§ 31A-21-314 — Prohibited provisions.

(1) As used in this section:

(1)(a) "Reserving discretionary authority" means a policy provision that:
(1)(a)(i) has the effect of conferring discretion on an insurer, or other claim administrator, to:

(1)(a)(i)(A) determine eligibility for benefits; or
(1)(a)(i)(B) interpret the terms or provisions of the policy, contract, certificate, or agreement; and
(1)(a)(ii) could lead to a deferential standard of review by a reviewing court.
(1)(b) "Reserving discretionary authority" does not include a policy provision that:
(1)(b)(i) informs an insured that, as part of the insurer's routine operations, the insurer applies the terms of the contract for:

(1)(b)(i)(A) making a decision, including making a determination regarding eligibility, or receipt of benefits or claims; or
(1)(b)(i)(B) explaining the insurer's policies and procedures; and
(1)(b)(ii) does not give rise to a deferential standard of review by a reviewing court.
(2) An insurance policy subject to this chapter may not contain a provision:

(2)(a) requiring the insurance policy to be construed according to the laws of another jurisdiction except as necessary to meet the requirements of compulsory insurance laws of other jurisdictions;
(2)(b) depriving Utah courts of jurisdiction over an action against the insurer, except as provided in permissible arbitration provisions;
(2)(c) limiting the right of action against the insurer to less than three years from the date the cause of action accrues; or
(2)(d) for life insurance or accident and health insurance, reserving discretionary authority.
(3) For purposes of Subsection (2)(c), the cause of action accrues on a fidelity bond on the date the insurer first denies all or part of a claim made under the fidelity bond.

Legislative History

Amended by Chapter 351, 2018 General Session