Utah State Regulations & NAIC Insurance Law
Licensing
Any individual applying for a Utah resident producer’s license must be at least 18 years old and must be a Utah resident before submitting an application. Utah’s statute sets the age: an applicant who is a natural person must be at least 18 years of age (Utah Code § 31A-23a-107(4)).
Pre-licensing course and exam
In Utah, an applicant submits a license application only after passing any examination the license requires (Utah Insurance Department). The Commissioner may require an applicant for a license type to pass a line of authority examination, which must reasonably relate to the line of authority for which it is prescribed (Utah Code § 31A-23a-108(1)).
The Commissioner waives the examination for an applicant who applies for a producer license within 90 days of establishing legal residence in Utah, has been licensed for the same line of authority in another state, and is still licensed there or applies within 90 days of that license’s cancellation in good standing (Utah Code § 31A-23a-108(2)).
Fingerprints/background check
The Utah Insurance Department requires every individual applying for a resident insurance license to be fingerprinted, at a Prometric test center, for a criminal history background check by the Utah Bureau of Criminal Identification and the FBI (Utah Insurance Department). The statute lets the Department require an applicant to submit a fingerprint card and consent to a fingerprint background check by both (Utah Code § 31A-23a-105(3)).
Controlled business
Controlled business is insurance written on the producer’s own life, property or interests, or on those of the producer’s family, employer or a business the producer controls.
In Utah, a producer may not receive compensation from an insurer for insuring controlled business unless, during the preceding 12 months, the producer placed other insurance with aggregate premiums exceeding the premiums on the controlled business (Utah Code § 31A-23a-502(2)).
Non-resident license
A producer licensed in another state can obtain a Utah nonresident license without taking Utah’s examination. Under the NAIC’s Producer Licensing Model Act, which most states have adopted in some form, a nonresident receives the license if the person:
- Is currently licensed as a resident, and in good standing, in the home state
- Has applied (the home-state application or the Uniform Application) and paid the fees
- Lives in a home state that grants nonresident licenses to residents of this state on the same basis (reciprocity)
Under the same model, a producer who moves to another state files a change of address, with certification from the new home state, within 30 days. A licensed producer who moves into a state applies for a resident license there within 90 days and does not repeat prelicensing education or the examination for lines already held.
Utah waives its license requirements and issues a nonresident license to an applicant who is licensed, and in good standing, in the home state, has submitted the proper request for licensure and either the home-state application or a completed uniform application, and has paid the fees (Utah Code § 31A-23a-109(1)). The applicant also agrees to be subject to the jurisdiction of the Utah Commissioner and courts on any matter related to the applicant’s insurance activities in Utah (Utah Code § 31A-23a-109(2)).
Temporary license
Most states allow the insurance regulator to issue a temporary license, without an examination, when one is needed to keep an insurance business serviced. Typical cases are:
- The surviving spouse or personal representative of a producer who dies or becomes disabled, to allow time to sell the business or train new people
- A member or employee of a business entity producer, on the death or disability of its designated producer
- The designee of a producer entering active military service
Under the NAIC’s model act, the regulator may also issue one in any other circumstance where it finds that the public interest will best be served.
The regulator may limit what a temporary licensee may do and may require a licensed sponsor who takes responsibility for the temporary licensee’s acts.
Utah may issue a temporary license for up to 180 days without an examination, for example to keep an insurance business serviced after a licensed producer dies or becomes disabled (Utah Code § 31A-23a-114). Utah’s statute names, as its military case, the designee of a licensed agency entering active service in the armed forces of the United States (Utah Code § 31A-23a-114(1)(b)(iii)). The Commissioner may also issue one in any other circumstance where the Commissioner considers the public interest will best be served, may require the temporary licensee to have a suitable sponsor, a licensee who assumes responsibility for all of the temporary licensee’s acts, and may limit the temporary licensee’s authority (Utah Code § 31A-23a-114(1)(a)(ii), (4)(a), (5)(a)).
Military service
A Utah licensee whose license lapses because of military service, voluntary service, or another extenuating circumstance such as a long-term medical disability may request reinstatement of the license and line of authority no later than one year after it lapses, and a waiver of any examination requirement, reinstatement fees, continuing education requirements or other sanction imposed for not complying with renewal procedures (Utah Code § 31A-23a-113(1)(c)(ii)-(iii)). A member of the armed forces stationed in Utah, or a member’s spouse, who holds a current license in good standing from another state or jurisdiction the Department recognizes is exempt from the license fee (Utah Code § 31A-23a-104(6)).
