Subject to Section 31A-5-213, a person, including a stock insurancecorporation, insurance holding company, stock corporation to finance an insurer or insurance production for an insurer, corporation to provide management or administrative services for any of the entities named above, or mutual insurer, may not solicit subscriptions for its securities, or in the case of a mutual insurance corporation, solicit applications for qualifying insurance policies or subscriptions for mutual bonds or contribution notes, until the commissioner has issued an organization permit.
Terms Used In Utah Code 31A-5-204
Application: means a document:
(a)
(i)
completed by an applicant to provide information about the risk to be insured; and
(ii)
that contains information that is used by the insurer to evaluate risk and decide whether to:
(A)
insure the risk under:
(I)
the coverage as originally offered; or
(II)
a modification of the coverage as originally offered; or
(B)
decline to insure the risk; or
(b)
used by the insurer to gather information from the applicant before issuance of an annuity contract. See Utah Code 31A-1-301
articles of incorporation: means :
(a)
the original articles;
(b)
a special law;
(c)
a charter;
(d)
an amendment;
(e)
restated articles;
(f)
articles of merger or consolidation;
(g)
a trust instrument;
(h)
another constitutive document for a trust or other entity that is not a corporation; and
(i)
an amendment to an item listed in Subsections (11)(a) through (h). See Utah Code 31A-1-301
Business plan: means the information required to be supplied to the commissioner under Subsections 31A-5-204(2)(i) and (j), including the information required when these subsections apply by reference under:
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Corporation: means an insurance corporation, except when referring to:
Director: means a member of the board of directors of a corporation. 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 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
Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
Permanent surplus: means the surplus of an insurer or organization that is designated by the insurer or organization as permanent. See Utah Code 31A-1-301
Person: includes :
(a)
an individual;
(b)
a partnership;
(c)
a corporation;
(d)
an incorporated or unincorporated association;
(e)
a joint stock company;
(f)
a trust;
(g)
a limited liability company;
(h)
a reciprocal;
(i)
a syndicate; or
(j)
another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301
Proceeding: includes an action or special statutory proceeding. 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
Surplus: means the excess of assets over the sum of paid-in capital and liabilities. See Utah Code 31A-1-301
(2)
The application for an organization permit shall give the name of the insurer to be formed and shall be signed and acknowledged by or on behalf of each incorporator. The application shall include or have attached:
(a)
the names, and for the preceding 10 years all addresses, and all occupations of the incorporators and the proposed directors and officers;
(b)
for all persons planned by the incorporators to own 10% or more of the capital stock of the corporation, their annual financial statements and reports for the three most recent years, and if the planned shareholders are corporations, their articles and bylaws, and a list of the names, addresses, and occupations of all their directors and principal officers;
(c)
the proposed articles, which shall be signed and acknowledged by or on behalf of each incorporator, and the proposed bylaws;
(d)
all agreements relating to the corporation to which any incorporator, proposed director, or officer is a party;
(e)
the amount and sources of the funds available for organization expenses and the proposed arrangements for reimbursement and compensation of incorporators or other persons;
(f)
the plan for solicitation of applications for qualifying insurance policies and for the corporation’s securities;
(g)
the forms to be used for stock subscriptions, certificates for shares, applications for qualifying insurance policies, subscriptions for mutual bonds and contribution notes, and the forms for bonds and notes;
(h)
the capital and initial paid in surplus in the case of a stock insurer, or the minimum permanent surplus and the additional surplus in the case of a mutual insurer;
(i)
the plan for conducting the insurance business, including:
(i)
the geographical area in which business is intended to be done in the first two years;
(ii)
the types of insurance intended to be written in the first two years;
(iii)
the proposed marketing methods;
(iv)
when requested by the commissioner, the proposed method for establishing premium rates; and
(v)
the proposed aggregate compensation of the five highest compensated officers, directors, and employees;
(j)
a projection certified by a member of the American Academy of Actuaries of the anticipated operating results of the corporation at the end of each of the first two years of operation, based on reasonable assumptions of loss experience, premium and other income, operating expenses, and acquisition costs; and
(k)
any other relevant document or information the commissioner reasonably requires.
(3)
The commissioner shall issue an organization permit if:
(a)
all the requirements of law have been met, including the payment of fees;
(b)
all the incorporators, persons listed in Subsection (2)(b), and the proposed directors and officers of the corporation being formed, are trustworthy and collectively have the competence and experience to engage in the particular insurance business proposed;
(c)
the business plan is consistent with the interests of the corporation’s potential insureds and the public; and
If the commissioner denies the application for a permit, the commissioner shall state the reasons for the denial.
(5)
(a)
The organization permit shall:
(i)
specify the minimum capital or minimum permanent surplus required under Section 31A-5-211; and
(ii)
describe the securities or policies to be solicited under the permit.
(b)
The organization permit may contain any other information the commissioner considers necessary.
(6)
The director of the Division of Corporations and Commercial Code shall accept the filing of the corporation’s articles of incorporation upon notice from the insurance commissioner that all the applicable requirements of law have been met, including the payment of fees.
(7)
(a)
When the director of the Division of Corporations and Commercial Code accepts the articles of incorporation:
(i)
the legal existence of the corporation begins;
(ii)
the articles and bylaws become effective; and
(iii)
the proposed directors and officers take office.
(b)
The certificate is conclusive evidence of compliance with this section, except in a proceeding by the state against the corporation.
(8)
Notwithstanding Title 63G, Chapter 2, Government Records Access and Management Act, the permit applicant may request that any part of the information supplied under Subsection (2) be kept confidential. The information shall then be kept confidential unless the commissioner expressly finds, after a hearing, that the interest of the corporation or the public requires that the information be open to the public.
