Insurance, Administration

Rule R590-234

Single Risk Limitation

Notice of Proposed Rule

(Repeal)

DAR File No.: 33648
Filed: 05/13/2010 05:22:47 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule was written to regulate unlimited health insurance policies as defined in Section 31A-20-108. With the passage in 2009 of H.B. 52, health insurance has been exempted from regulation under this section of the Code. (DAR NOTE: H.B. 52 (2009) is found at Chapter 349, Laws of Utah 2009, and was effective 05/12/2009.)

Summary of the rule or change:

This rule is repealed in its entirety.

State statutory or constitutional authorization for this rule:

• Subsection 31A-2-201(3)
• Subsection 31A-20-108(2)(b)

Anticipated cost or savings to:

the state budget:

The repeal of this rule will have no fiscal impact on the department since there is no fee involved in it and the rule just sets a limit for unlimited insurance policies.

local governments:

This rule has no impact on local governments. It deals solely with the relationship between the department and their licensees.

small businesses:

The repeal of this rule will have no effect on small businesses, especially since the provisions of the rule deal with policies purchased by larger employers.

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

There will be no cost to insurers or their insureds due to the withdrawal of the previous restrictions and requirements on health insurers who sell unlimited insurance policies.

Compliance costs for affected persons:

There will be no cost to insurers or their insureds due to the withdrawal of the previous restrictions and requirements on health insurers who sell unlimited insurance policies.

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

It is very unlikely there will be any cost to Utah Businesses as a result of the repeal of this rule.

Neal T. Gooch, Acting Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
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 jwhitby@utah.gov

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:

07/01/2010

This rule may become effective on:

07/08/2010

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

[R590-234. Single Risk Limitation.

R590-234-1. Authority.

This rule is promulgated by the insurance commissioner pursuant to Subsection 31A-2-201(3) and 31A-20-108(2)(b).

 

R590-234-2. Purpose and Scope.

(1) The purpose of this rule is to set forth procedures necessary to determine compliance with 31A-20-108, in cases where unlimited insurance policies are issued.

(2) This rule applies to all entities that write unlimited insurance policies, except title, workers' compensation, occupational disease, and employers' liability insurance policies.

 

R590-234-3. Definitions.

In addition to the definitions of Section 31A-1-301, the following definitions shall apply for the purpose of this rule:

(1) "Unlimited Insurance Policy" means an insurance policy that does not specify a maximum limit for benefits to be paid under the policy.

(2) "Single risk" includes all losses reasonably expected as a result of the same event.

(3) "Single Risk Limitation" is 10% of capital and surplus, as prescribed by 31A-20-108(2).

 

R590-234-4. Calculation of Single Risk Limitation for Unlimited Insurance Policies.

In cases where unlimited insurance policies are issued, the insurer shall use $2,000,000 as the maximum potential risk, for purposes of determining compliance with the single risk limitation.

 

R590-234-5. Enforcement Date.

The commissioner will begin enforcing the provisions of this rule 45 days from the rule's effective date.

 

R590-234-6. Severability.

If any provision of this rule or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of the provision to other persons or circumstances may not be affected by it.

 

KEY: single risk limitation

Date of Enactment or Last Substantive Amendment: March 22, 2006

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-20-108 ]