31A-1-103 - Scope and applicability of title.
31A-1-103. Scope and applicability of title.
(1) This title does not apply to:
(a) a retainer contract made by an attorney-at-law:
(i) with an individual client; and
(ii) under which fees are based on estimates of the nature and amount of services to beprovided to the specific client;
(b) a contract similar to a contract described in Subsection (1)(a) made with a group ofclients involved in the same or closely related legal matters;
(c) an arrangement for providing benefits that do not exceed a limited amount ofconsultations, advice on simple legal matters, either alone or in combination with referralservices, or the promise of fee discounts for handling other legal matters;
(d) limited legal assistance on an informal basis involving neither an express contractualobligation nor reasonable expectations, in the context of an employment, membership,educational, or similar relationship;
(e) legal assistance by employee organizations to their members in matters relating toemployment; or
(f) death, accident, health, or disability benefits provided to a person by an organizationor its affiliate if:
(i) the organization is tax exempt under Section 501(c)(3) of the Internal Revenue Codeand has had its principal place of business in Utah for at least five years;
(ii) the person is not an employee of the organization; and
(iii) (A) substantially all the person's time in the organization is spent providingvoluntary services:
(I) in furtherance of the organization's purposes;
(II) for a designated period of time; and
(III) for which no compensation, other than expenses, is paid; or
(B) the time since the service under Subsection (1)(f)(iii)(A) was completed is no morethan 18 months.
(2) (a) This title restricts otherwise legitimate business activity.
(b) What this title does not prohibit is permitted unless contrary to other provisions ofUtah law.
(3) Except as otherwise expressly provided, this title does not apply to:
(a) those activities of an insurer where state jurisdiction is preempted by Section 514 ofthe federal Employee Retirement Income Security Act of 1974, as amended;
(b) ocean marine insurance;
(c) death, accident, health, or disability benefits provided by an organization if theorganization:
(i) has as its principal purpose to achieve charitable, educational, social, or religiousobjectives rather than to provide death, accident, health, or disability benefits;
(ii) does not incur a legal obligation to pay a specified amount; and
(iii) does not create reasonable expectations of receiving a specified amount on the partof an insured person;
(d) other business specified in rules adopted by the commissioner on a finding that:
(i) the transaction of the business in this state does not require regulation for theprotection of the interests of the residents of this state; or
(ii) it would be impracticable to require compliance with this title;
(e) except as provided in Subsection (4), a transaction independently procured throughnegotiations under Section 31A-15-104;
(f) self-insurance;
(g) reinsurance;
(h) subject to Subsection (5), employee and labor union group or blanket insurancecovering risks in this state if:
(i) the policyholder exists primarily for purposes other than to procure insurance;
(ii) the policyholder:
(A) is not a resident of this state;
(B) is not a domestic corporation; or
(C) does not have its principal office in this state;
(iii) no more than 25% of the certificate holders or insureds are residents of this state;
(iv) on request of the commissioner, the insurer files with the department a copy of thepolicy and a copy of each form or certificate; and
(v) (A) the insurer agrees to pay premium taxes on the Utah portion of its business, as ifit were authorized to do business in this state; and
(B) the insurer provides the commissioner with the security the commissioner considersnecessary for the payment of premium taxes under Title 59, Chapter 9, Taxation of AdmittedInsurers;
(i) to the extent provided in Subsection (6):
(i) a manufacturer's or seller's warranty; and
(ii) a manufacturer's or seller's service contract;
(j) except to the extent provided in Subsection (7), a public agency insurance mutual; or
(k) except as provided in Chapter 6b, Guaranteed Asset Protection Waiver Act, aguaranteed asset protection waiver.
(4) A transaction described in Subsection (3)(e) is subject to taxation under Section31A-3-301.
(5) (a) After a hearing, the commissioner may order an insurer of certain group or blanketcontracts to transfer the Utah portion of the business otherwise exempted under Subsection (3)(h)to an authorized insurer if the contracts have been written by an unauthorized insurer.
(b) If the commissioner finds that the conditions required for the exemption of a group orblanket insurer are not satisfied or that adequate protection to residents of this state is notprovided, the commissioner may require:
(i) the insurer to be authorized to do business in this state; or
(ii) that any of the insurer's transactions be subject to this title.
