State Codes and Statutes

Statutes > Utah > Title-31a > Chapter-28 > 31a-28-109

31A-28-109. Assessments.
(1) (a) For the purpose of providing the funds necessary to carry out the powers andduties of the association, the board of directors shall assess the member insurers, separately foreach class or subclass, at the time and for the amounts that the board of directors finds necessary.
(b) Member insurer liability for an assessment is established as of the coverage date.
(c) Subject to Subsection (1)(d), a called assessment:
(i) is due not less than 30 days after prior written notice to the member insurer; and
(ii) shall accrue interest at 10% per annum on and after the due date.
(d) Notwithstanding Subsection (1)(c), the association may:
(i) assess the association's members as of the coverage date; and
(ii) defer the collection of the assessment described in Subsection (1)(d)(i).
(e) An assessment:
(i) has the force and effect of a judgment lien against the member insurer; and
(ii) may not be extinguished until paid.
(2) The two classes of assessment are described in Subsections (2)(a) and (2)(b).
(a) A Class A assessment shall be authorized and called for the purpose of meetingadministrative and legal costs and other expenses. A Class A assessment may be authorized andcalled whether or not related to a particular impaired or insolvent insurer.
(b) A Class B assessment shall be authorized and called to the extent necessary to carryout the powers and duties of the association under Section 31A-28-108 with regard to animpaired or an insolvent insurer.
(3) (a) (i) The amount of a Class A assessment:
(A) shall be determined by the board of directors; and
(B) may be authorized and called on a pro rata or non-pro rata basis.
(ii) If the Class A assessment is pro rata, the board of directors may credit the assessmentagainst future Class B assessments.
(iii) The total of the non-pro rata assessments may not exceed $300 per member insurerin any one calendar year.
(b) The amount of a Class B assessment shall be allocated for assessment purposesamong subclasses pursuant to an allocation formula that may be based on:
(i) the premiums or reserves of the impaired or insolvent insurer; or
(ii) any other standard determined by the board of directors in the board of directors' solediscretion as being fair and reasonable under the circumstances.
(c) (i) A Class B assessment against a member insurer for the life insurance subclass, theannuity subclass, and the unallocated annuity subclass shall be in the proportion that thepremiums received on business in this state by the member insurer on policies or contractsincluded in the subclass for the three most recent calendar years for which information isavailable preceding the year which includes the coverage date bears to the premiums received onbusiness in this state for the same period by the assessed member insurers.
(ii) A Class B assessment against a member insurer for an accident and health insurancesubclass shall be in the proportion that the premiums received on business in this state by eachassessed member insurer on policies or contracts included in the subclass for the most recentcalendar year for which information is available preceding the year in which the assessment ismade bears to the premiums received on business in this state on policies or contracts included inthe subclass for that calendar year by the assessed member insurers.

(d) Assessments for funds to meet the requirements of the association with respect to animpaired or insolvent insurer may not be authorized or called until necessary to implement thepurposes of this part.
(e) Classification of assessments and premiums under Subsection (3)(b) and computationof assessments under this Subsection (3) shall be made with a reasonable degree of accuracy,recognizing that exact determinations may not always be possible.
(f) The association shall notify each member insurer of its anticipated pro rata share of anauthorized assessment not yet called within 180 days after the day on which the assessment isauthorized.
(4) (a) The association may abate or defer, in whole or in part, the assessment of amember insurer if, in the opinion of the board of directors, payment of the assessment wouldendanger the ability of the member insurer to fulfill its contractual obligations.
(b) If an assessment against a member insurer is abated or deferred in whole or in partunder Subsection (4)(a), the amount by which the assessment is abated or deferred may beassessed against the other member insurers in a manner consistent with the basis for assessmentsset forth in this section.
(c) Once a condition that caused a deferral is removed or rectified, the member insurershall pay the assessments that were deferred pursuant to a repayment plan approved by theassociation.
(5) (a) (i) Subject to Subsection (5)(b), the total of the assessments authorized by theassociation on a member insurer for each subclass may not in any one calendar year exceed 2%of that member's total average annual assessable premium in that subclass as defined inSubsection (3).
(ii) If two or more assessments are authorized in one calendar year with respect to one ormore insurers that become impaired or insolvent in different calendar years, the average annualpremiums for purposes of the aggregate assessment percentage limitation in Subsection (5)(a)(i)shall be equal and limited to the highest of the total average annual assessable premiums of thedifferent calendar year periods involved in the assessment or assessments.
(iii) If the maximum assessment together with the other assets of the association do notprovide in one year an amount sufficient to carry out the responsibilities of the association, thenecessary additional funds shall be assessed as soon after as permitted by this part.
(b) The board of directors may provide in the plan of operation a method of allocatingfunds among claims, whether relating to one or more impaired or insolvent insurers, when themaximum assessment will be insufficient to cover anticipated claims.
(c) If the maximum assessment for the life insurance or annuity subclass in any one yeardoes not provide an amount sufficient to carry out the responsibilities of the association, theboard of directors shall assess the other of the subclasses of the life insurance and annuity classfor the necessary additional amount:
(i) pursuant to Subsection (3)(b); and
(ii) subject to the maximum stated in Subsection (5)(a).
(6) (a) The board of directors may, by an equitable method established in the plan ofoperation, refund to member insurers in proportion to the contribution of each insurer to thatsubclass the amount by which the assets of the subclass exceed the amount the board of directorsfinds is necessary to carry out the obligations of the association with regard to that subclass,including assets accruing from:

