Utah Code § 31A-16b-101 Title.
31A-16b-101. Title.
This chapter is known as the "Corporate Governance Annual Disclosure Act."
Enacted by Chapter 193, 2019 General Session
Corporate Governance Annual Disclosure Act
Utah Code tit. 31A, ch. 31A-16b
in effectUtah Code § 31A-16b-102 Administration and scope.
31A-16b-102. Administration and scope.
(1) The commissioner is solely responsible for the administration and enforcement of the provisions of this chapter.
(2) This chapter does not:
(a) prescribe or impose corporate governance standards or internal procedures beyond what is required under applicable state corporate law; or
(b) limit the commissioner's authority, or the rights or obligations of third parties, under Chapter 2, Administration of the Insurance Laws.
(3) The requirements of this chapter apply to each insurer domiciled in the state.
Enacted by Chapter 193, 2019 General Session
Utah Code § 31A-16b-103 Disclosure requirement.
31A-16b-103. Disclosure requirement.
(1) An insurer, or the insurance group of which the insurer is a member, shall on or before June 1 of each year submit to the commissioner a corporate governance annual disclosure that contains the information required under Section 31A-16b-105.
(2) Notwithstanding a request from the commissioner described in Subsection (4), if an insurer is a member of an insurance group, the insurer shall submit the report required under this section to the commissioner of the lead state for the insurance group in accordance with:
(a) the laws of the lead state; and
(b) the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC.
(3) The corporate governance annual disclosure described in Subsection (1) shall include a signature:
(a) of the insurer's or insurance group's chief executive officer or corporate secretary; and
(b) attesting to the best of the signatory's belief and knowledge that:
(i) the insurer or insurance group has implemented the corporate governance practices; and
(ii) a copy of the disclosure has been provided to the insurer's or insurance group's board of directors or the appropriate committee thereof.
(4) An insurer not required to submit a corporate governance annual disclosure under this section shall submit a corporate governance annual disclosure to the commissioner upon the commissioner's request.
(5)
(a) For purposes of completing a corporate governance annual disclosure, an insurer or insurance group may provide information regarding corporate governance at one of the following levels:
(i) at the ultimate controlling parent level;
(ii) at an intermediate holding company level; or
(iii) at the individual legal entity level.
(b) An insurer or insurance group shall consider making each corporate governance annual disclosure at the level at which the insurer or insurance group:
(i) determines the insurer or insurance group's risk appetite;
(ii)
(A) collectively oversees the earnings, capital, liquidity, operations, and reputation of the insurer; and
(B) coordinates and exercises the supervision of earnings, capital, liquidity, operations, and reputation of the insurer; or
(iii) places legal liability for failure of general corporate governance duties.
(6) If an insurer or insurance group chooses a level of reporting described in Subsection (5), it shall indicate:
(a) which of the three levels the insurer or insurance group chose; and
(b) explain any subsequent change in the level of reporting.
(7) An insurer may choose not to include certain information in a corporate governance annual disclosure, if:
(a) the information is substantially similar to information included in another document submitted to the commissioner, including a proxy statement filed in conjunction with Section 31A-16-105 or another state or federal filing provided to the department; and
(b) the insurer cross references the document described in Subsection (7)(a) in the corporate governance annual disclosure.
(8) A review of a corporate governance annual disclosure or any additional request for information related to a corporate governance annual disclosure shall be made through the lead state as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC.
Enacted by Chapter 193, 2019 General Session
Utah Code § 31A-16b-104 Rulemaking.
31A-16b-104. Rulemaking.
(1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commissioner may make rules to implement and administer this chapter.
(2) The commissioner may issue orders as is necessary to carry out this chapter.
Enacted by Chapter 193, 2019 General Session
Utah Code § 31A-16b-105 Contents of corporate governance annual disclosure.
31A-16b-105. Contents of corporate governance annual disclosure.
(1)
(a) A corporate governance annual disclosure shall include information sufficient to provide the commissioner a clear understanding of the insurer's or insurance group's corporate governance structure, policies, and practices.
(b) An insurer or insurance group has discretion to determine the information the insurer or insurance group includes in a corporate governance annual disclosure, provided the information complies with Subsection (1)(a).
(2) The commissioner may request additional information that the commissioner determines material and necessary to provide the commissioner with a clear understanding of the insurer's or insurance group's:
(a) corporate governance policies;
(b) reporting and information systems; or
(c) controls implementing the items described in Subsection (2)(a) or (b).
(3) An insurer or insurance group shall maintain and make available upon request of the commissioner:
(a) documentation; and
(b) supporting information.
Enacted by Chapter 193, 2019 General Session
Utah Code § 31A-16b-106 Confidentiality.
31A-16b-106. Confidentiality.
(1) A document, material, or other information, including a corporate governance annual disclosure, is considered proprietary and to contain a trade secret if the document, material, or other information is:
(a) in the control or possession of the department; and
(b) obtained by, created by, or disclosed to the commissioner or any other person in accordance with this chapter.
(2) A document, material, or other information described in Subsection (1) is:
(a) confidential and privileged;
(b) classified as a protected record under Title 63G, Chapter 2, Government Records Access and Management Act;
(c) not subject to:
(i) subpoena; or
(ii) discovery; and
(d) not admissible as evidence in any private civil action.