Renewal and reinstatement
A producer license stays in effect only while the producer renews it on schedule: paying the renewal fee and completing continuing education by the due date.
A Utah individual license expires on the last day of the licensee’s birth month every two years: a new license on the last day of the birth month following the two-year anniversary of its issue date, and a renewed license on the last day of the birth month every two years (Utah Admin. Code R590-244-9(2)-(3)). A license not renewed by its expiration date is inactivated, and its agency designations and insurer appointments are terminated (Utah Admin. Code R590-244-9(8)).
A producer who misses the deadline and lets the license lapse may be able to reinstate it without retaking the examination.
A Utah licensee whose license lapses may request reinstatement no more than one year after the day it lapses (Utah Code § 31A-23a-113(1)(c)(i)). The applicant meets each requirement for renewal, including any continuing education requirement, and pays a reinstatement fee; a license not reinstated within one year of its expiration date may not be reinstated, and the person applies as a new applicant (Utah Admin. Code R590-244-10(2)-(3)).
Continuing education
All states, including Utah, have continuing education requirements that must be met to renew an insurance license. In Utah, they apply to every producer or consultant who is an individual, whatever lines of authority the license carries (Utah Code § 31A-23a-202(6)), and an individual title insurance producer has a requirement of its own (Utah Code § 31A-23a-202(3)(b)(iii)). A Utah producer completes 24 credit hours of continuing education for every two-year licensing period, 3 of them ethics courses and at least half through classroom hours of insurance-related instruction (Utah Code § 31A-23a-202(3)(b)(i)). Hours beyond those needed to renew may not be carried over or applied to a later licensing period (Utah Admin. Code R590-142-4(1)(a)). Individuals licensed in the state of Utah must complete continuing education prior to renewing their license. The number of hours required is set by state law and published by the state insurance department.
Notice of change of name or address
A Utah licensee registers with the Commissioner the address and telephone numbers of its principal place of business and a business email address, and an individual also a residence address and telephone number, and notifies the Commissioner within 30 days of a change of any of them (Utah Code § 31A-23a-412(1)).
The model also requires a producer to report to the regulator within 30 days any administrative action taken against the producer in another state or by another government agency, counted from the final disposition, and any criminal prosecution in any jurisdiction, counted from the initial pretrial hearing date. A producer who does business under any name other than their legal name must notify the regulator before using it. In Utah, a licensee must report immediately a revocation, suspension or limitation of its license, or a disciplinary sanction, imposed by another state, and a judgment or injunction based on fraud, deceit, misrepresentation, a violation of insurance law or payment of money (Utah Code § 31A-23a-111(7)). A Utah licensee also reports an administrative action taken against it in another jurisdiction or by another Utah agency within 30 days of the action’s final disposition, and a criminal prosecution, or a civil action involving conduct related to a professional or occupational license, within 30 days of the initial appearance before a court (Utah Code § 31A-23a-105(2)).
Company regulations
An insurance company must be authorized by the Insurance Department to conduct business in Utah. To receive a certificate of authority, the company applies to the Commissioner and files its charter or articles of incorporation, financial statements showing that it meets the state’s capital and surplus requirements, and the other documents and fees the state requires.
Capital and surplus requirement
A company that has been authorized to conduct insurance business in Utah must maintain minimum standards as a corporation. The certificate of authority allows the insurer to conduct business in the state only if it maintains the minimum capital or permanent surplus required. In Utah, a domestic insurer’s certificate of authority does not permit it to transact the types of insurance for which it does not have the required minimum capital, or permanent surplus for a mutual (Utah Code § 31A-5-211(1)(b)). When an insurer falls short, state law decides what happens to the certificate: commonly the regulator must or may suspend or revoke it, sometimes after giving the insurer time to make up the shortfall.
Duties of the insurance commissioner
The Utah Insurance Commissioner is a state executive position in the Utah government. The Commissioner is the chief executive of the Utah Insurance Department, which regulates insurance companies operating in Utah. The Insurance Commissioner is appointed by the governor. The appointment requires the advice and consent of the Senate (Utah Code § 31A-2-102(1)).
The Commissioner is responsible for establishing and enforcing regulations in the Utah insurance market.
Duties of the Commissioner include:
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Investigate all claims and complaints of legal violations relating to insurance.
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If the Commissioner finds that laws have been violated, the findings and supporting documents may be referred for criminal prosecution.
