No. 43281 (New Rule): Rule R590-278. Consent Requests Under 18 USC 1033(e)(2)

(New Rule)

DAR File No.: 43281
Filed: 10/16/2018 02:07:12 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This new rule creates a process by which prospective licensees may petition the Department of Insurance (Department) Commissioner for written consent to participate in the business of insurance if they have certain felony convictions.

Summary of the rule or change:

Under 18 USC 1033(e)(2), a person with certain types of felony convictions are prohibited from engaging in the insurance business. However, the statute makes an exception for those convicts who obtain the Commissioner's consent to engage in the insurance business. This rule formalizes the process for obtaining that consent.

Statutory or constitutional authorization for this rule:

• Subsection 31A-2-201(3)
• Subsection 31A-23a-111(5)(b)

Anticipated cost or savings to:

the state budget:

There is no anticipated cost or savings to the state budget. Based on past inquiries, the Department estimates that it will receive approximately five requests a year under this rule. Processing these requests will be manageable and can be handled as part of a normal workload.

local governments:

There is no anticipated cost or savings to local governments. This rule concerns the relationship between the Department and prospective licensees, and will not affect local governments.

small businesses:

There is no anticipated cost or savings to small businesses. This rule concerns the relationship between the Department and prospective licensees, and will not affect small businesses.

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

A person who chooses to pursue a consent request under 18 USC 1033(e)(2) will be required to pay a $32 fee for a background check, and may have other costs such as copying or record request fees. The Department estimates that the total cost, inclusive of all fees, will be no more than $100 per affected person. The Department expects to process approximately five requests a year, for an aggregate annual cost of $500 to individuals as a group.

Compliance costs for affected persons:

A person who chooses to pursue a consent request under 18 USC 1033(e)(2) will be required to pay a $32 fee for a background check, and may have other costs such as copying or record request fees. The Department estimates that the total cost, inclusive of all fees, will be no more than $100 per affected person.

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

After conducting a thorough analysis, it was determined that this proposed rule will not result in a fiscal impact to businesses.

Todd E Kiser, Insurance 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:

12/17/2018

This rule may become effective on:

12/24/2018

Authorized by:

Steve Gooch, Information Specialist

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2019

FY 2020

FY 2021

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 in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses**

This proposed new rule is not expected to have any fiscal impact on non-small businesses revenues or expenditures, because it only concerns the relationship between the Insurance Department and individual prospective insurance licensees.

 

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

 

**"Non - small business" means a business employing 50 or more persons; "small business" means a business employing fewer than 50 persons.

 

 

R590. Insurance Department, Administration.

R590-278. Consent Requests Under 18 USC 1033(e)(2).

R590-278-1. Authority.

This rule is adopted pursuant to the following:

(1) Subsection 31A-2-201(3) that authorizes the commissioner to make rules to implement the provisions of Title 31A; and

(2) Subsection 31A-23a-111(5)(b) that authorizes the commissioner to act in compliance with the federal Violent Crime Control and Law Enforcement Act of 1994, 18 USC 1033.

 

R590-278-2. Consent Request Made by Filing Request for Agency Action.

(1) A request under 18 USC 1033(e)(2) for the commissioner's written consent to engage or participate in the business of insurance shall be initiated by filing a request for agency action. The form "Request for Agency Action Re: 18 USC 1033(e)(2)", available on the department's website, shall be used to make the request. After completion, the form shall be filed as directed in Sections R590-160-5 or R590-160-5.5

(2) A request for agency action under this rule is a request for a formal adjudicative proceeding and is governed by the relevant provisions of the Utah Administrative Procedures Act, Title 63G, Chapter 4, and Section R590-160.

 

R590-278-3. Hearing on Request for Agency Action.

(1) A presiding officer shall conduct a hearing on the merits of a request for agency action under this rule.

(2) After the hearing, the presiding officer shall submit to the commissioner the record of the proceeding, recommended findings of fact and conclusions of law, and a recommended order.

(3) The commissioner shall issue final Findings of Fact and Conclusions of Law and a final Order which constitute final agency action that is not subject to agency review.

(4) A party may seek judicial review of the final agency action as provided in the Utah Administrative Procedures Act, Title 63G, Chapter 4.

 

R590-278-4. Determining Consent Request.

Written consent may be granted if, in the commissioner's sole discretion, a preponderance of the evidence shows that the petitioner is trustworthy to engage or participate in the business of insurance. The following are relevant to that determination:

(1) Any materially false or misleading statement or omission in the request for agency action;

(2) The nature, severity and number of the petitioner's crimes;

(3) The petitioner's age at the time the crimes were committed;

(4) The lengths of the sentences;

(5) The length of time since the petitioner's most recent conviction;

(6) The petitioner's rehabilitation, including evidence of counseling, community service, completion of probation, and payment of restitution, fines and interest if applicable;

(7) Any reference letter;

(8) The presence of any fact or circumstance in the petitioner's current life that may have motivated the petitioner to commit crime in the past;

(9) Any unpaid judgment; or

(10) Information received from the National Association of Insurance Commissioners and any insurance regulatory official.

 

R590-278-5. Severability.

If any provision or clause of this rule or its application to any person or situation is held invalid, that invalidity may not affect any other provision or application of this rule which can be given effect without the invalid provision or application, and to this end the provisions of this rule are declared to be severable.

 

KEY: insurance

Date of Enactment or Last Substantive Amendment: 2018

Authorizing, and Implemented or Interpreted Law: 31-A-23a-111(5)(b); 31A-2-201(3)

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