31A-22-505.  Association groups.

(1)  An insurer may issue a group insurance policy offering life insurance to an association group if:

Terms Used In Utah Code 31A-22-505

  • Certificate: means evidence of insurance given to:
(a) an insured under a group insurance policy; or
(b) a third party. See Utah Code 31A-1-301
  • Group insurance policy: means a policy covering a group of persons that is issued:
    (i) to a policyholder on behalf of the group; and
    (ii) for the benefit of a member of the group who is selected under a procedure defined in:
    (A) the policy; or
    (B) an agreement that is collateral to the policy. See Utah Code 31A-1-301
  • Individual: means a natural person. See Utah Code 31A-1-301
  • 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
  • Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy and includes:
    (i) a policyholder;
    (ii) a subscriber;
    (iii) a member; and
    (iv) a beneficiary. See Utah Code 31A-1-301
  • Life insurance: means :
    (i) insurance on a human life; and
    (ii) insurance pertaining to or connected with human life. See Utah Code 31A-1-301
  • Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
  • Policy: includes a service contract issued by:
    (i) a motor club under Chapter 11, Motor Clubs;
    (ii) a service contract provided under Chapter 6a, Service Contracts; and
    (iii) a corporation licensed under:
    (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
    (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans. See Utah Code 31A-1-301
  • Policyholder: means a person who controls a policy, binder, or oral contract by ownership, premium payment, or otherwise. See Utah Code 31A-1-301
  • Premium: includes , however designated:
    (i) an assessment;
    (ii) a membership fee;
    (iii) a required contribution; or
    (iv) monetary consideration. See Utah Code 31A-1-301
    (a)  the commissioner authorizes the association group;

    (b)  the benefits of the group insurance policy are reasonable in relation to the premiums charged for the policy; and

    (c)  the association group:

    (i)  purchases insurance on a group basis on behalf of the association group’s members;

    (ii)  is formed and maintained for a shared substantially common purpose that:

    (A)  is not related to obtaining insurance; and

    (B)  is the same profession, trade, or occupation or has some common economic, representation of interest, or genuine organizational relationship;

    (iii)  has at least 100 members;

    (iv)  has been actively in existence for at least five years;

    (v)  has a constitution and bylaws that require:

    (A)  the association to hold regular meetings not less than annually to further the purpose of the association’s members; and

    (B)  members of the association to have voting privileges and representation on any governing board or committee;

    (vi)  does not condition membership in the association group on any health status-related factor;

    (vii)  makes insurance offered through the association group available exclusively to a member of the association; and

    (viii)  only offers insurance through the association group in connection with a member of the association group.
  • (2)  A group insurance policy offering life insurance that an insurer issues to an association group may insure members and employees of the association, employees of the members, one or more of the preceding entities, or all of any classes of these named entities for the benefit of persons other than the employees’ employer, or any officials, representatives, trustees, or agents of the employer or association.

    (3) 

    (a)  The following shall pay the premium under a group insurance policy offering life insurance that an insurer issues to an association group:

    (i)  the policyholder from funds contributed by the association;

    (ii)  employer members, from funds contributed by the covered persons; or

    (iii)  from any combination of Subsections (3)(a)(i) and (ii).

    (b)  Except as provided under Section 31A-22-512, a policy on which no part of the premium is contributed by the covered persons, specifically for their insurance, is required to insure all eligible persons.

    (4) 

    (a)  An association group that meets the requirements described under Subsection (1) shall disclose the following to each insured member:

    (i)  each cost related to joining and maintaining membership in the association;

    (ii)  that membership fees or dues are in addition to the policy premium;

    (iii)  that the association group holds the master group insurance policy;

    (iv)  that the association group and insurer determine the amount of the premium charged and the terms and conditions of coverage under the group insurance policy; and

    (v)  that the association group policyholder and insurer may change the premium and terms and conditions of coverage under the insurance policy:

    (A)  through agreement; and

    (B)  without the consent of the individual certificate holder.

    (b)  If an insurer collects membership fees or dues on behalf of an association, the insurer shall disclose to each member of the association that the insurer is billing and collecting membership fees and dues on behalf of the association.

    Amended by Chapter 252, 2021 General Session