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Monitor transactions of all companies including domestic, foreign, and alien insurance companies.
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Audit the books and records of any resident producer as frequently as necessary. Under the NAIC’s examination model, the regulator may examine any person subject to its authority, nonresident producers included, as often as it considers appropriate. In Utah, the Commissioner may examine the affairs and condition of a licensee when the Commissioner determines that information is needed about a matter related to enforcing the insurance code, and shall examine any other licensee as needed (Utah Code § 31A-2-203(1)(a), (2)(a)).
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Collect all fees associated with producers and insurers.
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Determine and administer fines associated with violations for insurers and producers.
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Issue reports pertaining to the suspension and revocation of licenses of producers and certificates of authority for insurers.
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Approve documentation used by insurance companies such as forms and rates. In Utah, a form need only be filed with the Commissioner before it is used, unless the Commissioner, after a hearing, requires approval by rule or order (Utah Code § 31A-21-201(1)(a), (4)(a)).
Suspend, revoke or non-renew
The Commissioner has the authority to suspend, revoke, or refuse to renew a license for:
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Providing false information on the application for an insurance license.
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Providing information in the license application that is incorrect, misleading, incomplete or materially untrue (Utah Code § 31A-23a-111(5)(b)(ix)).
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Being found guilty of a violation or the noncompliance of insurance regulations and laws…
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Committing fraud while attempting to obtain an insurance license.
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Improperly withholding, misappropriating or converting any money or property received in the course of doing insurance business. In Utah, a licensee other than a nonresident may not commingle trust funds, the money it receives for forwarding to insurers or insureds, with its own money or with money held in any other capacity, except amounts necessary to pay bank charges and money paid by insureds that belongs in part to the licensee as a fee or commission (Utah Code § 31A-23a-409(1)(a)-(b), (7)).
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Providing false information in reference to the terms and conditions of an insurance contract.
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Having been convicted of a felony. In Utah, a conviction of, or a plea in abeyance to, a misdemeanor involving fraud, misrepresentation, theft or dishonesty is also a ground (Utah Code § 31A-23a-111(5)(b)(xiv)).
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Having admitted or been found to have committed any insurance unfair trade practice or fraud.
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Having engaged in activities of a fraudulent nature which allowed the person to involve themselves in dishonest, coercive, untrustworthy, and financially irresponsible practices.
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Having had a prior insurance license revoked or suspended in a state other than Utah. Under the NAIC’s model act, a license denied in another state is also a ground.
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Using another person’s identity and forging their name on an insurance application.
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Being found guilty of using unethical practices or cheating on an examination for an insurance license.
Cease and desist
If the Commissioner finds that a producer has violated the state’s insurance laws, the Commissioner may order the producer to cease and desist. A cease and desist order does not suspend or revoke the recipient’s registration, but it does require the recipient to stop or limit the activity addressed in the order.
Hearing and penalties
A person facing action by the Commissioner is entitled to notice and an opportunity for a hearing, within time limits set by Utah law, and may ask a court to review the final order.
In Utah, an informal enforcement proceeding begins with a Notice of Agency Action and Order, which becomes final 15 days after service unless the respondent asks in writing for a hearing within that time (Utah Admin. Code R590-160-7(1)(c)); an emergency order is effective immediately (Utah Code § 63G-4-502), and a petition for administrative review, rehearing or judicial review does not stay an order of the Commissioner (Utah Code § 31A-2-306.5(1)). A party may ask the Commissioner for agency review of an order within 30 days of its date (Utah Admin. Code R590-160-8(1)(a)).
A violation of the insurance laws can bring a civil penalty in addition to action against a license. State law sets the maximum, usually per violation and often with a cap on the total, and a higher tier commonly applies to a violation that was knowing or flagrant. Some violations are also crimes.
In Utah, the Commissioner may order an individual producer to forfeit up to $2,500 for each violation, and any other person up to $5,000, in addition to forfeiting up to twice any profit gained from the violation (Utah Code § 31A-2-308(1)). Intentionally violating an insurance statute or an order of the Commissioner is a class B misdemeanor, with a fine of up to $5,000 for a person other than a corporation and $10,000 for a corporation, and an individual may also be imprisoned for up to one year, unless the title provides another criminal penalty (Utah Code § 31A-2-308(9)).