(6) (a) As used in Subsection (3)(i) and this Subsection (6):
(i) "manufacturer's or seller's service contract" means a service contract:
(A) made available by:
(I) a manufacturer of a product;
(II) a seller of a product; or
(III) an affiliate of a manufacturer or seller of a product;
(B) made available:
(I) on one or more specific products; or
(II) on products that are components of a system; and
(C) under which the person described in Subsection (6)(a)(i)(A) is liable for services tobe provided under the service contract including, if the manufacturer's or seller's service contractdesignates, providing parts and labor;
(ii) "manufacturer's or seller's warranty" means the guaranty of:
(A) (I) the manufacturer of a product;
(II) a seller of a product; or
(III) an affiliate of a manufacturer or seller of a product;
(B) (I) on one or more specific products; or
(II) on products that are components of a system; and
(C) under which the person described in Subsection (6)(a)(ii)(A) is liable for services tobe provided under the warranty, including, if the manufacturer's or seller's warranty designates,providing parts and labor; and
(iii) "service contract" is as defined in Section 31A-6a-101.
(b) A manufacturer's or seller's warranty may be designated as:
(i) a warranty;
(ii) a guaranty; or
(iii) a term similar to a term described in Subsection (6)(b)(i) or (ii).
(c) This title does not apply to:
(i) a manufacturer's or seller's warranty;
(ii) a manufacturer's or seller's service contract paid for with consideration that is inaddition to the consideration paid for the product itself; and
(iii) a service contract that is not a manufacturer's or seller's warranty or manufacturer'sor seller's service contract if:
(A) the service contract is paid for with consideration that is in addition to theconsideration paid for the product itself;
(B) the service contract is for the repair or maintenance of goods;
(C) the cost of the product is equal to an amount determined in accordance withSubsection (6)(e); and
(D) the product is not a motor vehicle.
(d) This title does not apply to a manufacturer's or seller's warranty or service contractpaid for with consideration that is in addition to the consideration paid for the product itselfregardless of whether the manufacturer's or seller's warranty or service contract is sold:
(i) at the time of the purchase of the product; or
(ii) at a time other than the time of the purchase of the product.
(e) (i) For fiscal year 2001-02, the amount described in Subsection (6)(c)(iii)(C) shall beequal to $3,700 or less.
(ii) For each fiscal year after fiscal year 2001-02, the commissioner shall annuallydetermine whether the amount described in Subsection (6)(c)(iii)(C) should be adjusted inaccordance with changes in the Consumer Price Index published by the United States Bureau ofLabor Statistics selected by the commissioner by rule, between:
(A) the Consumer Price Index for the February immediately preceding the adjustment;and
(B) the Consumer Price Index for February 2001.
(iii) If under Subsection (6)(e)(ii) the commissioner determines that an adjustment shouldbe made, the commissioner shall make the adjustment by rule.
(7) (a) For purposes of this Subsection (7), "public agency insurance mutual" means anentity formed by two or more political subdivisions or public agencies of the state:
(i) under Title 11, Chapter 13, Interlocal Cooperation Act; and
(ii) for the purpose of providing for the political subdivisions or public agencies:
(A) subject to Subsection (7)(b), insurance coverage; or
(B) risk management.
(b) Notwithstanding Subsection (7)(a)(ii)(A), a public agency insurance mutual may notprovide health insurance unless the public agency insurance mutual provides the health insuranceusing:
(i) a third party administrator licensed under Chapter 25, Third Party Administrators;
(ii) an admitted insurer; or
(iii) a program authorized by Title 49, Chapter 20, Public Employees' Benefit andInsurance Program Act.
(c) Except for this Subsection (7), a public agency insurance mutual is exempt from thistitle.
(d) A public agency insurance mutual is considered to be a governmental entity andpolitical subdivision of the state with all of the rights, privileges, and immunities of agovernmental entity or political subdivision of the state including all the rights and benefits ofTitle 63G, Chapter 7, Governmental Immunity Act of Utah.
Amended by Chapter 274, 2010 General Session