31A-23a-402 - Unfair marketing practices -- Communication -- Inducement -- Unfair discrimination -- Coercion or intimidation -- Restriction on choice.
31A-23a-402. Unfair marketing practices -- Communication -- Inducement --Unfair discrimination -- Coercion or intimidation -- Restriction on choice.
(1) (a) (i) Any of the following may not make or cause to be made any communicationthat contains false or misleading information, relating to an insurance product or contract, anyinsurer, or any licensee under this title, including information that is false or misleading becauseit is incomplete:
(A) a person who is or should be licensed under this title;
(B) an employee or producer of a person described in Subsection (1)(a)(i)(A);
(C) a person whose primary interest is as a competitor of a person licensed under thistitle; and
(D) a person on behalf of any of the persons listed in this Subsection (1)(a)(i).
(ii) As used in this Subsection (1), "false or misleading information" includes:
(A) assuring the nonobligatory payment of future dividends or refunds of unusedpremiums in any specific or approximate amounts, but reporting fully and accurately pastexperience is not false or misleading information; and
(B) with intent to deceive a person examining it:
(I) filing a report;
(II) making a false entry in a record; or
(III) wilfully refraining from making a proper entry in a record.
(iii) A licensee under this title may not:
(A) use any business name, slogan, emblem, or related device that is misleading or likelyto cause the insurer or other licensee to be mistaken for another insurer or other licensee alreadyin business; or
(B) use any advertisement or other insurance promotional material that would cause areasonable person to mistakenly believe that a state or federal government agency:
(I) is responsible for the insurance sales activities of the person;
(II) stands behind the credit of the person;
(III) guarantees any returns on insurance products of or sold by the person; or
(IV) is a source of payment of any insurance obligation of or sold by the person.
(iv) A person who is not an insurer may not assume or use any name that deceptivelyimplies or suggests that person is an insurer.
(v) A person other than persons licensed as health maintenance organizations underChapter 8 may not use the term "Health Maintenance Organization" or "HMO" in referring toitself.
(b) A licensee's violation creates a rebuttable presumption that the violation was alsocommitted by the insurer if:
(i) the licensee under this title distributes cards or documents, exhibits a sign, orpublishes an advertisement that violates Subsection (1)(a), with reference to a particular insurer:
(A) that the licensee represents; or
(B) for whom the licensee processes claims; and
(ii) the cards, documents, signs, or advertisements are supplied or approved by thatinsurer.
(2) (a) (i) A licensee under this title, or an officer or employee of a licensee may notinduce any person to enter into or continue an insurance contract or to terminate an existinginsurance contract by offering benefits not specified in the policy to be issued or continued,
including premium or commission rebates.
(ii) An insurer may not make or knowingly allow any agreement of insurance that is notclearly expressed in the policy to be issued or renewed.
(iii) This Subsection (2)(a) does not preclude:
(A) an insurer from reducing premiums because of expense savings;
(B) an insurer from providing to a policyholder or insured one or more incentives toparticipate in programs or activities designed to reduce claims or claim expenses;
(C) the usual kinds of social courtesies not related to particular transactions; or
(D) an insurer from receiving premiums under an installment payment plan.
(iv) The commissioner may adopt rules in accordance with Title 63G, Chapter 3, UtahAdministrative Rulemaking Act, to define what constitutes an incentive described in Subsection(2)(a)(iii)(B).
(b) A licensee under this title may not absorb the tax under Section 31A-3-301.
(c) (i) A title insurer or producer or any officer or employee of either may not pay, allow,give, or offer to pay, allow, or give, directly or indirectly, as an inducement to obtaining any titleinsurance business:
(A) any rebate, reduction, or abatement of any rate or charge made incident to theissuance of the title insurance;
(B) any special favor or advantage not generally available to others; or
(C) any money or other consideration, except if approved under Section 31A-2-405; or
(D) material inducement.
(ii) "Charge made incident to the issuance of the title insurance" includes escrowcharges, and any other services that are prescribed in rule by the Title and Escrow Commissionafter consultation with the commissioner and subject to Section 31A-2-404.
(iii) An insured or any other person connected, directly or indirectly, with the transaction,including a mortgage lender, real estate broker, builder, attorney, or any officer, employee, oragent of any of them, may not knowingly receive or accept, directly or indirectly, any benefitreferred to in Subsection (2)(c)(i).
(3) (a) An insurer may not unfairly discriminate among policyholders by chargingdifferent premiums or by offering different terms of coverage, except on the basis ofclassifications related to the nature and the degree of the risk covered or the expenses involved.
(b) Rates are not unfairly discriminatory if they are averaged broadly among personsinsured under a group, blanket, or franchise policy, and the terms of those policies are notunfairly discriminatory merely because they are more favorable than in similar individualpolicies.
(4) (a) This Subsection (4) applies to:
(i) a person who is or should be licensed under this title;
(ii) an employee of that licensee or person who should be licensed;
(iii) a person whose primary interest is as a competitor of a person licensed under thistitle; and
(iv) one acting on behalf of any person described in Subsections (4)(a)(i) through (iii).
(b) A person described in Subsection (4)(a) may not commit or enter into any agreementto participate in any act of boycott, coercion, or intimidation that:
(i) tends to produce:
(A) an unreasonable restraint of the business of insurance; or
(B) a monopoly in that business; or
(ii) results in an applicant purchasing or replacing an insurance contract.
(5) (a) (i) Subject to Subsection (5)(a)(ii), a person may not restrict in the choice of aninsurer or licensee under this chapter, another person who is required to pay for insurance as acondition for the conclusion of a contract or other transaction or for the exercise of any rightunder a contract.
(ii) A person requiring coverage may reserve the right to disapprove the insurer or thecoverage selected on reasonable grounds.
(b) The form of corporate organization of an insurer authorized to do business in thisstate is not a reasonable ground for disapproval, and the commissioner may by rule specifyadditional grounds that are not reasonable. This Subsection (5) does not bar an insurer fromdeclining an application for insurance.
(6) A person may not make any charge other than insurance premiums and premiumfinancing charges for the protection of property or of a security interest in property, as a conditionfor obtaining, renewing, or continuing the financing of a purchase of the property or the lendingof money on the security of an interest in the property.
(7) (a) A licensee under this title may not refuse or fail to return promptly all indicia ofagency to the principal on demand.
(b) A licensee whose license is suspended, limited, or revoked under Section 31A-2-308,31A-23a-111, or 31A-23a-112 may not refuse or fail to return the license to the commissioner ondemand.
(8) (a) A person may not engage in any other unfair method of competition or any otherunfair or deceptive act or practice in the business of insurance, as defined by the commissionerby rule, after a finding that they:
(i) are misleading;
(ii) are deceptive;
(iii) are unfairly discriminatory;
(iv) provide an unfair inducement; or
(v) unreasonably restrain competition.
(b) Notwithstanding Subsection (8)(a), for purpose of the title insurance industry, theTitle and Escrow Commission shall make rules, subject to Section 31A-2-404, that define anyother unfair method of competition or any other unfair or deceptive act or practice after a findingthat they:
(i) are misleading;
(ii) are deceptive;
(iii) are unfairly discriminatory;
(iv) provide an unfair inducement; or
(v) unreasonably restrain competition.
Amended by Chapter 382, 2008 General Session