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
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
Process: means a writ or summons issued in the course of a judicial proceeding. See Utah Code 68-3-12.5
Rate: means :
(i)
the cost of a given unit of insurance; or
(ii)
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:
Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(2)
In addition to the grounds for prohibiting use of a form under Subsection 31A-21-201(3), it is a ground to prohibit the use of a form that the benefits provided in the form are not reasonable in relation to the premium charge.
(3)
(a)
In ascertaining whether the benefits are reasonable in relation to the premium charged, the commissioner shall consider:
(i)
the mortality cost of the life insurance;
(ii)
the morbidity cost of the accident and health insurance; and
(iii)
the reserves set up for the payment of claims unreported or in the process of settlement.
(b)
For purposes of this section, benefits are considered reasonable in relation to the premium charged if, given the costs described in this Subsection (3), the premium rate charged develops or may reasonably be expected to develop a loss ratio of:
(i)
not less than 50% for credit life insurance; and
(ii)
not less than 55% for credit accident and health insurance.
(4)
Benefits are considered reasonable in relation to premium charged if the ratio of claims incurred to premium earned during the most recent four-year period at the rates in use produces a loss ratio that is equal to or exceeds the minimum loss ratio standard specified in Subsection (3).
(5)
If the minimum loss ratio test produces a loss ratio that exceeds the minimum loss ratio standard in Subsection (4) by five percentage points or more, the insurer may file for approval and use a rate that is higher than the prima facie rate, if it can be expected that the use of the higher rate will continue to produce a loss ratio for an account to which it is applied that will satisfy the minimum loss ratio test.
(6)
If the minimum loss ratio test produces a loss ratio that is lower than the minimum loss standard in Subsection (4) by five percentage points or more, the commissioner may require that the insurer:
(a)
file an adjusted rate that can be expected to produce a loss ratio that will satisfy the minimum loss ratio test; or
(b)
submit reasons acceptable to the commissioner why the insurer should not be required to file an adjusted rate.
