No. 29406: R590-103. Security Deposits

DAR File No.: 29406
Filed: 01/11/2007, 04:00
Received by: NL

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsection 31A-2-201(3) authorizes the commissioner to write rules to implement Title 31A of the Utah Code. Subsection 31A-2-206(17) authorizes the commissioner to write rules to implement the provisions of this section dealing with the receipt and handling of deposits and the type of securities that may be qualified in the deposits.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

The department has not received any written comments regarding this rule in the past five years.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

This rule requires insurance companies to deposit a certain amount of money into an account to take care of claims in case they go out of business. The deposit helps pay for claims, which are also covered, in part, by a guaranty association, which most companies are associated with. However, the most important use of the money in these deposits is to help cover administrative costs of a liquidation. The rule provides guidelines that help secure that the deposits are federally secured and the financial institution is holding the required amount. Without these safeguards, it would be very difficult to be sure that the funds are actually deposited, as required by the law. Therefore, this rule should be continued.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

Direct questions regarding this rule to:

Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Authorized by:

Jilene Whitby, Information Specialist