Qualifications
A licensee must:
a. Be at least 18 years of age, competent, and trustworthy.
b. Intend to transact insurance business in good faith.
c. Not be seeking licensure to transact controlled business. (See Controlled Business in this chapter.)
d. Not have commit
Purpose
1. To promote the professional competence of insurance producers, surplus lines producers, limited line producers, consultants, managing general agents, and reinsurance intermediaries.
2. To provide maximum freedom of marketing methods for insurance, cons
Process
1. A person must hold the appropriate license to transact insurance business in Utah.
2. A valid license includes at least one license type and one line of authority pertaining to that license type.
3. A person may not knowingly hire a person who is not l
Producers and Consultants
1. To act as an insurance producer in Utah, a person or entity must obtain a producer license.
2. An appointment is required if representing an insurer but is not required for inquiring about, or soliciting, life insurance, health insurance, or annuities
Adjusters
1. Public Adjuster means a person who engages in insurance adjusting as a representative of insureds and claimants under insurance policies.
2. Independent Adjuster means an insurance adjuster who engages in insurance adjusting as a representative of insu
Nonresidents
1. To receive a nonresident producer license, a nonresident must:
a. Be licensed and in good standing as a resident producer in his/her home state.
b. Submit an application and fees.
c. Agree to obey state laws.
2. The Commissioner may verify a person's l
Company Regulation
Solvency
The Commissioner may not issue a Certificate of Authority, or renew a Certificate of Authority for a foreign insurer, until the insurer maintains enough reserves. This applies to domestic stock, mutual, or nonprofit health service insurance corporations o
Rebating
A licensee or insurer may not offer any rebate or discount not specified in the policy.
License Maintenance and Duration
Renewal
1. A person must satisfy continuing education requirements by the license expiration date to renew a license.
2. A lapsed license may not be used to transact insurance business, unless reinstated.
Continuing Education Requirements
1. A producer or consultant must biennially complete at least 24 hours of continuing education to renew a license. At least 3 hours must be in ethics. Hours cannot be carried over to the next licensing period.
2. At least half of the continuing education
Reinstatement
1. A license lapses if the licensee fails to:
a. Pay a license fee when due.
b. Submit additional information required to complete the licensing process.
c. Meet any requirement for license renewal when due.
d. Maintain an active license in his/her reside
Change of Address, Assumed Name
A licensee must notify the Commissioner within 30 days:
1. After any change of address or telephone number, or business email address. Before using an assumed name in Utah.
2. Before using an assumed name in Utah.
Reporting of Actions
1. A licensee must report to the Commissioner:
a. Any administrative action taken against the person in another jurisdiction or by another regulatory agency in this state.
b. Any criminal prosecution taken against the person in any jurisdiction.
2. The re
Electronic Submission
The following must be submitted to the Department electronically through SIRCON or NIPR:
1. Individual and agency license applications for:
a. A new license or line of authority.
b. A license renewal.
c. A license reinstatement.
2. Appointments and termin
License Termination, Suspension, or Revocation
1. After a hearing, the Commissioner may revoke, suspend, place on probation, limit, or refuse to renew a license or Certificate of Authority:
a. Of a foreign or alien insurer that violates insurance code or an order of the Commissioner.
b. If the license
a. Problems in Obtaining or Keeping a License:
1) Not qualified.
2) Willfully misrepresent or conceal a material fact in a licensing application.
3) Obtains or tries to obtain a license through misrepresentation or fraud.
4) Has a license denied, suspended, or revoked.
5) Cheats on a licensing examina
b. Moral Turpitude and Lack of Character:
1) Willfully misrepresents the terms of an insurance contract or application.
2) Commits dishonest, fraudulent, or unfair practices in the insurance business.
3) A felony conviction.
4) Uses fraudulent, coercive, or dishonest practices.
5) Shows a lack of
c. Mishandling of Funds:
1) Is insolvent or subject to receivership.
2) Misappropriates, converts, or unlawfully withholds money received while transacting insurance business.
3) Fails or refuses, on demand, to pay any money to a person who is entitled to it, including failing to
d. Violating Regulations:
1) Willfully violates regulations or orders of the Commissioner, any insurance law, or federal law.
2) Affiliates with a producer transacting business in Utah without a license.
3) Refuses to be examined.
4) Engages in conduct that endangers the interest
Probation
1. The Commissioner may place a licensee on probation for up to 24 months:
a. After a hearing for any circumstances that justify suspension.
b. At the issuance of a new license, if the licensee violates federal law or is involved in an activity that is gr
Monetary Forfeiture (Fines)
1. A person violating an insurance law must pay the Department twice the amount of any profit gained from the violation, in addition to any other penalty.
2. The Commissioner may order a producer or consultant who violates insurance law to pay up to $2,50
State Regulation
Commissioner's General Duties and Powers
1. The Commissioner is responsible for organizing, administering, and carrying out the general duties and broad powers of the Utah Insurance Department.