(i) assignment;
(ii) subrogation;
(iii) net realized gains; and
(iv) income from investments.
(b) Notwithstanding Subsection (6)(a), a reasonable amount may be retained to providefunds for the continuing expenses of the association and for future losses.
(7) A member insurer, in determining its premium rates and policyowner dividends as toany kind of insurance within the scope of this part, may consider the amount reasonablynecessary to meet its assessment obligations under this part.
(8) (a) The association shall issue to each insurer paying an assessment under this part,other than a Class A assessment, a certificate of contribution, in a form approved by thecommissioner, for the amount of the assessment paid.
(b) The outstanding certificates described in Subsection (8)(a) shall be of equal dignityand priority without reference to amounts or dates of issue.
(c) (i) A certificate of contribution described in Subsection (8)(a) may be shown by theinsurer in its financial statement as an asset in the amount of the certificate of contribution lessthe amount by which the insurer's premium taxes have already been reduced with respect to thecertificate.
(ii) For good cause shown, the commissioner may order the insurer to show a differentamount in its financial statement than the amount under Subsection (8)(c)(i).
(9) (a) The association may request information from a member insurer to aid in theexercise of the association's power under this part.
(b) A member insurer shall comply promptly with a request of the association under thisSubsection (9).

Amended by Chapter 292, 2010 General Session

State Codes and Statutes

Statutes > Utah > Title-31a > Chapter-28 > 31a-28-109

31A-28-109. Assessments.
(1) (a) For the purpose of providing the funds necessary to carry out the powers andduties of the association, the board of directors shall assess the member insurers, separately foreach class or subclass, at the time and for the amounts that the board of directors finds necessary.
(b) Member insurer liability for an assessment is established as of the coverage date.
(c) Subject to Subsection (1)(d), a called assessment:
(i) is due not less than 30 days after prior written notice to the member insurer; and
(ii) shall accrue interest at 10% per annum on and after the due date.
(d) Notwithstanding Subsection (1)(c), the association may:
(i) assess the association's members as of the coverage date; and
(ii) defer the collection of the assessment described in Subsection (1)(d)(i).
(e) An assessment:
(i) has the force and effect of a judgment lien against the member insurer; and
(ii) may not be extinguished until paid.
(2) The two classes of assessment are described in Subsections (2)(a) and (2)(b).
(a) A Class A assessment shall be authorized and called for the purpose of meetingadministrative and legal costs and other expenses. A Class A assessment may be authorized andcalled whether or not related to a particular impaired or insolvent insurer.
(b) A Class B assessment shall be authorized and called to the extent necessary to carryout the powers and duties of the association under Section 31A-28-108 with regard to animpaired or an insolvent insurer.
(3) (a) (i) The amount of a Class A assessment:
(A) shall be determined by the board of directors; and
(B) may be authorized and called on a pro rata or non-pro rata basis.
(ii) If the Class A assessment is pro rata, the board of directors may credit the assessmentagainst future Class B assessments.
(iii) The total of the non-pro rata assessments may not exceed $300 per member insurerin any one calendar year.
(b) The amount of a Class B assessment shall be allocated for assessment purposesamong subclasses pursuant to an allocation formula that may be based on:
(i) the premiums or reserves of the impaired or insolvent insurer; or
(ii) any other standard determined by the board of directors in the board of directors' solediscretion as being fair and reasonable under the circumstances.
(c) (i) A Class B assessment against a member insurer for the life insurance subclass, theannuity subclass, and the unallocated annuity subclass shall be in the proportion that thepremiums received on business in this state by the member insurer on policies or contractsincluded in the subclass for the three most recent calendar years for which information isavailable preceding the year which includes the coverage date bears to the premiums received onbusiness in this state for the same period by the assessed member insurers.
(ii) A Class B assessment against a member insurer for an accident and health insurancesubclass shall be in the proportion that the premiums received on business in this state by eachassessed member insurer on policies or contracts included in the subclass for the most recentcalendar year for which information is available preceding the year in which the assessment ismade bears to the premiums received on business in this state on policies or contracts included inthe subclass for that calendar year by the assessed member insurers.

