HB 23: Insurance Modifications - Utah

Amended 2/26/2025 12:33:000 → Substitute #1 · 10 edits

MAJOR

This bill updates Utah's insurance code to clarify exemptions for public agencies, align preexisting condition rules with federal standards, simplify non-English policy compliance, and adjust captive insurance capital requirements. It also strengthens enforcement by requiring licensees to report judgments within 60 days and adds new reporting requirements for agency title insurance producers.

Scope change

The bill clarifies that public agency insurance mutuals and reserve funds are exempt from the Insurance Code except for surplus lines tax provisions, and expands the definition of exempt activities to include certain legal services and health care sharing ministries.

ELIGIBILITY

Clarified that public agency insurance mutuals and reserve funds are exempt from the Insurance Code, except for surplus lines tax provisions in Sections 31A-3-301 and 31A-3-303.

REQUIREMENT

Removed the requirement for insurers to file certification that non-English policies comply with relevant laws, simplifying compliance for multilingual policy documents.

Reduced minimum capital requirement for association captive insurance companies from $750,000 to $500,000.

Changed reporting period for agency title insurance producers from annual to biennial, reducing administrative burden.

Modified small employer stop-loss insurance contract requirements to regulate which small employers stop-loss insurers may contract with and provides transition period for existing contracts.

Allowed captive insurance companies to be formed as not-for-profit organizations, expanding formation options for these entities.

Clarified that officers of a captive insurance company must be separate individuals, preventing concentration of authority in single persons.

ENFORCEMENT

Added requirement that licensees must report to the commissioner if they fail to pay a final judgment within 60 days, with additional reporting requirements for those against whom judgments have been entered.

DEFINITION

Added definition of 'association' as a legal association of two or more persons exposed to similar liability due to related business trade, products, services, premises, or operations.

FISCAL

Modified Captive Insurance Restricted Account provisions to adjust excess revenue thresholds from $1,600,000 to $1,650,000 for fiscal year 2023-2024 and subsequent years.

Amended 2/10/2025 15:02:659 → Amended 2/26/2025 12:33:000 · 10 edits

MAJOR

This bill amends Utah's Insurance Code to clarify exemptions for public agency insurance mutuals, remove the requirement for insurers to file certifications for non-English policies, align preexisting condition rules with federal standards, and update captive insurance capital requirements. The changes aim to reduce regulatory burdens while maintaining consumer protections and improving clarity in insurance licensing and enforcement procedures.

Scope change

The bill expands exemptions for public agency insurance mutuals and reserve funds from the Insurance Code, and clarifies that certain legal service arrangements and limited legal assistance are not subject to insurance regulation.

ELIGIBILITY

Clarified that public agency insurance mutuals and reserve funds are exempt from the Insurance Code, with specific exceptions for health insurance requiring third-party administrators or admitted insurers.

REQUIREMENT

Removed the requirement for insurers to file a certification that non-English policies comply with relevant laws, though policies must still include English versions and disclaimers.

Aligned preexisting condition limitations in health insurance with federal rules, preventing cancellation based on certain claims within 60 days of policy inception.

Reduced the minimum capital requirement for association captive insurance companies from $750,000 to $500,000.

Added requirement that officers of a captive insurance company must be separate individuals to prevent conflicts of interest.

Modified requirements for sponsored captive insurance companies to allow formation as not-for-profit organizations and clarified investment restrictions.

FISCAL

Updated the Captive Insurance Restricted Account thresholds, increasing the excess revenue threshold to $1,650,000 for fiscal year 2023-2024 and subsequent years.

ENFORCEMENT

Clarified that the commissioner may take action against licensees who fail to pay final judgments within 60 days and added reporting requirements for such judgments.

TIMELINE

Changed the reporting period for agency title insurance producers from February 1 to May 1 of each year.

DEFINITION

Added definition for 'dual licensed title licensee' to clarify licensing restrictions for title insurance producers holding other real estate or mortgage licenses.

