)(ii)(A) before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before January 1, 1985, had certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of that state;(11)(c)(ii)(B) except that any group as described in Subsection (11)(c)(ii)(A) shall be considered to be a risk retention group only if it has been engaged in business continuously since January 1, 1985, and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability, as these terms were defined in the Product Liability Risk Retention Act of 1981 before the date of the enactment of the Liability Risk Retention Act of 1986;(11)(d) that does not exclude any person from membership in the group solely to provide for members of the group a competitive advantage over the excluded person;(11)(e) that:(11)(e)(i) has as its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the group; or(11)(e)(ii) has as its sole owner an organization that has as:(11)(e)(ii)(A) its members only persons who comprise the membership of the risk retention group; and(11)(e)(ii)(B) its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the group;(11)(f) whose members are engaged in businesses or activities similar or related with respect to the liability to which the members are exposed by virtue of any related, similar, or common business trade, products, services, premises or operations;(11)(g) whose activities do not include providing insurance other than:(11)(g)(i) liability insurance for assuming and spreading all or any portion of the liability of its group members; and(11)(g)(ii) reinsurance with respect to the liability of any other risk retention group, or any members of the other group, which is engaged in businesses or activities so that the group or member meets the requirement described in Subsection (11)(f) for membership in the risk retention group which provides the reinsurance; and(11)(h) the name of which includes the phrase "risk retention group. See Utah Code 31A-15-202- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: means :
(12)(a) a state of the United States; or(12)(b) the District of Columbia. See Utah Code 31A-15-202- Statute: A law passed by a legislature.
(1)(a) Before offering insurance in this state a risk retention group shall submit to the commissioner:(1)(a)(i) a statement identifying the states in which the group is chartered and licensed as a liability insurance company, its charter date, its principal place of business, and any other information, including information on its membership, the commissioner may require to verify that the group is a qualified risk retention group as defined in Section 31A-15-202; and(1)(a)(ii) a copy of its plan of operations or feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed, except a plan or study is not required for any line or classification of liability insurance that:(1)(a)(ii)(A) was defined in the Product Liability Risk Retention Act of 1981 before October 27, 1986; and(1)(a)(ii)(B) was offered before that date by any risk retention group that had been chartered and operating for not less than three years before that date.(1)(b) The risk retention group shall submit to the commissioner a copy of any revision to its plan or study required by Subsection 31A-15-203(3) at the same time it submits the revision of its chartering state.(1)(c) The risk retention group shall submit, on a form approved by the commissioner, a statement of registration and a notice designating the commissioner as agent for the purpose of receiving service of legal documents or process.(1)(d) The risk retention group shall pay annual license fees required by Section 31A-3-103.(2) Any risk retention group doing business in this state shall submit to the commissioner:(2)(a) a copy of the group’s financial statement submitted to the state in which the risk retention group is chartered and licensed, which shall be certified by an independent public accountant and shall contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a loss reserve specialist qualified under criteria approved by the commissioner;(2)(b) a copy of each examination of the risk retention group as certified by the commissioner or public official conducting the examination;(2)(c) if the commissioner requests, a copy of any information or document pertaining to any outside audit performed with respect to the risk retention group; and(2)(d) any other information required to verify the group’s continuing qualification as a risk retention group within the definition in Section 31A-15-202.(3)(3)(a) Each risk retention group shall pay premium taxes and taxes on premiums of direct business for risks resident or located within this state, and shall report to the Utah State Tax Commission the net premiums written for risks resident or located within this state. Each risk retention group shall be subject to taxation, and any applicable fines and penalties related to taxation, on the same basis as a foreign admitted insurer.(3)(b) To the extent licensed producers are utilized pursuant to Section 31A-15-212, they shall report to the commissioner the premiums for direct business for all risks resident or located within this state that the producers have placed with, or on behalf of, a risk retention group not chartered in this state.(3)(c) To the extent that insurance producers are utilized pursuant to Section 31A-15-212 they shall keep a complete and separate record of all policies procured from each risk retention group. The record shall be open to examination by the commissioner, as provided under Section 31A-23a-412. These records shall include the following for each policy and each kind of insurance provided under each policy:(3)(c)(i) the limit of liability;(3)(c)(ii) the time period covered;(3)(c)(iii) the effective date;(3)(c)(iv) the name of the risk retention group that issued the policy;(3)(c)(v) the gross premium charged;(3)(c)(vi) the amount of any returned premiums; and(3)(c)(vii) additional information required by the insurance commissioner.(4) Each risk retention group and its agents and representatives shall comply with:(4)(a) the Unfair Claims Settlement Practices Act, including Section 31A-15-207;(4)(b) Chapter 26, Part 3, Claim Practices; and(4)(c) any other provision of law relating to claims settlement practices.(5) Each risk retention group shall comply with the laws of this state regarding deceptive, false, and fraudulent acts, practices regulated under Chapter 23a, Part 4, Marketing Practices, and any other provision of law relating to deceptive, false, or fraudulent practices. The commissioner may only obtain an injunction regarding the conduct described in this subsection from a court of competent jurisdiction.(6) If the commissioner of the jurisdiction in which the group is chartered and licensed has not initiated an examination or does not initiate an examination within 60 days after a request by the commissioner of this state, the risk retention group shall submit to an examination by the commissioner of this state to determine its financial condition. Any examination conducted under this subsection shall be coordinated to avoid unjustified repetition and shall be conducted in an expeditious manner and in accordance with the National Association of Insurance Commissioner’s Examiner Handbook.(7) Each application form for insurance from a risk retention group and each policy and certificate issued by a risk retention group shall contain the following notice in ten-point type on its front and declaration pages:“NOTICE This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.”
(8) The following acts by a risk retention group are prohibited:(8)(a) the solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in the group; and(8)(b) the solicitation or sale of insurance by, or operation of, a risk retention group that is in hazardous financial condition or financially impaired.(9) A risk retention group may not do business in this state if an insurance company is directly or indirectly a member or owner of the risk retention group, unless all members of the group are insurance companies.(10) The terms of any insurance policy issued by a risk retention group may not provide, or be construed to provide, coverage prohibited generally by statute of this state or declared unlawful by the Utah Supreme Court.(11) A risk retention group not chartered in this state and doing business in this state shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by any state’s insurance commissioner if there has been a finding of financial impairment after an examination under Subsection (6).(12) A risk retention group that violates any provision of this part is subject to fines and penalties applicable to licensed insurers generally, including revocation of its right to do business in this state.(13) In addition to complying with the requirements of this section, each risk retention group operating in this state before the effective date of this part shall comply with Subsection (1)(a) within 30 days after the effective date of this part. - Certificate: means evidence of insurance given to: