(1) Notwithstanding any policy or contract language or any other statute, and unless ordered otherwise by the receivership court upon application by the receiver, a reinsurance contract by which the insurer assumes the insurance obligations of another insurer is cancelled upon entry of an order of liquidation.
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Terms Used In Utah Code 31A-27a-402

  • Affected guaranty association: means a guaranty association that is or may become liable for payment of a covered claim. See Utah Code 31A-27a-102
  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Annuity: means an agreement to make periodical payments for a period certain or over the lifetime of one or more individuals if the making or continuance of all or some of the series of the payments, or the amount of the payment, is dependent upon the continuance of human life. See Utah Code 31A-1-301
  • 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
  • Contract: A legal written agreement that becomes binding when signed.
  • Disability: means a physiological or psychological condition that partially or totally limits an individual's ability to:
         (51)(a) perform the duties of:
              (51)(a)(i) that individual's occupation; or
              (51)(a)(ii) an occupation for which the individual is reasonably suited by education, training, or experience; or
         (51)(b) perform two or more of the following basic activities of daily living:
              (51)(b)(i) eating;
              (51)(b)(ii) toileting;
              (51)(b)(iii) transferring;
              (51)(b)(iv) bathing; or
              (51)(b)(v) dressing. See Utah Code 31A-1-301
  • Disability income insurance: means the same as that term is defined in Subsection (89). See Utah Code 31A-1-301
  • Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
  • Guaranty association: means :
         (20)(a) a mechanism mandated by Chapter 28, Guaranty Associations; or
         (20)(b) a similar mechanism in another state that is created for the payment of claims or continuation of policy obligations of a financially impaired or insolvent insurer. See Utah Code 31A-27a-102
  • health insurance: means insurance providing:
              (84)(a)(i) a health care benefit; or
              (84)(a)(ii) payment of an incurred health care expense. See Utah Code 31A-1-301
  • insolvent: means that an insurer:
         (22)(a) is unable to pay its obligations when they are due;
         (22)(b) does not have admitted assets at least equal to all of its liabilities; or
         (22)(c) has a total adjusted capital that is less than its mandatory control level RBC, as defined in Section 31A-17-601. See Utah Code 31A-27a-102
  • Insurance: includes :
              (96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
              (96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
              (96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
  • Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy and includes:
              (103)(a)(i) a policyholder;
              (103)(a)(ii) a subscriber;
              (103)(a)(iii) a member; and
              (103)(a)(iv) a beneficiary. See Utah Code 31A-1-301
  • insurer: means a person who:
         (23)(a) is doing, has done, purports to do, or is licensed to do the business of insurance;
         (23)(b) is or has been subject to the authority of, or to rehabilitation, liquidation, reorganization, supervision, or conservation by an insurance commissioner; or
         (23)(c) is included under Section 31A-27a-104. See Utah Code 31A-27a-102
  • Life insurance: means :
              (114)(a)(i) insurance on a human life; and
              (114)(a)(ii) insurance pertaining to or connected with human life. See Utah Code 31A-1-301
  • Long-term care insurance: includes :
              (121)(b)(i) any of the following that provide directly or supplement long-term care insurance:
                   (121)(b)(i)(A) a group or individual annuity or rider; or
                   (121)(b)(i)(B) a life insurance policy or rider;
              (121)(b)(ii) a policy or rider that provides for payment of benefits on the basis of:
                   (121)(b)(ii)(A) cognitive impairment; or
                   (121)(b)(ii)(B) functional capacity; or
              (121)(b)(iii) a qualified long-term care insurance contract. See Utah Code 31A-1-301
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • 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 all clauses, riders, endorsements, and papers that are a part of a policy. See Utah Code 31A-27a-102
  • property of the estate: includes :
         (30)(a) a right, title, or interest of the insurer in property:
              (30)(a)(i) whether:
                   (30)(a)(i)(A) legal or equitable;
                   (30)(a)(i)(B) tangible or intangible; or
                   (30)(a)(i)(C) choate or inchoate; and
              (30)(a)(ii) including choses in action, contract rights, and any other interest recognized under the laws of this state;
         (30)(b) entitlements that exist before the entry of an order of rehabilitation or liquidation;
         (30)(c) entitlements that may arise by operation of this chapter or other provisions of law allowing the receiver to avoid prior transfers or assert other rights; and
         (30)(d)
              (30)(d)(i) records or data that is otherwise the property of the insurer; and
              (30)(d)(ii) records or data similar to those described in Subsection (30)(d)(i) that are within the possession, custody, or control of a managing general agent, a third party administrator, a management company, a data processing company, an accountant, an attorney, an affiliate, or other person. See Utah Code 31A-27a-102
  • receiver: means the commissioner or the commissioner's designee, including a rehabilitator, liquidator, or ancillary receiver. See Utah Code 31A-27a-102
  • receivership: means a rehabilitation, liquidation, or ancillary receivership. See Utah Code 31A-27a-102
  • receivership court: refers to the court in which a delinquency proceeding is pending. See Utah Code 31A-27a-102
  • Reinsurance: means a transaction or contract under which an assuming insurer agrees to indemnify a ceding insurer against all, or a part, of a loss that the ceding insurer may sustain under the one or more policies that the ceding insurer issues or will issue. See Utah Code 31A-27a-102
  • Reinsurer: means a person licensed in this state as an insurer with the authority to assume reinsurance. See Utah Code 31A-1-301
  • Statute: A law passed by a legislature.
  • Transfer: includes the sale and every other and different mode of disposing of or parting with property or with an interest in property, whether:
              (46)(a)(i) directly or indirectly;
              (46)(a)(ii) absolutely or conditionally;
              (46)(a)(iii) voluntarily or involuntarily; or
              (46)(a)(iv) by or without judicial proceedings. See Utah Code 31A-27a-102
(2)