(d) Assessments for funds to meet the requirements of the association with respect to animpaired or insolvent insurer may not be authorized or called until necessary to implement thepurposes of this part.
(e) Classification of assessments and premiums under Subsection (3)(b) and computationof assessments under this Subsection (3) shall be made with a reasonable degree of accuracy,recognizing that exact determinations may not always be possible.
(f) The association shall notify each member insurer of its anticipated pro rata share of anauthorized assessment not yet called within 180 days after the day on which the assessment isauthorized.
(4) (a) The association may abate or defer, in whole or in part, the assessment of amember insurer if, in the opinion of the board of directors, payment of the assessment wouldendanger the ability of the member insurer to fulfill its contractual obligations.
(b) If an assessment against a member insurer is abated or deferred in whole or in partunder Subsection (4)(a), the amount by which the assessment is abated or deferred may beassessed against the other member insurers in a manner consistent with the basis for assessmentsset forth in this section.
(c) Once a condition that caused a deferral is removed or rectified, the member insurershall pay the assessments that were deferred pursuant to a repayment plan approved by theassociation.
(5) (a) (i) Subject to Subsection (5)(b), the total of the assessments authorized by theassociation on a member insurer for each subclass may not in any one calendar year exceed 2%of that member's total average annual assessable premium in that subclass as defined inSubsection (3).
(ii) If two or more assessments are authorized in one calendar year with respect to one ormore insurers that become impaired or insolvent in different calendar years, the average annualpremiums for purposes of the aggregate assessment percentage limitation in Subsection (5)(a)(i)shall be equal and limited to the highest of the total average annual assessable premiums of thedifferent calendar year periods involved in the assessment or assessments.
(iii) If the maximum assessment together with the other assets of the association do notprovide in one year an amount sufficient to carry out the responsibilities of the association, thenecessary additional funds shall be assessed as soon after as permitted by this part.
(b) The board of directors may provide in the plan of operation a method of allocatingfunds among claims, whether relating to one or more impaired or insolvent insurers, when themaximum assessment will be insufficient to cover anticipated claims.
(c) If the maximum assessment for the life insurance or annuity subclass in any one yeardoes not provide an amount sufficient to carry out the responsibilities of the association, theboard of directors shall assess the other of the subclasses of the life insurance and annuity classfor the necessary additional amount:
(i) pursuant to Subsection (3)(b); and
(ii) subject to the maximum stated in Subsection (5)(a).
(6) (a) The board of directors may, by an equitable method established in the plan ofoperation, refund to member insurers in proportion to the contribution of each insurer to thatsubclass the amount by which the assets of the subclass exceed the amount the board of directorsfinds is necessary to carry out the obligations of the association with regard to that subclass,including assets accruing from:

