No. 42214 (Change in Proposed Rule): Rule R590-276. Record Retention for Foreign, Alien, Commercially Domiciled, Foreign Title and Foreign Fraternals

DAR File No.: 42214
Filed: 02/20/2018 03:11:34 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This change in proposed rule is being done to clarify differences in record retention requirements for foreign title transactions and escrow transactions involving real property. It also makes a number of general clarifications and grammatical changes.

Summary of the rule or change:

This change separates foreign title transactions and escrow transactions involving real property. It retains the 15-year retention requirement for foreign title transactions and clarifies that escrow transactions involving real property have a 3-year retention requirement. These retention periods are consistent with existing Insurance Department policy that is set forth in Subsections 31A-20-110(1) and 31A-23a-412(5), and clarified by Bulletin 2014-6. This rule change also adds a citation to the authority section, streamlines language to make it clearer and more accurate, and makes grammatical changes. (EDITOR'S NOTE: The original proposed new rule upon which this change in proposed rule (CPR) was based was published in the November 1, 2017, issue of the Utah State Bulletin, on page 165. Underlining in the rule below indicates text that has been added since the publication of the proposed new rule mentioned above; strike-out indicates text that has been deleted. You must view the CPR and the proposed new rule together to understand all of the changes that will be enforceable should the agency make this rule effective.)

Statutory or constitutional authorization for this rule:

• Subsection 31A-14-205.5(5)(a)
• Section 31A-2-201
• Subsection 31A-23a-412(5)

Anticipated cost or savings to:

the state budget:

There is no anticipated cost or savings to the state budget. This rule change merely codifies and clarifies existing practices for licensees in the title and escrow industry. It requires no change in work by the Insurance Department.

local governments:

There is no cost or savings to local governments. This rule change deals with the file retention requirements for title and escrow professionals and has no bearing on local governments.

small businesses:

There is no anticipated cost or savings to small businesses. Title and escrow licensees already retain records for 15 and 3 years respectively, so there is no change in how they will be required to do business. This change merely codifies and clarifies existing practices.

persons other than small businesses, businesses, or local governmental entities:

There is no anticipated cost or savings to any other persons. Title and escrow licensees already retain records for 15 and 3 years respectively, so there is no change in how they will be required to do business. This change merely codifies and clarifies existing practices.

Compliance costs for affected persons:

There are no compliance costs for affected persons. Title and escrow licensees already retain records for the length of time described in this rule.

Comments by the department head on the fiscal impact the rule may have on businesses:

This change in proposed rule is not expected to have any fiscal impacts on large business' revenues or expenditures because title and escrow licensees already retain records for 15 and 3 years respectively, so there is no change in how they will be required to do business. This change merely codifies and clarifies existing practices.

Todd E. Kiser, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office 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:

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

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

04/16/2018

This rule may become effective on:

04/23/2018

Authorized by:

Steve Gooch, Information Specialist

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2018

FY 2019

FY 2020

State Government

$0

$0

$0

Local Government

$0

$0

$0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Person

$0

$0

$0

Total Fiscal Costs:

$0

$0

$0

Fiscal Benefits

State Government

$0

$0

$0

Local Government

$0

$0

$0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Persons

$0

$0

$0

Total Fiscal Benefits:

$0

$0

$0

Net Fiscal Benefits:

$0

$0

$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described above. Inestimable impacts for Non-Small Businesses are described below.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

This change in proposed rule is not expected to have any fiscal impacts on large businesses revenues or expenditures because title and escrow licensees already retain records for 15 and 3 years respectively, so there is no change in how they will be required to do business. This change merely codifies and clarifies existing practices.

 

Todd E. Kiser, the head of the Insurance Department, has reviewed and approved this fiscal analysis.

 

 

R590. Insurance, Administration.

R590-276. Record Retention for Foreign Insurers, Alien Insurers, Commercially Domiciled Insurers, Foreign Title Insurers and Foreign Fraternals.

R590-276-1. Authority.

This rule is promulgated pursuant to Subsections 31A-2-201,[ and] 31A-14-205.5(5)(a), and 31A-23a-412(5), which authorize the commissioner to adopt a rule to specify the length of time a foreign insurer, alien insurer, commercially domiciled insurer, foreign title insurer, or foreign fraternal must [keep]maintain books and records for [purposes of review]inspection by the [insurance department]commissioner.

 

R590-276-2. Scope.

This rule applies to all foreign insurers, alien insurers, commercially domiciled insurers, foreign title insurers, and foreign fraternals licensed to do business in Utah.

 

R590-276-3. Purpose.

The purpose of this rule is to notify [and clarify to ]foreign insurers, alien insurers, commercially domiciled insurers, foreign title insurers and foreign fraternals of the books and records retention requirements[for purposes of examination by the Utah Insurance Department].

 

R590-276-4. Retention Requirements.

(1) Except as provided in Subsection (2), the retention requirement for the books and records of an insurer or fraternal subject to Title 31A, Chapter 14, Foreign Insurers,[For all insurers under Subsection 31A-14-101 through Subsection 31A-14-217, except foreign title, the books and record retention requirement] is three years plus the current year.

(2) (a) [For all foreign ]The retention requirement for foreign title insurers[, the] books and record s, including records related to title search, examination and underwriting used for determining insurability, [retention requirement ]is 15 years,[per] pursuant to Subsection 31A-20-110(1).

(b) The retention requirement for books and records related to escrow transactions involving real property is 3 years plus the current year, pursuant to Section 31A-23a-412(5).

(3) All [licensees under this subsection shall make the ]books and records shall be made available during normal business hours.

(4) Nothing in this section prohibits electronically stored books and records.

 

R590-276-5. Enforcement Date.

The commissioner will begin enforcing the provisions of this rule 45 days from the rule's effective date.

 

R590-276-6. Severability.

If any provision of this rule or its application to any person s or circumstances is for any reason held to be invalid, the remainder of the rule and the application of the provision to other persons or circumstances shall not be affected thereby.

 

KEY: insurance, record retention

Date of Enactment or Last Substantive Amendment: [December 8, 2017]2018

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-14-205.5(5)(a) ; 31A-23a-412(5)