Financial responsibility.

Checkout our iOS App for a better way to browser and research.


  • (1) Every person licensed under this chapter shall maintain an insurance policy or surety bond:
    • (a)
      • (i) while licensed; and
      • (ii) for one year after the person is licensed; and
    • (b) issued:
      • (i) by an authorized insurer;
      • (ii) in an amount specified under Subsection (2); and
      • (iii) on a policy or contract form that is acceptable under Subsection (3).
  • (2)
    • (a) Insurance policies or surety bonds satisfying the requirement of Subsection (1) shall be in a face amount equal to:
      • (i) at least the greater of:
        • (A) 10% of the total funds handled by the administrator; or
        • (B) $5,000; and
      • (ii) may not exceed $500,000.
    • (b) In fixing the policy or bond face amount under Subsection (2)(a), the total funds handled is:
      • (i) the greater of:
        • (A) the premiums received during the previous calendar year; or
        • (B) claims paid through the administrator during the previous calendar year; or
      • (ii) if no funds were handled during the preceding year, the total funds reasonably anticipated to be handled by the administrator during the current calendar year.
    • (c) This section does not prohibit any person dealing with the administrator from requiring, by contract, insurance coverage in amounts greater than the insurance coverage required under this section.
  • (3)
    • (a) Insurance policies or surety bonds issued to satisfy Subsection (1) shall:
      • (i) be on forms approved by the commissioner; and
      • (ii) require the insurer to pay, up to the policy or bond face amount, any judgment:
        • (A) obtained by participants in or beneficiaries of plans administered by the insured licensee; and
        • (B) that arises from the negligence or culpable acts of the licensee or any employee or agent of the licensee in connection with the activities of a third party administrator as defined in Section 31A-1-301.
    • (b) The commissioner may require that policies or bonds issued to satisfy the requirements of this section require the insurer to give the commissioner 20 day prior notice of policy cancellation.
  • (4) The commissioner shall establish annual reporting requirements and forms to monitor compliance with this section.
  • (5) This section may not be construed as limiting any cause of action an insured would otherwise have against the insurer.





Download our app to see the most-to-date content.