(i) assignment;
(ii) subrogation;
(iii) net realized gains; and
(iv) income from investments.
(b) Notwithstanding Subsection (6)(a), a reasonable amount may be retained to providefunds for the continuing expenses of the association and for future losses.
(7) A member insurer, in determining its premium rates and policyowner dividends as toany kind of insurance within the scope of this part, may consider the amount reasonablynecessary to meet its assessment obligations under this part.
(8) (a) The association shall issue to each insurer paying an assessment under this part,other than a Class A assessment, a certificate of contribution, in a form approved by thecommissioner, for the amount of the assessment paid.
(b) The outstanding certificates described in Subsection (8)(a) shall be of equal dignityand priority without reference to amounts or dates of issue.
(c) (i) A certificate of contribution described in Subsection (8)(a) may be shown by theinsurer in its financial statement as an asset in the amount of the certificate of contribution lessthe amount by which the insurer's premium taxes have already been reduced with respect to thecertificate.
(ii) For good cause shown, the commissioner may order the insurer to show a differentamount in its financial statement than the amount under Subsection (8)(c)(i).
(9) (a) The association may request information from a member insurer to aid in theexercise of the association's power under this part.
(b) A member insurer shall comply promptly with a request of the association under thisSubsection (9).

Amended by Chapter 292, 2010 General Session


State Codes and Statutes


Back To Homepage

State Codes and Statutes

Statutes > Utah > Title-31a > Chapter-28 > 31a-28-109

31A-28-109. Assessments.
(1) (a) For the purpose of providing the funds necessary to carry out the powers andduties of the association, the board of directors shall assess the member insurers, separately foreach class or subclass, at the time and for the amounts that the board of directors finds necessary.
(b) Member insurer liability for an assessment is established as of the coverage date.
(c) Subject to Subsection (1)(d), a called assessment:
(i) is due not less than 30 days after prior written notice to the member insurer; and
(ii) shall accrue interest at 10% per annum on and after the due date.
(d) Notwithstanding Subsection (1)(c), the association may:
(i) assess the association's members as of the coverage date; and
(ii) defer the collection of the assessment described in Subsection (1)(d)(i).
(e) An assessment:
(i) has the force and effect of a judgment lien against the member insurer; and
(ii) may not be extinguished until paid.
(2) The two classes of assessment are described in Subsections (2)(a) and (2)(b).
(a) A Class A assessment shall be authorized and called for the purpose of meetingadministrative and legal costs and other expenses. A Class A assessment may be authorized andcalled whether or not related to a particular impaired or insolvent insurer.
(b) A Class B assessment shall be authorized and called to the extent necessary to carryout the powers and duties of the association under Section 31A-28-108 with regard to animpaired or an insolvent insurer.
(3) (a) (i) The amount of a Class A assessment:
(A) shall be determined by the board of directors; and
(B) may be authorized and called on a pro rata or non-pro rata basis.
(ii) If the Class A assessment is pro rata, the board of directors may credit the assessmentagainst future Class B assessments.
(iii) The total of the non-pro rata assessments may not exceed $300 per member insurerin any one calendar year.
(b) The amount of a Class B assessment shall be allocated for assessment purposesamong subclasses pursuant to an allocation formula that may be based on:
(i) the premiums or reserves of the impaired or insolvent insurer; or
(ii) any other standard determined by the board of directors in the board of directors' solediscretion as being fair and reasonable under the circumstances.
(c) (i) A Class B assessment against a member insurer for the life insurance subclass, theannuity subclass, and the unallocated annuity subclass shall be in the proportion that thepremiums received on business in this state by the member insurer on policies or contractsincluded in the subclass for the three most recent calendar years for which information isavailable preceding the year which includes the coverage date bears to the premiums received onbusiness in this state for the same period by the assessed member insurers.
(ii) A Class B assessment against a member insurer for an accident and health insurancesubclass shall be in the proportion that the premiums received on business in this state by eachassessed member insurer on policies or contracts included in the subclass for the most recentcalendar year for which information is available preceding the year in which the assessment ismade bears to the premiums received on business in this state on policies or contracts included inthe subclass for that calendar year by the assessed member insurers.