Amended Excerpts 2/26/2025 12:33:000 → Amended 2/10/2025 15:02:659 · 7 edits

MODERATE

This bill transforms a previous House amendment into a formal substitute bill for HB 23, shifting the focus from budgetary surplus treatment to comprehensive insurance law amendments. The document now includes detailed provisions covering insurance definitions, licensing requirements, captive insurance rules, and consumer protections rather than the original financial appropriation language.

Scope change

The bill's scope expanded from a narrow budgetary provision to broad insurance regulation covering definitions, licensing, captive insurance companies, stop-loss contracts, and enforcement mechanisms.

SCOPE

Removed language about treating legislative appropriation excesses as free revenue and replaced it with comprehensive insurance modifications affecting multiple Utah Code sections.

DEFINITION

Added new definitions and clarified circumstances under which public agency insurance mutuals and reserve funds are exempt from the Insurance Code.

REQUIREMENT

Introduced additional reporting requirements for licensees with judgments against them and changed reporting periods for agency title insurance producers.

Added transition period provisions for existing small employer stop-loss insurance contracts and modified requirements for small employer stop-loss insurance.

ELIGIBILITY

Allows captive insurance companies to be formed as not-for-profit organizations and clarifies that officers must be separate individuals.

ENFORCEMENT

Amended grounds under which the commissioner may revoke a captive insurance company's certificate of authority and clarified actions against licensees failing to pay judgments within 60 days.

TECHNICAL

Includes technical and conforming changes to align state law with federal rules relating to preexisting condition limitations and clarifies that insurers do not need to file non-English policy certifications.

Amended Excerpts 2/10/2025 15:02:659 → Amended Excerpts 2/26/2025 12:33:000 · 4 edits

MODERATE

The bill was revised from a House Floor version to a House Committee version with significant changes to financial thresholds and effective dates. The amendments adjust surplus lines tax applicability, modify free revenue treatment thresholds for different fiscal years, and update the 'applicable percentage' schedule for insurance-related calculations. These changes affect how public agencies and governmental entities are treated under the surplus lines tax and how excess legislative appropriations are classified.

Scope change

The bill's scope shifted from House Floor amendments to House Committee amendments, indicating a procedural stage change in the legislative process. The substantive scope remains focused on insurance tax provisions and public agency financial classifications.

DEFINITION

Changed the definition of 'public agency insurance mutual or reserve fund' to clarify its status as a governmental entity.

FISCAL

Adjusted the free revenue threshold for fiscal years 2018-2019 and subsequent years from $1,600,000 to $1,650,000 for fiscal year 2023-2024 and later, with a new threshold of $1,668,500 for fiscal year 2026 and beyond.

TIMELINE

Updated the effective dates for the 'applicable percentage' schedule, shifting all dates from February to January and extending the timeline through December 2028-2029.

REQUIREMENT

Revised the percentage rates applied to different fiscal year periods, with specific adjustments to the 2024-2028 schedule.

Enrolled → Amended Excerpts 2/10/2025 15:02:659 · 10 edits

MAJOR

This bill amends Utah's insurance code to modernize regulations on captive insurance companies, clarify licensing requirements, and update administrative procedures. Key changes include allowing captive insurance companies to be formed as not-for-profit organizations, reducing capital requirements for association captives from $750,000 to $500,000, clarifying exemptions for public agency insurance mutuals, and updating reporting deadlines for title insurance producers. The bill also aligns preexisting condition limitations with federal rules and adds new grounds for license revocation.

Scope change

The bill expands the scope of captive insurance formation options and modifies capital requirements for specific captive types, while clarifying the applicability of certain exemptions to public agencies.

ELIGIBILITY

Allows captive insurance companies to be formed as not-for-profit organizations, expanding formation options beyond corporations and limited liability companies.

Aligns state law with federal rules relating to preexisting condition limitations in insurance policies.

REQUIREMENT

Reduces minimum capital requirement for association captive insurance companies from $750,000 to $500,000.