Unfair claims settlement practices
Under the NAIC’s model act, these practices are violations when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. In Utah, each of three acts is itself an unfair claim settlement practice: knowingly misrepresenting material facts or policy provisions at issue in a claim, attempting to use a policy application the insurer altered without the insured’s notice, knowledge or consent as the basis for settling or refusing to settle a claim, and failing to settle a claim promptly under one part of the coverage to influence settlements under other parts; the others Utah lists, such as failing to promptly explain the basis for a denial or a compromise offer, are unfair claim settlement practices if committed with such frequency as to indicate a general business practice (Utah Code § 31A-26-303(2)-(3)).
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Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form.
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Failing, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such actions.
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Refusing to pay claims without conducting a reasonable investigation (Utah Admin. Code R590-191-8(3)).
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Attempting to use a policy application that was altered by the insurer without notice to, or knowledge or consent of, the insured as the basis for settling or refusing to settle a claim (Utah Code § 31A-26-303(2)(b)).
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Attempting to settle or settling a claim for less than the amount a reasonable person would believe the insured or beneficiary was entitled to by reference to written or printed advertising material accompanying or made part of an application.
Policy forms
Insurers file their policy forms with the Commissioner.
In Utah, a policy form may not be used, sold or offered for sale until it is filed with the Commissioner, and the insurer is responsible for the form’s compliance with the insurance code and the Commissioner’s rules (Utah Code § 31A-21-201(1)(a), (2)). The Department’s filing rules make a form a file and use filing, used after it is filed, for life insurance (Utah Admin. Code R590-226-6(1)(a)), accident and health insurance (Utah Admin. Code R590-220-7(1)(a)) and property and casualty insurance (Utah Admin. Code R590-225-7(1)(a)). The Commissioner may prohibit a form’s use at any time on findings the statute lists, and, after a hearing, may require by rule or order that a form be approved before an insurer uses it (Utah Code § 31A-21-201(3)(a), (4)(a)).
Under the usual conformity rule, which many states’ insurance codes write into law, a policy provision that conflicts with state law does not make the policy invalid: the policy is read as amended to conform to the law. In Utah, an otherwise valid policy, rider or endorsement issued after July 1, 1986, that contains a condition or provision not in compliance with the insurance code is not made invalid; the condition or provision is construed and applied as if the policy complied (Utah Code § 31A-21-107(2)).
The interest rate an insurer may charge on a life insurance policy loan is also limited by state law.
Record maintenance
A producer keeps records of each transaction (the policies placed, the insureds, the premiums received and any changes) and makes them available for the Commissioner’s inspection.
Utah requires a licensee to keep the books and records of its transactions, available to the Commissioner on reasonable notice, for the period the Commissioner sets by rule, but never less than three calendar years in addition to the current calendar year (Utah Code § 31A-23a-412). They are kept at the principal place of business registered with the Commissioner, or can be obtained there immediately from a central storage place or by computer, and include a record of each insurance contract procured by or issued through the licensee, with the names of insurers and insureds, the amount of premium and commissions or other compensation, and the subject of the insurance (Utah Code § 31A-23a-412(2)-(3)).
Fraudulent producer representation
In Utah, a person may not perform, offer to perform or advertise any service as a producer without a valid individual or agency license, which includes at least one license type and one line of authority (Utah Code § 31A-23a-103(1)(a)-(b)), and a person who is or should be licensed may not make any communication that contains false or misleading information relating to any licensee (Utah Code § 31A-23a-402(1)(a)(i)). This includes any public communication, such as advertisements, letterheads, circulars, business cards, and other methods of representation.
A producer found guilty of conducting business in Utah in any line of insurance for which they are not properly licensed may have any other insurance license suspended or revoked.
Misrepresentation
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Misrepresentation involving the creation or distribution of policies, quotes, and illustrations designed to provide inaccurate information about the terms and conditions of a policy is prohibited. Under the NAIC’s model act, any estimate, illustration or statement that misrepresents a policy’s benefits, advantages, conditions or terms is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice.
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Providing inaccurate or incomplete information or comparisons regarding the benefits of a policy is an example of misrepresentation.
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Providing inaccurate or incomplete information for the purpose of inducing, or tending to induce, the lapse, exchange, conversion, forfeiture, or surrender of a policy is a violation as well (twisting).
False advertising
Making, publishing or circulating an advertisement, announcement or statement about the business of insurance that is untrue, deceptive or misleading is an unfair trade practice under state law, based on the NAIC’s model act. The medium does not matter: the rule reaches newspapers, magazines, radio and television, and also notices, circulars, pamphlets, letters, posters and any other way of placing the statement before the public. Under the model act, such a statement is an unfair trade practice when committed flagrantly and in conscious disregard of the law, or often enough to indicate a general business practice. Some state laws adopt this condition, and others reach a single such statement.