(3)
(a) The commissioner may use a document, material, or other information described in Subsection (1) in the furtherance of a regulatory or legal action brought as a part of the commissioner's duties.
(b) Except as described in Subsection (3)(a), the commissioner may not make a document, material, or other information described in Subsection (1) public without the prior written consent of the insurer or insurance group.
(4) Nothing in this section requires written consent of the insurer or insurance group before the commissioner shares or receives, in accordance with Subsection (6), a document, material, or other information described in Subsection (1) to assist in the performance of the commissioner's duties.
(5) The following may not testify in any private civil action regarding a document, material, or other information described in Subsection (1):
(a) the commissioner; or
(b) a person:
(i) who receives the document, material, or other information, through examination or otherwise, while acting under the authority of the commissioner; or
(ii) with whom the document, material, or other information is shared in accordance with this chapter.
(6) To carry out the commissioner's duties, the commissioner may:
(a) upon request, share a document, material, or other information described in Subsection (1) with:
(i) a state, federal, or international financial regulatory agency, including a member of a supervisory college as defined in Section 31A-16-108.5; or
(ii) the NAIC or a third-party consultant retained in accordance with Section 31A-16b-107, if the recipient:
(A) agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information; and
(B) verifies in writing the legal authority to maintain confidentiality; or
(b) receive documents, materials, or other information related to a corporate governance annual disclosure, including:
(i) otherwise confidential and privileged documents, materials, or other information; and
(ii) proprietary and trade secret information or documents from:
(A) a regulatory official of a state, federal, or international financial regulatory agency, including a member of a supervisory college as defined in Section 31A-16-108.5; or
(B) the NAIC.
(7) A written agreement governing the sharing of a document, material, or other information described in Subsection (1) with the NAIC or a third-party consultant shall contain the following:
(a) specific procedures and protocols for maintaining the confidentiality and privileged status of the document, material, or other information in accordance with this chapter;
(b) procedures and protocols ensuring the NAIC shares information only with a state regulator from a state in which the insurance group has a domiciled insurer;
(c) verification that the recipient has legal authority to maintain the confidentiality and privileged status of the document, material, or other information;
(d) a provision specifying that:
(i) ownership of the document, material, or other information remains with the department; and
(ii) the NAIC's or third-party consultant's use of the document, material, or other information shared with the NAIC or third-party consultant is subject to the direction of the commissioner;
(e) a provision prohibiting the NAIC or third-party consultant from storing the document, material, or other information in a permanent database after the underlying analysis is complete;
(f) a provision requiring the NAIC or third-party consultant to provide prompt notice to the commissioner and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the document, material, or other information;
(g) a provision requiring the NAIC or third-party consultant consent to the insurer or insurance group intervening in any judicial or administrative action in which the NAIC or third-party consultant may be required to disclose the document, material, or other information; and
(h) a provision requiring the written consent of the insurer or insurance group before making public the document, material, or other information.
(8)
(a) The commissioner shall maintain as confidential or privileged any documents, materials, or other information received with notice or with the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information.
(b) The NAIC and a third-party consultant are subject to the same confidentiality standards and requirements as the commissioner.
(9) The sharing of a document, material, or other information described in Subsection (1) by the commissioner in accordance with this chapter is not a delegation of regulatory authority or rulemaking.
(10) Disclosing or sharing a document, material, or other information described in Subsection (1) in accordance with this chapter does not waive any privilege or claim of confidentiality, propriety, or trade secret related to the document, material, or other information.
Enacted by Chapter 193, 2019 General Session
Utah Code § 31A-16b-107 Third-party consultants.
31A-16b-107. Third-party consultants.
(1) The commissioner may retain a third-party consultant, including an attorney, actuary, accountant, or other expert not otherwise a part of the commissioner's staff:
(a) at the insurer's or insurance group's expense; and
(b) as is reasonably necessary to assist the commissioner in reviewing the insurer's or insurance group's:
(i) corporate governance annual disclosure and related information; or
(ii) compliance with this chapter.
(2) A person the commissioner retains under Subsection (1):
(a) is under the direction and control of the commissioner; and
(b) shall act in a purely advisory capacity.
(3) As part of the retention process, a third-party consultant shall verify to the commissioner, with notice to the insurer or insurance group, that the third-party consultant:
(a) is free of a conflict of interest; and
(b) has internal procedures in place to:
(i) monitor compliance with Subsection (3)(a); and
(ii) comply with the confidentiality standards and requirements of this chapter.
Enacted by Chapter 193, 2019 General Session
Utah Code § 31A-16b-108 Penalties.
31A-16b-108. Penalties.
(1) An insurer or insurance group that, without just cause, fails to timely file a corporate governance annual disclosure as required in this chapter shall, after notice and hearing, pay a penalty of $10,000 for each day's delay, up to $300,000.
(2) Any penalty recovered by the commissioner under this section shall be deposited into the General Fund.
(3) The commissioner may reduce a penalty under this section if the insurer or insurance group demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer.
Enacted by Chapter 193, 2019 General Session
Source: Utah Office of Legislative Research and General Counsel (le.utah.gov)URL: https://le.utah.gov/xcode/Title31A/Chapter16B/31A-16b.html?v=C31A-16b_2019051420200101Fetched: 10/26/2026