Clarifies that officers of a captive insurance company must be separate individuals, preventing the same person from holding multiple officer positions.

Changes reporting period for agency title insurance producers from February 1 to May 1 of each year.

Clarifies that insurers do not need to file certification that non-English policies comply with relevant laws.

DEFINITION

Updates definitions related to public agency insurance mutuals and reserve funds to clarify their governmental entity status and exemptions.

ENFORCEMENT

Adds new grounds for license revocation including failure to pay final judgments within 60 days and additional reporting requirements for licensees with judgments against them.

Modifies requirements for sponsored captive insurance companies' business operations and reserve funding.

TIMELINE

Updates applicable percentage thresholds for agency title insurance producers' capital requirements for fiscal years 2024-2029.

Substitute #1 → Substitute #2 · 10 edits

MAJOR

This bill updates Utah's insurance laws to modernize regulations for captive insurance companies, clarify licensing requirements, and improve consumer protections. Key changes include reducing capital requirements for certain captive insurers, allowing captive companies to be formed as not-for-profit organizations, clarifying exemptions for public agencies, and strengthening enforcement against licensees who fail to pay court judgments. The bill also updates reporting requirements for title insurance producers and adjusts preexisting condition limitations to align with federal rules.

Scope change

The bill expands eligibility for captive insurance companies by allowing them to be formed as not-for-profit organizations and reduces minimum capital requirements for association captive insurance companies from $750,000 to $500,000. It also clarifies that public agency insurance mutuals and reserve funds are exempt from the Insurance Code with specific exceptions for health insurance.

REQUIREMENT

Reduced minimum capital requirement for association captive insurance companies from $750,000 to $500,000

Added additional reporting requirements for licensees against whom judgments have been entered

Changed reporting period for agency title insurance producers to submit reports before May 1 of each year

Aligned state law with federal rules relating to preexisting condition limitations

ELIGIBILITY

Allows captive insurance companies to be formed as not-for-profit organizations

Clarified exemptions for public agency insurance mutuals and reserve funds from Insurance Code requirements

DEFINITION

Clarified that officers of a captive insurance company must be separate individuals

ENFORCEMENT

Added authority for commissioner to take action against licensees who fail to pay final judgments within 60 days

FISCAL

Modified requirements for money appropriated from the Captive Insurance Restricted Account

TECHNICAL

Made technical and conforming changes throughout the insurance code sections

Introduced → Enrolled · 9 edits · Mar 25, 2025

MAJOR

This bill amends Utah's insurance code to clarify exemptions for public agencies, update licensing and reporting requirements, align preexisting condition rules with federal standards, and modify captive insurance regulations. The changes aim to improve regulatory clarity, reduce unnecessary burdens on insurers and policyholders, and ensure state laws align with federal requirements.

Scope change

The bill expands exemptions for public agency insurance mutuals and reserve funds, clarifies when certain insurance transactions are exempt from regulation, and adds new provisions for small employer stop-loss insurance contracts.

ELIGIBILITY

Clarifies that public agency insurance mutuals and reserve funds are exempt from the Insurance Code under specific circumstances.

REQUIREMENT

Removes the requirement for insurers to file certifications that non-English policies comply with relevant laws.

Aligns state preexisting condition limitations with federal rules, extending coverage periods and limiting exclusions.

Reduces minimum capital requirements for association captive insurance companies from $750,000 to $500,000.

Allows captive insurance companies to be formed as not-for-profit organizations and requires officers to be separate individuals.

Modifies requirements for sponsored captive insurance companies, including changes to how protected cells are managed and reported.

ENFORCEMENT

Allows the commissioner to take action against licensees who fail to pay final judgments within 60 days and adds reporting requirements for such licensees.

TIMELINE

Adds a transition period for existing small employer stop-loss insurance contracts and regulates which small employers can enter stop-loss contracts.

TECHNICAL

Makes technical and conforming changes throughout the insurance code sections.

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