Utah Code 31A-28-207. Powers and duties of the association
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Terms Used In Utah Code 31A-28-207
- Affiliate: is a s defined in Section 31A-1-301. See Utah Code 31A-28-203
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association account: means the Utah Property and Casualty Insurance Guaranty Association Account created by Section 31A-28-205. See Utah Code 31A-28-203
- board of directors: means the group of persons with responsibility over, or management of, a corporation, however designated. See Utah Code 31A-1-301
- Claimant: means :(3)(a)(i) an insured making a first-party claim; or(3)(a)(ii) a person instituting a liability claim. See Utah Code 31A-28-203
- Covered claim: means an unpaid claim, including an unpaid claim under a personal lines policy for unearned premiums submitted by a claimant, if:
(4)(a)(i) the claim arises out of the coverage;(4)(a)(ii) the claim is within the coverage;(4)(a)(iii) the claim is not in excess of the applicable limits of an insurance policy to which this part applies;(4)(a)(iv) the insurer who issued the policy becomes an insolvent insurer; and(4)(a)(v)(4)(a)(v)(A) the claimant or insured is a resident of this state at the time of the insured event; or(4)(a)(v)(B) the claim is a first-party claim for damage to property that is permanently located in this state. See Utah Code 31A-28-203- Equal: means , with respect to biological sex, of the same value. See Utah Code 68-3-12.5
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Filed: means that a filing is:
(69)(a)(i) submitted to the department as required by and in accordance with applicable statute, rule, or filing order;(69)(a)(ii) received by the department within the time period provided in applicable statute, rule, or filing order; and(69)(a)(iii) accompanied by the appropriate fee in accordance with:(69)(a)(iii)(A) Section31A-3-103 ; or(69)(a)(iii)(B) rule. See Utah Code 31A-1-301- Filing: when used as a noun, means an item required to be filed with the department including:
(70)(a) a policy;(70)(b) a rate;(70)(c) a form;(70)(d) a document;(70)(e) a plan;(70)(f) a manual;(70)(g) an application;(70)(h) a report;(70)(i) a certificate;(70)(j) an endorsement;(70)(k) an actuarial certification;(70)(l) a licensee annual statement;(70)(m) a licensee renewal application;(70)(n) an advertisement;(70)(o) a binder; or(70)(p) an outline of coverage. See Utah Code 31A-1-301- Fraud: Intentional deception resulting in injury to another.
- insolvent: means that:
(95)(a) an insurer is unable to pay the insurer's obligations as the obligations are due;(95)(b) an insurer's total adjusted capital is less than the insurer's mandatory control level RBC under Subsection31A-17-601 (8)(c); or(95)(c) an insurer's admitted assets are less than the insurer's liabilities. See Utah Code 31A-1-301- Insolvent insurer: means a member insurer that is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency. See Utah Code 31A-28-203
- Insurance: includes :
(96)(b)(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;(96)(b)(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(96)(b)(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:
(103)(a)(i) a policyholder;(103)(a)(ii) a subscriber;(103)(a)(iii) a member; and(103)(a)(iv) a beneficiary. See Utah Code 31A-1-301- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Liability insurance: includes :
(112)(b)(i) vehicle liability insurance;(112)(b)(ii) residential dwelling liability insurance; and(112)(b)(iii) making inspection of, and issuing a certificate of inspection upon, an elevator, boiler, machinery, or apparatus of any kind when done in connection with insurance on the elevator, boiler, machinery, or apparatus. See Utah Code 31A-1-301- Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
- Member insurer: means any person who:
(6)(a) writes any kind of insurance to which this part applies under Section 31A-28-202, including the exchange of reciprocal or inter-insurance contracts; and(6)(b) is licensed to transact insurance in this state. See Utah Code 31A-28-203- 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.
