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Terms Used In Utah Code 31A-27a-512

  • 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
  • Affiliate: is a s defined in Section 31A-1-301. See Utah Code 31A-27a-102
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Commissioner: is a s defined in Section 31A-1-301. See Utah Code 31A-27a-102
  • Contract: A legal written agreement that becomes binding when signed.
  • creditor: means a person having a claim against an insurer whether the claim is:
         (5)(a) matured or not matured;
         (5)(b) liquidated or unliquidated;
         (5)(c) secured or unsecured;
         (5)(d) absolute; or
         (5)(e) fixed or contingent. See Utah Code 31A-27a-102
  • domiciliary state: means the state in which an insurer is incorporated or organized, except that "domiciliary state" means:
         (12)(a) in the case of an alien insurer, its state of entry; or
         (12)(b) in the case of a risk retention group, the state in which the risk retention group is chartered as contemplated in the Liability Risk Retention Act, Utah Code 31A-27a-102
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Filing: when used as a noun, means an item required to be filed with the department including:
         (70)(a) a policy;
         (70)(b) a rate;
         (70)(c) a form;
         (70)(d) a document;
         (70)(e) a plan;
         (70)(f) a manual;
         (70)(g) an application;
         (70)(h) a report;
         (70)(i) a certificate;
         (70)(j) an endorsement;
         (70)(k) an actuarial certification;
         (70)(l) a licensee annual statement;
         (70)(m) a licensee renewal application;
         (70)(n) an advertisement;
         (70)(o) a binder; or
         (70)(p) an outline of coverage. See Utah Code 31A-1-301
  • 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
  • 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
  • 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
  • Proceeding: includes an action or special statutory proceeding. See Utah Code 31A-1-301
  • Property: includes both real and personal property. See Utah Code 68-3-12.5
  • Rate: means :
              (163)(a)(i) the cost of a given unit of insurance; or
              (163)(a)(ii) for property or casualty insurance, that cost of insurance per exposure unit either expressed as:
                   (163)(a)(ii)(A) a single number; or
                   (163)(a)(ii)(B) a pure premium rate, adjusted before the application of individual risk variations based on loss or expense considerations to account for the treatment of:
                        (163)(a)(ii)(B)(I) expenses;
                        (163)(a)(ii)(B)(II) profit; and
                        (163)(a)(ii)(B)(III) individual insurer variation in loss experience. See Utah Code 31A-1-301
  • 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
  • Writing: includes :
         (48)(a) printing;
         (48)(b) handwriting; and
         (48)(c) information stored in an electronic or other medium if the information is retrievable in a perceivable format. See Utah Code 68-3-12.5
     (1)(a) Except as otherwise provided in this chapter, the amount recoverable by the receiver from a reinsurer may not be reduced as a result of a delinquency proceeding with a finding of insolvency, regardless of any provision in the reinsurance contract or other agreement.
     (1)(b) An agreement, written, oral, or otherwise, may not be enforced to the extent it is in conflict, or not in strict compliance with this section.
     (1)(c) Except as expressly provided in this section, a person other than the receiver whether as a creditor, third party beneficiary, or otherwise does not have a direct right to reinsurance proceeds from any reinsurer of the insolvent insurer:

          (1)(c)(i) on the basis of any written or oral agreement; or
          (1)(c)(ii) pursuant to an action or cause of action seeking any equitable or legal remedy.
     (1)(d) This section applies to all the insurer’s reinsurance contracts including:

          (1)(d)(i) treaty reinsurance;
          (1)(d)(ii) quota share reinsurance;
          (1)(d)(iii) facultative reinsurance; or
          (1)(d)(iv) a fronting or captive reinsurance arrangement.
(2) Except as otherwise provided in Subsection (9), the amount recoverable by the liquidator from a reinsurer is payable under one or more contracts reinsured by the reinsurer on the basis of:

     (2)(a) proof of payment of the insured claim by an affected guaranty association, the insurer, or the receiver, to the extent of the payment; or
     (2)(b) the allowance of the claim pursuant to:

          (2)(b)(i) Section 31A-27a-608;
          (2)(b)(ii) an order of the receivership court; or
          (2)(b)(iii) a plan of rehabilitation.
(3) If the insurer takes credit for a reinsurance contract in a filing or submission made to the commissioner and the reinsurance contract does not contain the provisions required with respect to the obligations of reinsurers in the event of insolvency of the reinsured, the reinsurance contract is considered to contain the provisions required with respect to:

     (3)(a) the obligations of reinsurers in the event of insolvency of the reinsured in order to obtain credit for reinsurance; or
     (3)(b) other applicable statutes.
(4) A reinsurance contract that under Subsection (3) is considered to contain certain provisions, is considered to contain a provision that:

     (4)(a) in the event of insolvency and the appointment of a receiver, the reinsurance obligation is payable to the ceding insurer or to its receiver without diminution because of the insolvency or because the receiver fails to pay all or a portion of the claim;
     (4)(b) payment shall be made upon either:

          (4)(b)(i) to the extent of the payment, proof of payment of the insured claim by an affected guaranty association, the insurer, or the receiver; or
          (4)(b)(ii) the allowance of the claim pursuant to:

