Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
Director: means a member of the board of directors of a corporation. See Utah Code 31A-1-301
Employee: means :
(a)
an individual employed by an employer; or
(b)
an individual who meets the requirements of Subsection (53)(b). 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.
Filed: means that a filing is:
(i)
submitted to the department as required by and in accordance with applicable statute, rule, or filing order;
(ii)
received by the department within the time period provided in applicable statute, rule, or filing order; and
(iii)
accompanied by the appropriate fee in accordance with:
a similar mechanism in another state that is created for the payment of claims or continuation of policy obligations of a financially impaired or insolvent insurer. See Utah Code 31A-27a-102
Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
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:
is doing, has done, purports to do, or is licensed to do the business of insurance;
(b)
is or has been subject to the authority of, or to rehabilitation, liquidation, reorganization, supervision, or conservation by an insurance commissioner; or
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
receiver: means the commissioner or the commissioner's designee, including a rehabilitator, liquidator, or ancillary receiver. See Utah Code 31A-27a-102
receivership: means a rehabilitation, liquidation, or ancillary receivership. See Utah Code 31A-27a-102
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.
State: means a state, district, or territory of the United States. See Utah Code 31A-27a-102
(a)
An allegation by the receiver of improper or fraudulent conduct against a person may not be the basis of a defense to the enforcement of a contractual obligation owed to the insurer by a third party.
(b)
Notwithstanding Subsection (1)(a), a third party described in this Subsection (1) is not barred by this section from seeking to establish independently as a defense that the conduct is materially and substantially related to the contractual obligation for which enforcement is sought.
(2)
(a)
Subject to Subsection (2)(b), a prior wrongful or negligent action of any present or former receiver, receiver’s assistant, receiver’s contractor, officer, manager, director, trustee, owner, employee, or agent of the insurer may not be asserted as a defense to a claim by the receiver:
(i)
under a theory of:
(A)
estoppel;
(B)
comparative fault;
(C)
intervening cause;
(D)
proximate cause;
(E)
reliance; or
(F)
mitigation of damages; or
(ii)
otherwise.
(b)
Notwithstanding Subsection (2)(a):
(i)
the affirmative defense of fraud in the inducement may be asserted against the receiver in a claim based on a contract; and
(ii)
a principal under a surety bond or a surety undertaking is entitled to credit against any reimbursement obligation to the receiver for the value of any property pledged to secure the reimbursement obligation to the extent that:
(A)
the receiver has possession or control of the property; or
(B)
the insurer or its agents misappropriated, including commingling, the property.
(c)
Evidence of fraud in the inducement is admissible only if it is contained in the records of the insurer.
(3)
Action or inaction by an insurance regulatory authority may not be asserted as a defense to a claim by the receiver.
(4)
(a)
Subject to Subsection (4)(b), a judgment or order entered against an insured or the insurer in contravention of a stay or injunction under this chapter, or at any time by default or collusion, may not be considered as evidence of liability or of the quantum of damages in adjudicating claims filed in the estate arising out of the subject matter of the judgment or order.
(b)
Subsection (4)(a) does not apply to an affected guaranty association‘s claim for amounts paid on a settlement or judgment in pursuit of the affected guaranty association‘s statutory obligations.
(5)
(a)
Subject to Subsection (5)(b), the following do not affect the amount that a receiver may recover from a third party, regardless of any provision in an agreement to the contrary:
(i)
the insurer’s insolvency; or
(ii)
the insurer’s or receiver’s failure to pay all or a portion of an amount or a claim to the third party.
(b)
If an agreement between the insurer and a third party requires a payment by the insurer before the insurer may recover from the third party, the amount the receiver may recover from the third party under Subsection (5)(a) is limited to an amount equal to the greater of:
(i)
the amount paid by the insurer or by another person on behalf of the insurer to the third party; or
(ii)
the amount allowed as a claim for payment under:
(A)
an approved report described in Section 31A-27a-608;
(B)
an order of the receivership court; or
(C)
a plan of rehabilitation.
(6)
The receiver may not be considered a governmental entity for the purposes of any state law awarding fees to a litigant who prevails against a governmental entity.