- Order: means an order of the commissioner. See Utah Code 31A-1-301
- Person: includes :
(146)(a) an individual;(146)(b) a partnership;(146)(c) a corporation;(146)(d) an incorporated or unincorporated association;(146)(e) a joint stock company;(146)(f) a trust;(146)(g) a limited liability company;(146)(h) a reciprocal;(146)(i) a syndicate; or(146)(j) another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301- Personal lines policy: means an insurance policy issued to an individual that:
(8)(a) insures a motor vehicle used for personal purposes and not used in trade or business; or(8)(b) insures a residential dwelling. See Utah Code 31A-28-203- Policy: includes a service contract issued by:
(150)(b)(i) a motor club under Chapter 11, Motor Clubs;(150)(b)(ii) a service contract provided under Chapter 6a, Service Contracts; and(150)(b)(iii) a corporation licensed under:(150)(b)(iii)(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or(150)(b)(iii)(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:
(156)(b)(i) an assessment;(156)(b)(ii) a membership fee;(156)(b)(iii) a required contribution; or(156)(b)(iv) monetary consideration. See Utah Code 31A-1-301- Property: includes both real and personal property. See Utah Code 68-3-12.5
- Security: means a:
(176)(a)(i) note;(176)(a)(ii) stock;(176)(a)(iii) bond;(176)(a)(iv) debenture;(176)(a)(v) evidence of indebtedness;(176)(a)(vi) certificate of interest or participation in a profit-sharing agreement;(176)(a)(vii) collateral-trust certificate;(176)(a)(viii) preorganization certificate or subscription;(176)(a)(ix) transferable share;(176)(a)(x) investment contract;(176)(a)(xi) voting trust certificate;(176)(a)(xii) certificate of deposit for a security;(176)(a)(xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease;(176)(a)(xiv) commodity contract or commodity option;(176)(a)(xv) certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in Subsections (176)(a)(i) through (xiv); or(176)(a)(xvi) another interest or instrument commonly known as a security. See Utah Code 31A-1-301- 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: 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
(1)(a) The association is obligated on the amount of the covered claims:(1)(a)(i) existing prior to the order of liquidation; and(1)(a)(ii) arising:(1)(a)(ii)(A) within 30 days after the order of liquidation; or(1)(a)(ii)(B)(1)(a)(ii)(B)(I) before the policy expiration date if it is less than 30 days after the order of liquidation; or(1)(a)(ii)(B)(II) before the insured replaces the policy or causes its cancellation, if the insured does so within 30 days of the order of liquidation.(1)(b) The obligation under Subsection (1)(a) includes only that amount of each covered claim that is less than $300,000.(1)(c) A claim under a personal lines policy for unearned premiums shall include only those claims that exceed $100 in amount, subject to a maximum of $10,000 per policy.(1)(d) The association shall pay the full amount of any covered claim arising out of a workers’ compensation policy. The association is not obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises.(1)(e) Any obligation of the association to defend an insured on a covered claim shall cease:(1)(e)(i) upon payment by the association, as part of a settlement releasing the insured; or(1)(e)(ii) on a judgment, of the lesser of:(1)(e)(ii)(A) the association’s covered claim obligation limit; or(1)(e)(ii)(B) the applicable policy limit.(1)(f) The association:(1)(f)(i) is considered as the insurer only to the extent of its obligation on the covered claims, subject to the limitations provided in this part;(1)(f)(ii) has all the rights, duties, and obligations of the insolvent insurer as if the insurer had not yet become insolvent, including the right to pursue and retain salvage and subrogation recoverable on paid covered claim obligations; and(1)(f)(iii) may not be considered the insolvent insurer for any purpose relating to whether the association is subject to personal jurisdiction in the courts of any state.(1)(g)(1)(g)(i) Notwithstanding any other provisions of this part, except in the case of a claim for benefits under workers’ compensation coverage, any obligation of the association to or on behalf of a particular insured and its affiliates on covered claims shall cease when:(1)(g)(i)(A) a total amount of $10,000,000 has been paid to or on behalf of the insured and its affiliates on covered claims by the association or a similar association; and(1)(g)(i)(B) all payments on covered claims arise under one or more policies of a single insolvent insurer.(1)(g)(ii) The association may establish a plan to allocate the amounts payable by the association in a manner the association considers equitable if the association determines that:(1)(g)(ii)(A) there is more than one claimant asserting a covered claim against:(1)(g)(ii)(A)(I) the association;(1)(g)(ii)(A)(II) a similar association; or(1)(g)(ii)(A)(III) a property or casualty insurance security fund in another state; and(1)(g)(ii)(B) all claims arise under the policy or policies of a single insolvent insurer.(1)(h) The association shall assess member insurers amounts necessary to pay:(1)(h)(i) the obligations of the association under Subsection (1)(a), as limited by Subsections (1)(e) through (g), subsequent to the liquidation of an insolvent insurer;(1)(h)(ii) the expenses of handling covered claims subsequent to the liquidation of an insolvent insurer;(1)(h)(iii) the cost of examinations under Section 31A-28-214; and(1)(h)(iv) other expenses authorized by this part.(1)(i)(1)(i)(i) The association shall:(1)(i)(i)(A) investigate claims brought against the association; and(1)(i)(i)(B) adjust, compromise, settle, and pay covered claims to the extent of the association’s obligation and deny all other claims.