               (4)(b)(ii)(A) Section 31A-27a-608;
               (4)(b)(ii)(B) an order of the receivership court; or
               (4)(b)(ii)(C) a plan of rehabilitation; and
     (4)(c) if a reinsurer does not pay the amount billed by the receiver within 60 days after the mailing by the receiver, interest on the unpaid billed amount will begin to accrue at the statutory legal rate provided in Subsection 15-1-1(2), except that all or a portion of the interest may be waived as part of an arbitration proceeding.
(5)

     (5)(a) The receiver shall notify in writing, in accordance with the terms of the contract, each reinsurer obligated in relation to the claim or the pendency of a claim against the reinsured company.
     (5)(b) The receiver’s failure to give notice of a pending claim pursuant to a provision in a reinsurance contract:

          (5)(b)(i) does not excuse the obligation of the reinsurer unless the reinsurer is prejudiced by the receiver’s failure; and
          (5)(b)(ii) if the reinsurer is prejudiced, reduces the reinsurer’s obligations only to the extent of the prejudice.
     (5)(c) A reinsurer may interpose, at its own expense, in a proceeding in which a claim is to be adjudicated, any one or more defenses that the reinsurer considers available to the reinsured company or its receiver.
(6) The entry of an order of rehabilitation or liquidation:

     (6)(a) may not be considered a breach or an anticipatory breach of a reinsurance contract; and
     (6)(b) is not grounds for retroactive revocation or retroactive cancellation of a reinsurance contract by the reinsurer.
(7)

     (7)(a) If a reinsurance payment to a receiver of a ceding insurer is later determined to be a payment in excess of the amounts actually due to the receiver, the excess shall be:

          (7)(a)(i) credited against future payments due to the receiver; or
          (7)(a)(ii) repaid to the reinsurer as an administrative expense of the estate pursuant to Subsection 31A-27a-701(2)(g).
     (7)(b) A repayment under this Subsection (7) may be limited on the basis of the property remaining in the estate.
(8)

     (8)(a) Subject to Subsection (1):

          (8)(a)(i) except as provided in Subsection (8)(a)(ii):

               (8)(a)(i)(A) a payment made by the reinsurer directly to an insured or other creditor does not diminish the reinsurer’s obligation to the insurer’s estate; and
               (8)(a)(i)(B) a payment made by the reinsurer shall be made directly to the ceding insurer or its receiver;
          (8)(a)(ii) Subsection (8)(a)(i) does not apply when:

               (8)(a)(ii)(A) the reinsurance contract or other written agreement to which the insured, ceding insurer, and reinsurer are all parties:

                    (8)(a)(ii)(A)(I) specifically provides another payee, other than an affiliate of the ceding insurer or reinsurer, of the reinsurance in the event of the insolvency or receivership of the ceding insurer; and
                    (8)(a)(ii)(A)(II) the provision described in this Subsection (8)(a)(ii)(A) is contained in:

                         (8)(a)(ii)(A)(II)(Aa) the reinsurance contract as it is written on the day on which the reinsurance contract is initially executed; or
                         (8)(a)(ii)(A)(II)(Bb) the other written agreement as it is written on the day on which the initial policy is issued;
               (8)(a)(ii)(B) the reinsurance contract, as it is written on the day on which the reinsurance contract is initially executed, contains a provision where the assuming insurer with the consent of the direct insured and the ceding insurer assumes all policy obligations of the ceding insurer:

                    (8)(a)(ii)(B)(I) as a direct obligation of the assuming insurer to the payees under the policies; and
                    (8)(a)(ii)(B)(II) in substitution for the entire obligations of the ceding insurer to the payees; or
               (8)(a)(ii)(C) a life and health insurance guaranty association makes the election to succeed to the rights and obligations of the insolvent insurer under a contract of reinsurance:

                    (8)(a)(ii)(C)(I) in accordance with:

                         (8)(a)(ii)(C)(I)(Aa) Section 31A-27a-513; or
                         (8)(a)(ii)(C)(I)(Bb) the life and health guaranty association laws of its domiciliary state; or
                    (8)(a)(ii)(C)(II) pursuant to other applicable law, rule, order, or assignment contract; and
          (8)(a)(iii) in the circumstances described in Subsection (8)(a)(ii)(C), a payment shall be made directly to or at the direction of the guaranty association.
     (8)(b) Both the receiver and the reinsurer are entitled to recover from a person, other than the receiver or a guaranty association, who unsuccessfully makes a claim directly against the reinsurer the following incurred in preventing any collection by that person:

          (8)(b)(i) the person’s attorney fees; and
          (8)(b)(ii) expenses.
(9) This chapter may not be construed to authorize the liquidator or any other entity to compel payment from a nonlife reinsurer:

     (9)(a) on the basis of estimated incurred but not reported losses, loss expenses, or case reserves for unpaid losses and loss expenses, except under Sections 31A-27a-515 and 31A-27a-516; and
     (9)(b) with respect to a claim allowed in accordance with Section 31A-27a-605.
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