Defamation
Defamation of an insurer is an unfair trade practice under state law, based on the NAIC’s model act: making, publishing or circulating an oral or written statement that is false, or maliciously critical of or derogatory to the financial condition of an insurer, and that is calculated to injure such insurer. Some states’ laws reach further, to a statement calculated to injure any person engaged in the business of insurance. Spreading an untrue rumor that a competing insurer is about to fail is the classic example.
Boycott, coercion and intimidation
Entering into an agreement to commit, or by concerted action committing, any act of boycott, coercion or intimidation that results or tends to result in unreasonable restraint of, or monopoly in, the business of insurance is prohibited. Utah’s rule is broader: it reaches a person’s own act of boycott, coercion or intimidation as well as an agreement to take part in one, and also such an act that results in an applicant purchasing or replacing an insurance contract (Utah Code § 31A-23a-402(4)(b)).
False financial statements
Any licensed producer who makes false statements containing any information that involves inaccurate material facts or false statements on an application for insurance is in violation of the state’s unfair trade practices law. The rule is not limited to licensed producers: under the NAIC’s model act, it is an unfair trade practice for an insurer or any person engaged in the business of insurance to make false or fraudulent statements or representations on or relative to an application for a policy, for the purpose of obtaining a fee, commission, money or other benefit from any provider or individual person.
Illegal inducements
Offering anything of value not specified in the policy (money, a service, a favor or a gift) as an inducement to buy insurance is prohibited unless state law expressly allows it, and any agreement made as part of the sale must be written into the policy.
A Utah producer, consultant or other licensee may not induce a person to enter into, continue or terminate an insurance contract by offering a benefit that is not specified in, or directly related to, the contract, and a prohibited inducement includes providing a rebate, reward or incentive, except as Section 31A-22-647 permits (Utah Code § 31A-23a-402.5(1)(a), (5)(a)(i)). The statute expressly allows an insurer to reduce premiums because of expense savings (Utah Code § 31A-23a-402.5(3)(a)).
In Utah, a licensee may engage in a usual kind of social courtesy if receiving it is not conditioned on a quote or the purchase of a particular insurance product, and a gift or meal worth no more than $100 per person is presumed to be such a courtesy; a gift or meal worth no more than $10 may be conditioned on receiving a quote (Utah Code § 31A-23a-402.5(4)(a), (7)).
Unfair discrimination
Unfair discrimination is treating people or risks that present the same hazard differently. The NAIC’s model act, on which state unfair trade practices laws are based, prohibits:
- Unfair discrimination between individuals of the same class and equal expectation of life in life insurance and annuity rates, dividends, benefits or terms
- Unfair discrimination between individuals of the same class and essentially the same hazard in health insurance premiums, benefits or terms
- Refusing, limiting or canceling coverage because of a person’s sex, marital status, race, religion or national origin
- In property and casualty insurance, refusing or limiting coverage solely because of a risk’s geographic location, unless sound underwriting and actuarial principles justify it, or solely because the applicant or insured is physically or mentally impaired
Many states also expressly forbid refusing or limiting coverage solely because a person is blind or partially blind. In Utah, an insurer may not refuse to insure, refuse to continue to insure, limit coverage or charge a higher rate for the same coverage because of blindness, partial blindness, or a physical or mental impairment, unless the decision rests on sound actuarial principles or reasonably anticipated loss experience (Utah Admin. Code R590-129-4(1)).
Errors & omissions
Errors & Omissions (E&O) insurance is a type of professional liability insurance that protects insurance agents if they are sued for negligent performance of their duties. E&O covers negligence and unintentional mistakes that cause financial harm to clients. It does not cover intentional misconduct, criminal acts, or regulatory fines.
Rebating
In Utah, rebating is a prohibited inducement: a producer, consultant or other licensee may not induce a person to enter into, continue or terminate an insurance contract by providing a rebate, reward or incentive, except as Section 31A-22-647 permits (Utah Code § 31A-23a-402.5(1)(a), (5)(a)(i)).