(d) Assessments for funds to meet the requirements of the association with respect to animpaired or insolvent insurer may not be authorized or called until necessary to implement thepurposes of this part.
(e) Classification of assessments and premiums under Subsection (3)(b) and computationof assessments under this Subsection (3) shall be made with a reasonable degree of accuracy,recognizing that exact determinations may not always be possible.
(f) The association shall notify each member insurer of its anticipated pro rata share of anauthorized assessment not yet called within 180 days after the day on which the assessment isauthorized.
(4) (a) The association may abate or defer, in whole or in part, the assessment of amember insurer if, in the opinion of the board of directors, payment of the assessment wouldendanger the ability of the member insurer to fulfill its contractual obligations.
(b) If an assessment against a member insurer is abated or deferred in whole or in partunder Subsection (4)(a), the amount by which the assessment is abated or deferred may beassessed against the other member insurers in a manner consistent with the basis for assessmentsset forth in this section.
(c) Once a condition that caused a deferral is removed or rectified, the member insurershall pay the assessments that were deferred pursuant to a repayment plan approved by theassociation.
(5) (a) (i) Subject to Subsection (5)(b), the total of the assessments authorized by theassociation on a member insurer for each subclass may not in any one calendar year exceed 2%of that member's total average annual assessable premium in that subclass as defined inSubsection (3).
(ii) If two or more assessments are authorized in one calendar year with respect to one ormore insurers that become impaired or insolvent in different calendar years, the average annualpremiums for purposes of the aggregate assessment percentage limitation in Subsection (5)(a)(i)shall be equal and limited to the highest of the total average annual assessable premiums of thedifferent calendar year periods involved in the assessment or assessments.
(iii) If the maximum assessment together with the other assets of the association do notprovide in one year an amount sufficient to carry out the responsibilities of the association, thenecessary additional funds shall be assessed as soon after as permitted by this part.
(b) The board of directors may provide in the plan of operation a method of allocatingfunds among claims, whether relating to one or more impaired or insolvent insurers, when themaximum assessment will be insufficient to cover anticipated claims.
(c) If the maximum assessment for the life insurance or annuity subclass in any one yeardoes not provide an amount sufficient to carry out the responsibilities of the association, theboard of directors shall assess the other of the subclasses of the life insurance and annuity classfor the necessary additional amount:
(i) pursuant to Subsection (3)(b); and
(ii) subject to the maximum stated in Subsection (5)(a).
(6) (a) The board of directors may, by an equitable method established in the plan ofoperation, refund to member insurers in proportion to the contribution of each insurer to thatsubclass the amount by which the assets of the subclass exceed the amount the board of directorsfinds is necessary to carry out the obligations of the association with regard to that subclass,including assets accruing from:

(i) assignment;
(ii) subrogation;
(iii) net realized gains; and
(iv) income from investments.
(b) Notwithstanding Subsection (6)(a), a reasonable amount may be retained to providefunds for the continuing expenses of the association and for future losses.
(7) A member insurer, in determining its premium rates and policyowner dividends as toany kind of insurance within the scope of this part, may consider the amount reasonablynecessary to meet its assessment obligations under this part.
(8) (a) The association shall issue to each insurer paying an assessment under this part,other than a Class A assessment, a certificate of contribution, in a form approved by thecommissioner, for the amount of the assessment paid.
(b) The outstanding certificates described in Subsection (8)(a) shall be of equal dignityand priority without reference to amounts or dates of issue.
(c) (i) A certificate of contribution described in Subsection (8)(a) may be shown by theinsurer in its financial statement as an asset in the amount of the certificate of contribution lessthe amount by which the insurer's premium taxes have already been reduced with respect to thecertificate.
(ii) For good cause shown, the commissioner may order the insurer to show a differentamount in its financial statement than the amount under Subsection (8)(c)(i).
(9) (a) The association may request information from a member insurer to aid in theexercise of the association's power under this part.
(b) A member insurer shall comply promptly with a request of the association under thisSubsection (9).

Amended by Chapter 292, 2010 General Session


Disclaimer
There is no confidential attorney-client relationship formed by using Laws.com website and information provided on this site is not legal advice. For legal advice, please contact your attorney. Attorneys listed on this website are not referred or endorsed by this website. By using Laws.com you agree to Laws.com Terms Of Use.
Copyright © 2017 Laws.com | All rights reserved

Loading..

Close Window

Loading, Please Wait!

This may take a second or two.