No. 37100 (5-year Review): Rule R590-155. Utah Life and Health Insurance Guaranty Association Summary Document

DAR File No.: 37100
Filed: 12/12/2012 11:41:52 AM

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)(a) authorizes the commissioner to make rules to implement the provisions of the Insurance Code. Section 31A-28-119 provides guidelines for the Utah Life and Health Insurance Guaranty Association summary and disclaimer document. The purpose of the rule is to specify the form and content of the summary and disclaimer document for insurers to disclose to policy and contract holders the intent that contractual guarantees are not covered or have limited coverage by the Utah Life and Health Insurance Guaranty Association.

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 received three written comments while this rule was being amended in the first half of 2010. One company representative was happy with the changes and thought they brought clarity to the rule. The other two comments received asked that the effective date and enforcement dates of the rule changes be extended to give them more time to comply with the new provisions. Specialists with the department did not think this necessary since the changes were not onerous and insurers had been aware of the impending change for some time.

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

Section 31A-28-119 was written to prohibit agents from telling prospective insureds that the policy they were buying was covered by the Guaranty Association, in the event the insurance company becomes insolvent. This assurance has been used deceptively to sell policies where the insurer was financially insolvent and/or unsound. 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:

Neal Gooch, Commissioner

Effective:

12/12/2012

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