Utah Code 31A-5-507. Conversion of assessable to nonassessable and nonassessable to assessable mutuals

(1)

When an assessable mutual accumulates enough surplus to satisfy the financial requirements for the operation of a nonassessable mutual, it may apply for a certificate of authority authorizing it to sell nonassessable policies. The commissioner shall issue a certificate of authority designating it a nonassessable mutual, if he finds that the applicant satisfies the requirements of the law and that the issuance of nonassessable policies will not endanger the interests of its insureds or the public. Policies issued after the issuance of this certificate of authority are nonassessable. Existing policies remain in effect and are nonassessable.

Terms Used In Utah Code 31A-5-507

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

Contract: A legal written agreement that becomes binding when signed.

Mutual: means a mutual insurance corporation. See Utah Code 31A-1-301

Sell: means to exchange a contract of insurance:

(a)	by any means;

(b)	for money or its equivalent; and

(c)

on behalf of an insurance company. See Utah Code 31A-1-301

Surplus: means the excess of assets over the sum of paid-in capital and liabilities. See Utah Code 31A-1-301

(2)

A nonassessable mutual may apply to the commissioner for a certificate of authority designating it an assessable mutual. The commissioner shall issue the certificate if the law permits the corporation to issue assessable policies and if he finds that the conversion will not endanger the interests of insureds or the public. All policies issued after conversion are assessable, unless otherwise provided by contract.

Enacted by Chapter 242, 1985 General Session

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