No. 38555 (5-year Review): Rule R590-171. Surplus Lines Procedures Rule

DAR File No.: 38555
Filed: 05/27/2014 11:17:27 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:

Section 31A-2-201 gives the commissioner the authority to promulgate rules to implement the provisions of Title 31A. Subsection 31A-15-103(3) prescribes how a surplus lines producer may make or seek remuneration for insurance placed by a surplus lines producer and advertise surplus lines services. This is done in Section R590-171-7 of the rule. Subsection 31A-15-103(11) gives the commissioner the right to establish an organization to examine surplus lines policies to be sure they comply with the requirements of the law and the payment of taxes. This is done in Section R590-171-4. Section 31A-15-111 authorizes the commissioner to require that surplus lines brokers be members of an advisory organization under this section of the law. This is done in Subsection R590-171-4(B).

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

In 2012, changes were made to this rule to comply with federal Non-Admitted and Reinsurance Reform Act (NRRA) of 07/21/2010. One comment was received during the comment period suggesting that a date in Subsection R590-171-3(b) be corrected, which was done. No additional comments were received during the comment period and at any other time 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 defines the authority of the Surplus Lines Association, outlines the conditions for placing insurance with surplus lines insurers, and provides examination requirements for the Surplus Lines Association. The rule is also necessary to provide a measure of accountability for the Surplus Lines Association and how this line of insurance is sold in Utah. 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]

Effective:

05/27/2014

Authorized by:

Todd Kiser, Commissioner

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