2. The Commissioner may:
a. Make rules and issue orders to enforce insurance laws.
b. Hold meetings to
Unfair Discrimination
An insurer may not charge different rates to persons of the same class and life expectancy (life insurance), or of the same class and hazard (health insurance), unless the difference is based on sound actuarial principles.
Rates
1. Rates may not be excessive, inadequate, or unfairly discriminatory. The Commissioner considers an insurer's total loss experience, not just its loss experience in Utah, when determining whether rates are excessive, inadequate, or unfairly discriminator
Policy Forms
1. Forms (except for surplus lines) must be filed, with a filing fee, with the Commissioner before use.
2. The Commission may disapprove, or withdraw approval of, any form that:
a. Is unfair, encourages misrepresentation, is not in the public interest, or
Producer Appointment
Each insurer must file a Certificate of Appointment with the Commissioner for any agent or organization authorized to conduct business on the insurer's behalf. The insurer must keep the returned copy of the Certificate of Appointment for at least 3 years
Termination of Appointment
1. Each insurer must notify the Commissioner within 10 days after terminating the appointment of any agent or organization. The notice must state the cause for termination.
2. The insurer must keep a copy of the termination notice for at least 3 years.
3.
Unfair Claim Settlement Practices
1. The following acts are considered unfair claim settlement practices in Utah:
a. Unethical Conduct
1) Misrepresenting pertinent facts or policy provisions relating to coverage at issue.
2) Not trying, in good faith, to settle a claim for which liability has become reasonably clear.
3) Trying to settle a claim on the basis of an altered application.
4)
b. Poor Communication
1) Failing to respond to a claim or a communication about a claim within 15 days of receipt.
2) Failing to explain a claim denial or settlement.
3) Making claim payments to insureds without, upon request, indicating the coverage under which payment is mad
Boycott, Coercion, or Intimidation
A person may not enter into an agreement with the purpose of committing an act of boycott, coercion, or intimidation, which would result in restraint or monopoly in the insurance business or contract replacement.
c. Mishandling of Funds
1) Compelling insureds to sue by offering less than the amounts due.
2) Low-Balling
Trying to settle a claim for less than a person is entitled.
3) Deducting premiums due under one policy from a payment under another policy, without the insured's consent.
4) Refusing to pay expenses that result from a delay in settlement or payment.
5) F
d. Technical Evasion of Responsibility
1) Having a policy or practice of appealing arbitration awards.
2) Failing to settle a first party claim because responsibility should be assumed by others (unless permitted under the policy).
3) Failing to use reasonable standards for prompt claim invest
Producer Regulation
Fiduciary and Trust Account Responsibilities
1. In Utah, producers may not commingle premiums with any other funds.
2. If producers do not remit payments to principals and insureds by the close of the next business day following receipt, they must deposit such in a premium account approved by the Co
Place of Business/Records Maintenance
1. All licensees shall register with the commissioner the address, email address and telephone numbers of their principal place of business.
2. Every licensee shall, at the business address registered with the Commissioner, keep separate and distinct reco
Controlled Business
1. Controlled business means insurance issued on one's own property or the property of relatives by blood or marriage. For a business entity, controlled business means insurance issued on the life, person, or property of partners, shareholders, directors,
Shared Commissions
1. A commission for selling insurance may not be paid to a person other than a licensed insurance producer. However, the payment of renewal or other deferred commissions to a person who formerly held a license is permissible.
2. An insurer or a producer m
Unfair Marketing Practices
1. It is an unfair marketing practice for a producer or a consultant agency:
a. To use a name that is misleading, can be mistaken for another licensee's name, or falsely implies a connection with another organization.
b. To fail to disclose the nature of
Misrepresentation
1. An insurer may not be bound by an agent's representation of a contract.
2. No licensee may communicate false or misleading information about a contract, an insurer, or a licensee, including:
a. Assuring the payment of future dividends or refunds of unu
False Advertising
A licensee may not use:
1. Any business name, slogan, emblem, or related device that is misleading, or so similar as that of another insurer or licensee as to mislead.
2. Promotional material that would mislead a person to believe that the insurance is as
Illegal Inducement
A licensee may not induce a person to enter into a contract. A promotional gift is not an inducement if the recipient is not required to perform any part of an application process.
Examination of Records
1. The Commissioner may request any records of an insurer whenever such records are deemed necessary for the enforcement of state statutes or to help the Commissioner in the performance of his duties.
2. The Commissioner may not remove any records from an
Privacy of Consumer Information Regulation
Utah has passed state laws which apply in addition to, or in some situations supercede, the requirements of the Fair Credit Reporting Act.
1. Licensees must notify persons about privacy practices at least once every 12 months.
2. A privacy notice must exp
Insurance Fraud Regulation
1. It is fraudulent:
a. To make a material misstatement about a contract, claims handling, or torte law, or to the Department, or on an application.
b. To knowingly benefit from fraud.
c. To fail to forward a premium to an insurer.
d. To obtain fees under
Personal Liability for Unpaid Claims
1. An insurance contract entered into in violation of state insurance laws is unenforceable by, but enforceable against, the insurer. In an action against the insurer on the contract, the insured is bound by the terms of the contract.
2. An insurance poli