     (2)(a) Notwithstanding any policy or contract language or any other statute, and subject to Subsection (2)(c), the following in effect at the time of issuance of an order of liquidation shall continue in force as provided in this section until the time period specified in Subsection (2)(b):

          (2)(a)(i) a policy;
          (2)(a)(ii) an insurance contract, other than reinsurance by which the insurer has ceded insurance obligations to another person;
          (2)(a)(iii) a surety bond; or
          (2)(a)(iv) a surety undertaking.
     (2)(b) Any item listed in Subsection (2)(a) continues in force:

          (2)(b)(i) until the earlier of:

               (2)(b)(i)(A) 30 days from the day on which the liquidation order is entered;
               (2)(b)(i)(B) the day on which the policy coverage expires;
               (2)(b)(i)(C) the day on which the insured:

                    (2)(b)(i)(C)(I) replaces the insurance coverage with equivalent insurance with another insurer; or
                    (2)(b)(i)(C)(II) otherwise terminates the policy;
               (2)(b)(i)(D) the day on which the liquidator effects a transfer of the policy obligation pursuant to Subsection 31A-27a-405(1)(i); or
               (2)(b)(i)(E) the date proposed by the liquidator and approved by the receivership court to cancel coverage; or
          (2)(b)(ii) unless further extended by the receiver with the approval of the receivership court.
     (2)(c) This Subsection (2) does not apply to:

          (2)(c)(i) life insurance;
          (2)(c)(ii) disability income insurance;
          (2)(c)(iii) long-term care insurance;
          (2)(c)(iv) health insurance; or
          (2)(c)(v) an annuity.
(3) An order of liquidation under Section 31A-27a-401 terminates coverages at the time specified in Subsections (1) and (2) for purposes of any other statute.
(4)

     (4)(a) A life insurance policy, disability income insurance policy, long-term care insurance policy, health insurance policy, or an annuity continues in force:

          (4)(a)(i) if covered by an affected guaranty association or portions are covered by one or more affected guaranty associations, under applicable law;
          (4)(a)(ii) subject to the terms of the policy or annuity, including any terms restructured pursuant to a court-approved rehabilitation plan; and
          (4)(a)(iii) to the extent necessary to permit an affected guaranty association to discharge its statutory obligations.
     (4)(b) A life insurance policy, disability income insurance policy, long-term care insurance policy, health insurance policy, or an annuity not covered by one or more guaranty associations, or those portions not covered by one or more guaranty associations terminates as provided under Subsection (2), except to the extent that the liquidator proposes and the receivership court approves the use of property of the estate, consistent with Section 31A-27a-701, for the purpose of continuing the contract or coverage by transferring the contract or coverage to an assuming reinsurer.
(5) The cancellation of a bond or surety undertaking does not release any cosurety or guarantor.
(6) Except as otherwise provided in this chapter, the obligations of the insolvent insurer’s reinsurers may not be released or discharged of a policy ceded to a reinsurer by a termination under this section.
(7) A contract by which the insurer reinsures obligations arising under a life insurance policy, disability income insurance policy, long-term care insurance policy, or an annuity continues or terminates as provided in Section 31A-27a-513.

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