No. 43514 (5-year Review): Rule R590-170. Fiduciary and Trust Account Obligations

DAR File No.: 43514
Filed: 02/11/2019 02:38:42 PM

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 Insurance Commissioner to adopt rules to implement the Insurance Code, Title 31A. Sections 31A-23a-406 and 31A-23a-409 do not have specific rulemaking authority; they deal with the title business and how funds received by a title agent should be maintained, which is covered under Section R590-170-5. Sections 31A-23a-410 and 31A-23a-411.1 refer to the insurer's liability when an agent or agency does not forward the premium for a policy to the insurer. Subsection 31A-23a-412(2)(b)(iii)(C) authorizes the Insurance Commissioner to require certain records to be kept regarding an insurance licensee's business; Section R590-170-7 specifies accounting records that are to be maintained by the licensee. Subsection 31A-25-305(1) authorizes the Insurance Commissioner to adopt rules that will protect the integrity of a fiduciary account. The purpose of this rule is to set minimum standards that are to be followed for fiduciary and trust account obligations.

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 Insurance Department (Department) has received no written comments regarding this rule during 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 sets the minimum standards to be followed by licensees who hold an insurer's or insured's funds in a fiduciary capacity. It is critical that these minimum standards be maintained intact by continuing this rule to protect the funds of the payee held in trust by the licensee. Trust violations continue to occur. The Department needs the standards set by this rule to regulate the marketplace. Therefore, this rule should be continued.

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]

Effective:

02/11/2019

Authorized by:

Steve Gooch, Information Specialist

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