Utah Laws Flashcards
Utah Laws, Insurance and Licensing
Laws that are given to the state or at least heavily influence by the NAIC.
Utah’s insurance definition - arrangement, contract or plan for the transfer of risks or risks from one person or a group of persons.
The purpose of the Utah Department of Insurance is to promote professional competence of Agents/Producers, Consultants and Managing General Agents, encourage business competition, AUDIT AND CONDUCT INVESTIGATIONS OF INSURERS, govern and promote uniform licensing requirements.
The Utah Insurance Commissioner is appointed by the Governor. The commissioner enforces the laws passed by legislature, he doesn’t have power to change or modify statutes but can influence regulations and rules.
The Commissioner will refuse to issue a Certificate of Authority to an Insurer if they do not have a CAPITAL DEPOSIT, a way the company will remain solvent. Mutual companies need a MINIMUM permanent surplus, and Stock companies need the amount of the required stocks. Foreign and Alien insurers must maintain Capital Deposits in the amount set by the home state.
Premium Rates must not be excessive, inadequate or unfairly discriminatory (sec, race, marital status and policy holders income vs expected losses and hazard classifications).
Rate changes are filed with the commissioner, called USE AND FILE process, where rate changes must be reported to the commissioner within 30 days after the effective date. The commissioner has 10 days to review and if not, the rates go into effect.
USE AND FILE process, a new policy form may be used immediately after it has been filed with the commissioner. Commissioner may deny and the insurer must stop using the form within 15 days. Insurers must maintain policy form records for 5 years.
Licensing -
NIPR (National Insurance Producer Registry) and Sircon - can be used by the commissioner to handle licensing. They handle license applications, license renewals, license reinstatements and insurer appointments/terminations. Sircon is better because it prints your license for you, test questions? Ha
For a resident producer, you must be 18 years old, must pass the exam which is valid for 90 days, submit fingerprints consent to a criminal background check.
For your agency, you may need to get a agency license for the company, you must have an E&O (Errors and Ommissions) liability policy covering 250K per occurrence and 500K per year limit.
A producer may represent multiple agencies and multiple insurers.
Producer confessions - a producer must report to the commissioner and include documentation of any criminal prosecution or administrative action against the producer within 30 days of the initial criminal court appearance. A producer must report immediately if they are in trouble in a different state or committed fraud, deceit, misrepresentation or violation of a law or rule. You can renew your license after 5 years.
For violations the commissioner can charge the licensee twice the amount of the profit gained and $2,500 per violation or $5,000 if you are not licensed. Failure to comply can charge up to $10K.
If a non-resident producer moves to Utah, they have 90 days to establishing legal residence to get their license here without taking the exam, and they have to cancel their previous license. A non resident can also get a license without the exam if the states have agreements between each other.
Adjusters - if they work for a company they don’t have to be licensed. If a they are independent and work for multiple companies, they need a license.
A licensee must notify the commissioner within 30 days if their is a change to the individual or agency’s name, business or resident address, business and residence phone numbers, just business email. A licensee must keep books and records of all consummated transactions for the current calendar year plus 3 years.
Continuing Education-
Producers, adjusters and consultants must complete 24 hours of continuing education every 2 years. Course must be approved by the department of insurance. 12 hours must be in the classroom or online classroom. No more than 12 can be from your company. 3 hours have to be in ethics and the remaining 21 hours can be in any line of insurance. Most do all 24 hours towards the end of the 2 year period. Sales or time management type courses don’t count. There is no carry over if you do 25 hours.
A producers license will lapse on the last day of the licensees birth month, 2 years from the issue date. You get a 1 year grace period to renew without retaking the exam.
A producer can represent the insured and the insurer. YES, as long as it is stated and in writing. Commission is for compensation from the insured, and non commission is compensation (a surcharge) from the applicant.
Unfair marketing practices
It’s unfair to make any communication that contains false or misleading information. You cant say if the Department or Insurance Commissioner has approved, renewed or endorsed a particular policy.
MLMs are illegals.
You cant share commission to lower a clients premium. Rebates are also illegal, giving back premium, commission or fee.
De Minimis gifts or meals are acceptable as long as it is under $10 and the applicant receives a quote from the producer. Meals can valued to $100 as long as the applicant does not have a receipt of an insurance quote or the purchase of insurance.
Utah Laws common to Life and Health
Unfair Claim Settlement Practices Act - any claim practice that lacks good faith violates this act.
- concealing policy benefits
- compensate producers or adjusters for up selling
- cant force the policy owner not use an attorney or threatening that it costs to use legal council.
Underwriters cannot consider sexual orientation but may require HIV testing.
***Utah life and health insurance Guaranty Association - a “guaranty fund” that will pay claims if an insurer goes broke. It’s pays claims of insolvent insurers up to 500K per claim. The funds for this come from the remaining solvent life and health insurers. The insurer cant use the existing of this guaranty association to sell their plans.
In Utah divorce automatically revokes the beneficiary as the death benefit would go to the owners estate.
Life insurer cant require immediate notice of a death loss. Within 15 days, the insurer must provide written knowledge of the proof of loss and provide next steps and inform of any necessary investigation. The investigation must be done within 30 days. The insurer must pay 10% interest from the date of death
Health insurance does not cover
-replacement income
-credit accident and health
-workers comp
-automobile medical payment
-no fault automobile
-self insurance
You have to disclose commissions received if you are writing a policy with a group policy with a 100+ employees
Utah uses a Own Occupation vs Any Occupation policy, which means if you can’t perform your original job, you can get money out of the policy.
For Utah all application for individual and small employer policies must use the Mandatory Utah standard application form provided by the commissioner.
Grace period:
-15 days is premium is paid weekly or monthly, nationally is 7 days for weekly and 10 for monthly.
-30 days if paid more than monthly.
- NOT IN FORCE DURING THE GRACE PERIOD UNLIKE THE NATIONAL RULE.
- Group is 30 days and in force during grace period.
If divorce happens the spouse can apply for an receive coverage under an equivalents individual health policy within 30 days without a physical exam.
If the couple is married the reaming spouse becomes the policy owner.
Maternity stay limits - health policies with maternity benefits must provide hospital benefits for at least 48 hours coverage for month and child following vaginal delivery, and at least 96 hours coverage for mother and children following a c section.