(1)(i)(ii) The association is not bound by a settlement, release, compromise, waiver, or judgment executed or entered into by the insolvent insurer:(1)(i)(ii)(A) less than 12 months before the entry of an order of liquidation; or(1)(i)(ii)(B) more than 12 months before the entry of an order of liquidation if the settlement, release, compromise, waiver, or judgment is:(1)(i)(ii)(B)(I) based on a claim that is not a covered claim; or(1)(i)(ii)(B)(II) the result of fraud, collusion, default, or failure to defend.(1)(i)(iii) The association may assert all defenses available including defenses applicable to determining and enforcing the association’s statutory rights and obligations to a claim.(1)(i)(iv) The association may appoint and direct legal counsel retained under a liability insurance policy for the defense of a covered claim.(1)(j)(1)(j)(i) The association shall handle claims through:(1)(j)(i)(A) its employees;(1)(j)(i)(B) one or more insurers; or(1)(j)(i)(C) other persons designated as servicing facilities.(1)(j)(ii) Designation of a servicing facility is subject to the approval of the commissioner, but this designation may be declined by a member insurer.(1)(k) The association shall:(1)(k)(i) reimburse each servicing facility for:(1)(k)(i)(A) obligations of the association paid by the facility; and(1)(k)(i)(B) expenses incurred by the facility while handling claims on behalf of the association; and(1)(k)(ii) pay the other expenses of the association as authorized by this title.(2) The association may:(2)(a) employ or retain the persons, including private legal counsel, necessary to handle claims and perform other duties of the association;(2)(b) borrow funds necessary to implement the purposes of this part in accord with the plan of operation;(2)(c) sue or be sued;(2)(d) negotiate and become a party to the contracts necessary to carry out the purpose of this part;(2)(e) perform any other acts necessary or proper to accomplish the purposes of this chapter; or(2)(f) refund to the member insurers, in proportion to the contribution of each member insurer to the association account, the amount that the assets of the account exceed the liabilities, if, at the end of any calendar year, the board of directors finds that:(2)(f)(i) the assets of the association in the association account exceed the liabilities as estimated by the board of directors for the coming year; and(2)(f)(ii) the excess assets are not needed for other purposes of this part.(3) For a refund due to a member insurer for an assessment that has been offset against premium taxes, the association may pay the amount of the refund directly to the State Tax Commission.(4) The courts of the state shall have exclusive jurisdiction over all actions brought against the association that relate to or arise out of this part.(5)(5)(a) Any person recovering under this part is considered to have assigned that person’s rights under the policy to the association to the extent of that person’s recovery from the association.(5)(b) Every insured or claimant seeking the protection of this chapter shall cooperate with the association to the same extent the person would have been required to cooperate with the insolvent insurer.(5)(c) Except as provided in Subsection (5)(e), the association has no cause of action against the insured of the insolvent insurer for any sums the association has paid out except those causes of action the insolvent insurer would have had if the sums had been paid by the insolvent insurer.(5)(d) When an insolvent insurer operates on a plan with assessment liability, payments of claims of the association do not reduce the liability for unpaid assessments of the insurer to:(5)(d)(i) the receiver;(5)(d)(ii) liquidator; or(5)(d)(iii) statutory successor.(5)(e) The association may recover from the following persons the amount of any “covered claim” paid on behalf of that person pursuant to this part:(5)(e)(i) any insured whose:(5)(e)(i)(A) net worth on December 31 of the year next preceding the date the insurer becomes insolvent, exceeds $25,000,000; and(5)(e)(i)(B) liability obligations to other persons are satisfied in whole or in part by payments made under this part; and(5)(e)(ii) any person:(5)(e)(ii)(A) who is an affiliate of the insolvent insurer; and(5)(e)(ii)(B) whose liability obligations to other persons are satisfied in whole or in part by payments made under this part.(5)(f)(5)(f)(i) The receiver, liquidator, or statutory successor of an insolvent insurer is bound by:(5)(f)(i)(A) a determination of a covered claim eligibility under this part; and(5)(f)(i)(B) a settlement of a covered claim by the association or a similar organization in another state.(5)(f)(ii) The court having jurisdiction shall grant settled claims a priority equal to that which the claimant would have been entitled to in the absence of this part, against the assets of the insolvent insurer.(5)(g) The association or any similar organization in another state shall:(5)(g)(i) be recognized as a claimant in the liquidation of an insolvent insurer for any amounts paid on a covered claim obligation as determined under this part or a similar law in another state; and(5)(g)(ii) receive dividends or distributions at the priority set forth in Section 31A-27a-701.(5)(h)(5)(h)(i) The association shall periodically file with the receiver or liquidator of the insolvent insurer:(5)(h)(i)(A) statements of the covered claims paid by the association; and(5)(h)(i)(B) estimates of anticipated claims on the association.(5)(h)(ii) The filing under this Subsection (5)(h) preserves the rights of the association for claims against the assets of the insolvent insurer.(5)(i) The association need not pay any claim filed after the final date under Sections 31A-27a-406 and 31A-27a-601, or similar statutes of other states, for filing the same type of claim with the liquidator of the insolvent insurer. - Covered claim: means an unpaid claim, including an unpaid claim under a personal lines policy for unearned premiums submitted by a claimant, if: