Section 314 – Prohibited provisions.

• (1) As used in this section:
  • (a) “Reserving discretionary authority” means a policy provision that:
    • (i) has the effect of conferring discretion on an insurer, or other claim administrator, to:
      • (A) determine eligibility for benefits; or
      • (B) interpret the terms or provisions of the policy, contract, certificate, or agreement; and
    • (ii) could lead to a deferential standard of review by a reviewing court.
  • (b) “Reserving discretionary authority” does not include a policy provision that:
    • (i) informs an insured that, as part of the insurer’s routine operations, the insurer applies the terms of the contract for:
      • (A) making a decision, including making a determination regarding eligibility, or receipt of benefits or claims; or
      • (B) explaining the insurer’s policies and procedures; and
    • (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:
  • (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;
  • (b) depriving Utah courts of jurisdiction over an action against the insurer, except as provided in permissible arbitration provisions;
  • (c) limiting the right of action against the insurer to less than three years from the date the cause of action accrues; or
  • (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.

Amended by Chapter 351, 2018 General Session