Single risk limitation.

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  • (1) This section applies to all lines of insurance, including ocean marine and reinsurance, except:
    • (a) title insurance;
    • (b) workers' compensation insurance;
    • (c) occupational disease insurance;
    • (d) employers' liability insurance; and
    • (e) health insurance.
  • (2)
    • (a) Except as provided under Subsections (3) and (4) and under Section 31A-20-109, an insurer authorized to do an insurance business in Utah may not expose itself to loss on a single risk in an amount exceeding 10% of its capital and surplus.
    • (b) The commissioner may adopt rules to calculate surplus under this section.
    • (c) An insurer may deduct the portion of a risk reinsured by a reinsurance contract worthy of a reserve credit under Sections 31A-17-404 through 31A-17-404.4 in determining the limitation of risk under this section.
  • (3)
    • (a) The commissioner may adopt rules, after hearings held with notice provided under Section 31A-2-303, to specify the maximum exposure to which an assessable mutual may subject itself.
    • (b) The rules described in Subsection (3)(a) may provide for classifications of insurance and insurers to preserve the solidity of insurers.
  • (4) As used in this section, a "single risk" includes all losses reasonably expected as a result of the same event.
  • (5) A company transacting fidelity or surety insurance may expose itself to a risk or hazard in excess of the amount prescribed in Subsection (2), if the commissioner, after considering all the facts and circumstances, approves the risk.




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