Sharing commission
The splitting or sharing of commissions with a licensed producer is allowed. Both parties must be licensed in the line of business in which the proposed commission is to be split. Under the NAIC’s model act, a commission may also be paid to an insurance agency, or to a person who does not sell, solicit or negotiate insurance. In Utah, a licensee or insurer may pay consideration only to a person it knows is licensed in Utah as to the particular type of insurance, and a person may accept commission compensation only if so licensed, but a commission may be paid to an agency, or to a person who does not sell, solicit or negotiate insurance in Utah, unless the payment would be an inducement or commission rebate (Utah Code § 31A-23a-504(1), (3)(c)).
Twisting
Providing false information or expressing derogatory ideas about the financial conditions of a competitor company with the intent to lapse or surrender an existing policy is a violation of the law. Any written or oral statements used to induce the lapse, termination, exchange, or surrender of an insurance contract based on inaccurate information is prohibited.
Under the NAIC’s model act, twisting is a misrepresentation made to induce a policyholder to lapse, forfeit, surrender, exchange or convert a policy. A false or maliciously critical statement about a competing insurer’s finances, made to injure it, is defamation.
Unfair marketing practices
The Insurance Department is responsible for establishing minimum standards for the full and fair disclosure of policy content. The Department also requires the standardization and simplification of the terms used to describe insurance coverage. Advertising may not involve the following:
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Any statement or implication that an individual, group of individuals, society, association or other organization has approved or endorsed an insurer or an insurance policy, unless it has and the advertisement discloses any proprietary relationship between the organization and the insurer (Utah Admin. Code R590-130-8(3)(a)), and any implication that a state or federal agency or division has approved, accredited or endorsed an insurer’s policy forms or advertisement (Utah Admin. Code R590-130-8(5)(a)).
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Any representation or implication that an insurer’s claim settlement practice is liberal, generous or similar, or is or will be beyond the contract’s actual terms (Utah Admin. Code R590-130-9(1)), and any other false or misleading information relating to an insurer or an insurance product, such as how quickly claims are paid (Utah Code § 31A-23a-402(1)(a)(i)).
Gramm-Leach Bliley Act (GLBA)
This law repealed the parts of the Glass-Steagall Act of 1933 that kept commercial banks and securities firms apart, and allowed the consolidation of commercial banks, investment institutions and insurance companies. GLBA established a framework of responsibilities of federal and state regulators for these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.
McCarran-Ferguson Act
Federal law signed in 1945 in which Congress declared that the insurance industry would be regulated at the state level. Grants insurers a limited exemption from federal antitrust legislation. Since 2021 the exemption does not cover the business of health insurance, apart from narrow activities such as sharing historical loss data (15 U.S.C. § 1013(c)).
National Association of Insurance Commissioners (NAIC)
The U.S. standard-setting and regulatory support organization is created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.
Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681) regulates consumer reporting agencies and the use of consumer reports, such as credit reports, MIB records and investigative reports, including in insurance underwriting.
- When an insurer requests an investigative consumer report, it must disclose that to the consumer within 3 days of the request
- When an insurer takes adverse action based on a consumer report, it must notify the consumer and identify the reporting agency. The consumer then has 60 days to request a free copy of the report and may dispute inaccurate information
Privacy Act of 1974
The federal Privacy Act of 1974 governs how federal agencies handle personal information. It does not apply to private insurers. An insurer’s use of an applicant’s personal information is governed by the FCRA, the Gramm-Leach-Bliley Act and state insurance privacy law.
In states that adopted the NAIC’s Insurance Information and Privacy Protection Model Act, an authorization to collect personal information signed with an application is valid for no more than 30 months for life, health or disability insurance and one year for property or casualty insurance.
Under the same model act, a person told of an adverse underwriting decision may ask in writing, within 90 business days of the notice, for the specific reasons for it, which must be given within 21 business days of the request.
Telemarketing
The National Do Not Call Registry is a list of telephone numbers whose owners do not want to receive telemarketing calls. Telemarketers may not call registered numbers without the person’s permission or an established business relationship, and unsolicited sales calls:
- May be made only between 8 a.m. and 9 p.m. in the recipient’s local time under federal rules; Utah also bars a telephone solicitation to a home or cell phone without prior express consent on a Sunday or a legal holiday (Utah Code § 13-25a-103(3))
- Must give the caller’s name, the name of the company the call is made for, and a telephone number or address at which that company can be contacted
CAN-SPAM
A commercial email must:
- Be identified clearly as an advertisement
- Carry accurate header information and a subject line that is not deceptive
- Include the sender’s valid physical postal address
- Offer a way to opt out, and the sender must honor an opt-out within 10 business days