Alien insurer: means an insurer domiciled outside the United States. See Utah Code 31A-1-301
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Bail: Security given for the release of a criminal defendant or witness from legal custody (usually in the form of money) to secure his/her appearance on the day and time appointed.
board of directors: means the group of persons with responsibility over, or management of, a corporation, however designated. See Utah Code 31A-1-301
Certificate: means evidence of insurance given to:
Domestic insurer: means an insurer organized under the laws of this state. See Utah Code 31A-1-301
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
Insurance: includes :
(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;
(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
(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
License: includes a certificate of authority issued to an insurer. See Utah Code 31A-1-301
for property or casualty insurance, that cost of insurance per exposure unit either expressed as:
(A)
a single number; or
(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:
Rate service organization: means a person who assists an insurer in rate making or filing by:
(i)
collecting, compiling, and furnishing loss or expense statistics;
(ii)
recommending, making, or filing rates or supplementary rate information; or
(iii)
advising about rate questions, except as an attorney giving legal advice. See Utah Code 31A-1-301
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
United States: includes each state, district, and territory of the United States of America. See Utah Code 68-3-12.5
When the commissioner determines that information is needed about a matter related to the enforcement of this title, the commissioner may examine the affairs and condition of:
(i)
a licensee under this title;
(ii)
an applicant for a license under this title;
(iii)
a person or organization of persons doing or in process of organizing to do an insurance business in this state; or
(iv)
a person who is not, but is required to be, licensed under this title.
(b)
When reasonably necessary for an examination under Subsection (1)(a), the commissioner may examine:
(i)
so far as it relates to the examinee, an account, record, document, or evidence of a transaction of:
(A)
the insurer or other licensee;
(B)
an officer or other person who has executive authority over or is in charge of any segment of the examinee’s affairs; or
(C)
an affiliate of the examinee; or
(ii)
a third party model or product used by the examinee.
(c)
(i)
On demand, an examinee under Subsection (1)(a) shall make available to the commissioner for examination:
(A)
the examinee’s own account, record, file, document, or evidence of a transaction; and
(B)
to the extent reasonably necessary for an examination, an account, record, file, document, or evidence of a transaction of a person described under Subsection (1)(b).
(ii)
Except as provided in Subsection (1)(c)(iii), failure to make an item described in Subsection (1)(c)(i) available is concealment of records under Subsection 31A-27a-207(1)(e).
(iii)
If an examinee is unable to obtain an account, record, file, document, or evidence of a transaction from a person described under Subsection (1)(b), that failure is not concealment of records if the examinee immediately terminates the relationship with the other person.
(d)
(i)
The commissioner or an examiner may not remove an account, record, file, document, evidence of a transaction, or other property of an examinee from the examinee’s offices unless:
(A)
the examinee consents in writing; or
(B)
a court grants permission.
(ii)
The commissioner may make and remove a copy or abstract of the following described in Subsection (1)(d)(i):
(A)
an account;
(B)
a record;
(C)
a file;
(D)
a document;
(E)
evidence of a transaction; or
(F)
other property.
(2)
(a)
Subject to the other provisions of this section, the commissioner shall examine as needed and as otherwise provided by law:
(i)
every insurer, both domestic and nondomestic;
(ii)
every licensed rate service organization; and
(iii)
any other licensee.
(b)
The commissioner shall examine an insurer, both domestic and nondomestic, no less frequently than once every five years, but the commissioner may use in lieu an examination under Subsection (4) to satisfy this requirement.
(c)
The commissioner shall revoke the certificate of authority of an insurer or the license of a rate service organization that has not been examined, or submitted an acceptable in lieu report under Subsection (4), within the past five years.
(d)
(i)
Any 25 persons who are policyholders, shareholders, or creditors of a domestic insurer may by verified petition demand a hearing under Section 31A-2-301 to determine whether the commissioner should conduct an unscheduled examination of the insurer.
(ii)
Persons demanding the hearing under this Subsection (2)(d) shall be given an opportunity in the hearing to present evidence that an examination of the insurer is necessary.
(iii)
If the evidence justifies an examination, the commissioner shall order an examination.
(e)
(i)
If the board of directors of a domestic insurer requests that the commissioner examine the insurer, the commissioner shall examine the insurer as soon as reasonably possible.
(ii)
If the examination requested under this Subsection (2)(e) is conducted within two years after completion of a comprehensive examination by the commissioner, costs of the requested examination may not be deducted from premium taxes under Section 59-9-102 unless the commissioner’s order specifically provides for the deduction.
(f)
A bail bond surety company, as defined in Section 31A-35-102, is exempt from:
(i)
the five-year examination requirement in Subsection (2)(b);
(ii)
the revocation under Subsection (2)(c); and
(iii)
Subsections (2)(d) and (2)(e).
(3)
(a)
The commissioner may order an independent audit or examination by one or more technical experts, including a certified public accountant or actuary:
(i)
in lieu of all or part of an examination under Subsection (1) or (2); or
(ii)
in addition to an examination under Subsection (1) or (2).
(b)
An audit or evaluation under this Subsection (3) is subject to Subsection (5), Section 31A-2-204, and Subsection 31A-2-205(4).
(4)
(a)
In lieu of all or a part of an examination under this section, the commissioner may accept the report of an examination made by:
(i)
the insurance department of another state; or
(ii)
another government agency in:
(A)
this state;
(B)
the federal government; or
(C)
another state.
(b)
An examination by the commissioner under Subsection (1) or (2) or accepted by the commissioner under this Subsection (4) may use:
(i)
an audit completed by a certified public accountant; or
(ii)
an actuarial evaluation made by an actuary approved by the commissioner.
(5)
(a)
An examination may be comprehensive or limited with respect to the examinee’s affairs and condition. The commissioner shall determine the nature and scope of an examination, taking into account all relevant factors, including:
(i)
the length of time the examinee has been licensed in this state;
(ii)
the nature of the business being examined;
(iii)
the nature of the accounting or other records available;
(iv)
one or more reports from:
(A)
independent auditors; and
(B)
self-certification entities; and
(v)
the nature of examinations performed elsewhere.
(b)
The examination of an alien insurer is limited to one or more insurance transactions and assets in the United States, unless the commissioner orders otherwise after finding that extraordinary circumstances necessitate a broader examination.
(6)
To effectively administer this section, the commissioner:
(a)
shall:
(i)
maintain one or more effective financial condition and market regulation surveillance systems including:
(A)
financial and market analysis; and
(B)
a review of insurance regulatory information system reports;
(ii)
employ a priority scheduling method that focuses on insurers and other licensees most in need of examination; and
(iii)
use examination management techniques similar to those outlined in the Financial Condition Examination Handbook of the National Association of Insurance Commissioners; and
a financial condition and market regulation surveillance system; and
(ii)
annual financial reporting requirements similar to those outlined in the Annual Financial Reporting Model Regulation of the National Association of Insurance Commissioners.
