State Codes and Statutes
Statutes > Utah > Title-31a > Chapter-05 > 31a-5-20431A-5-204. Organization permit -- Certificate of incorporation.
(1) Subject to Section 31A-5-213, a person, including a stock insurance corporation,insurance holding company, stock corporation to finance an insurer or insurance production foran insurer, corporation to provide management or administrative services for any of the entitiesnamed above, or mutual insurer, may not solicit subscriptions for its securities, or in the case of amutual insurance corporation, solicit applications for qualifying insurance policies orsubscriptions for mutual bonds or contribution notes, until the commissioner has issued anorganization permit.
(2) The application for an organization permit shall give the name of the insurer to beformed and shall be signed and acknowledged by or on behalf of each incorporator. Theapplication shall include or have attached:
(a) the names, and for the preceding 10 years all addresses, and all occupations of theincorporators and the proposed directors and officers;
(b) for all persons planned by the incorporators to own 10% or more of the capital stockof the corporation, their annual financial statements and reports for the three most recent years,and if the planned shareholders are corporations, their articles and bylaws, and a list of thenames, addresses, and occupations of all their directors and principal officers;
(c) the proposed articles, which shall be signed and acknowledged by or on behalf ofeach incorporator, and the proposed bylaws;
(d) all agreements relating to the corporation to which any incorporator, proposeddirector, or officer is a party;
(e) the amount and sources of the funds available for organization expenses and theproposed arrangements for reimbursement and compensation of incorporators or other persons;
(f) the plan for solicitation of applications for qualifying insurance policies and for thecorporation's securities;
(g) the forms to be used for stock subscriptions, certificates for shares, applications forqualifying insurance policies, subscriptions for mutual bonds and contribution notes, and theforms for bonds and notes;
(h) the capital and initial paid in surplus in the case of a stock insurer, or the minimumpermanent surplus and the additional surplus in the case of a mutual insurer;
(i) the plan for conducting the insurance business, including:
(i) the geographical area in which business is intended to be done in the first two years;
(ii) the types of insurance intended to be written in the first two years;
(iii) the proposed marketing methods;
(iv) when requested by the commissioner, the proposed method for establishing premiumrates; and
(v) the proposed aggregate compensation of the five highest compensated officers,directors, and employees;
(j) a projection certified by a member of the American Academy of Actuaries of theanticipated operating results of the corporation at the end of each of the first two years ofoperation, based on reasonable assumptions of loss experience, premium and other income,operating expenses, and acquisition costs; and
(k) any other relevant document or information the commissioner reasonably requires.
(3) The commissioner shall issue an organization permit if:
(a) all the requirements of law have been met, including the payment of fees;
(b) all the incorporators, persons listed in Subsection (2)(b), and the proposed directorsand officers of the corporation being formed, are trustworthy and collectively have thecompetence and experience to engage in the particular insurance business proposed;
(c) the business plan is consistent with the interests of the corporation's potential insuredsand the public; and
(d) the bond required by Section 31A-5-205 is filed.
(4) If the commissioner denies the application for a permit, the commissioner shall statethe reasons for the denial.
(5) (a) The organization permit shall:
(i) specify the minimum capital or minimum permanent surplus required under Section31A-5-211; and
(ii) describe the securities or policies to be solicited under the permit.
(b) The organization permit may contain any other information the commissionerconsiders necessary.
(6) The director of the Division of Corporations and Commercial Code shall accept thefiling of the corporation's articles of incorporation upon notice from the insurance commissionerthat all the applicable requirements of law have been met, including the payment of fees.
(7) (a) When the director of the Division of Corporations and Commercial Code acceptsthe articles of incorporation:
(i) the legal existence of the corporation begins;
(ii) the articles and bylaws become effective; and
(iii) the proposed directors and officers take office.
(b) The certificate is conclusive evidence of compliance with this section, except in aproceeding by the state against the corporation.
(8) Notwithstanding Title 63G, Chapter 2, Government Records Access andManagement Act, the permit applicant may request that any part of the information suppliedunder Subsection (2) be kept confidential. The information shall then be kept confidential unlessthe commissioner expressly finds, after a hearing, that the interest of the corporation or the publicrequires that the information be open to the public.
Amended by Chapter 382, 2008 General Session
