Homeowners Insurance Amendments

16
31A-28-301
31A-28-302
31A-28-303
31A-28-304
31A-28-305
31A-28-306
31A-28-307
31A-28-308
31A-28-309
31A-28-310
63E-1-102
0
Homeowners Insurance Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jennifer Dailey-Provost
Senate Sponsor:
LONG TITLE
General Description:
This bill creates an independent state agency to provide real property insurance coverage
when such coverage is not available from insurers.
Highlighted Provisions:
This bill:
defines terms;
enacts the Access to Insurance Plan Act;
creates the Access to Insurance Plan Association as an independent state agency;
requires each admitted insurer that writes property insurance in the state to participate in
the association as a condition of transacting business;
requires the association to establish and operate a residual market property insurance plan
(fair plan);
authorizes the fair plan to provide residential and commercial property insurance when
coverage is not available in the admitted market;
establishes governance of the association by a board of directors that the governor
appoints;
requires the board to adopt and submit a plan of operation to the insurance commissioner
for approval;
establishes requirements for rates, underwriting standards, coverage limits, and policy
forms under the fair plan;
requires an applicant to demonstrate that at least three admitted insurers declined
coverage before obtaining coverage through the fair plan;
authorizes the association to assess member insurers to fund startup costs and ongoing
financial obligations;
authorizes member insurers to recover certain assessments through policyholder
surcharges;
grants the insurance commissioner oversight, enforcement authority, and rulemaking
authority; and
provides for judicial review of final administrative actions.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
63E-1-102
, as last amended by Laws of Utah 2023, Chapters 16, 431 and 502
ENACTS:
31A-28-301
, Utah Code Annotated 1953
31A-28-302
, Utah Code Annotated 1953
31A-28-303
, Utah Code Annotated 1953
31A-28-304
, Utah Code Annotated 1953
31A-28-305
, Utah Code Annotated 1953
31A-28-306
, Utah Code Annotated 1953
31A-28-307
, Utah Code Annotated 1953
31A-28-308
, Utah Code Annotated 1953
31A-28-309
, Utah Code Annotated 1953
31A-28-310
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
31A-28-301
is enacted to read:
3. Access to Insurance Requirements Plan Act
31A-28-301
. Definitions.
As used in this part:
(1)
"Association" means the Access to Insurance Plan Association created in Section
31A-28-302
.
(2)
"Board" means the board described in Section
31A-28-303
.
(3)
(a)
"Commercial property insurance" means insurance against direct loss to
commercial real property, including buildings and contents, resulting from fire,
extended coverage perils, vandalism, or malicious mischief.
(b)
"Commercial property insurance" does not include commercial automobile insurance
or farm risks.
(4)
"Member insurer" means an admitted insurer that writes property insurance in this state.
(5)
"Plan" means the residual market property insurance plan established under Section
31A-28-304
.
(6)
(a)
"Property insurance" means insurance against direct loss to residential real
property, including buildings and contents, resulting from fire, extended coverage
perils, vandalism, or malicious mischief.
(b)
"Property insurance" does not include automobile insurance or farm risks.
Section 2. Section
31A-28-302
is enacted to read:
31A-28-302
. Access to Insurance Plan Association.
(1)
There is created an independent state agency known as the Access to Insurance Plan
Association.
(2)
Each member insurer shall participate in the association as a condition of the member
insurer's authority to transact property insurance business in this state.
(3)
The association shall:
(a)
operate the plan in accordance with this part;
(b)
establish, offer, and maintain property insurance and commercial property insurance
policies that comply with this part;
(c)
equitably apportion expenses, income, and losses among member insurers in
proportion to each member insurer's direct written premiums for property insurance
in this state; and
(d)
maintain a public website that provides information about the plan and includes a
toll-free telephone number.
(4)
The association may:
(a)
issue policies under the plan;
(b)
purchase reinsurance; and
(c)
transfer risk to the capital markets.
Section 3. Section
31A-28-303
is enacted to read:
31A-28-303
. Board -- Appointment -- Terms -- Vacancies -- Reports.
(1)
The board governs the association and administers the plan.
(2)
The governor shall appoint the board as follows:
(a)
two members representing mutual corporations writing property insurance in this
state;
(b)
two members representing stock corporations writing property insurance in this state;
(c)
one member representing a statewide insurance trade organization that represents
insurers writing property insurance in this state;
(d)
one member representing a statewide insurance trade organization that represents
insurance producers in this state;
(e)
one member licensed as an individual producer under Title 31A, Chapter 23a,
Insurance Marketing - Licensing Producers, Consultants, and Reinsurance
Intermediaries, with the property line of authority; and
(f)
two members representing consumer interests.
(3)
A board member:
(a)
serves a three-year term;
(b)
serves at the pleasure of the governor; and
(c)
may serve no more than four terms.
(4)
At the time of appointment, the governor shall adjust the length of terms to ensure that
the terms of board members are staggered so that approximately one-third of the
members are appointed every year.
(5)
If a vacancy occurs, the governor shall appoint a replacement to serve the remainder of
the unexpired term.
(6)
On or before April 1 of each year, the board shall submit to the commissioner a report
that includes:
(a)
the financial condition of the plan;
(b)
the number of policies in force and available coverages;
(c)
the number and type of claims; and
(d)
an evaluation of solvency and coverage sufficiency.
(7)
The commissioner may require the board to submit quarterly reports or may examine
the affairs of the association if the commissioner determines that such action is
necessary to ensure the continued solvency of the plan.
Section 4. Section
31A-28-304
is enacted to read:
31A-28-304
. Establishment -- Rates.
(1)
The board shall establish the plan.
(2)
The plan shall comply with this part and rules the commissioner makes under this part.
(3)
Rates for the plan:
(a)
may not be excessive, inadequate, or unfairly discriminatory;
(b)
shall be actuarially sound;
(c)
shall reflect investment income; and
(d)
shall reflect reinsurance and risk transfer costs.
(4)
The association shall file rates in accordance with this chapter.
Section 5. Section
31A-28-305
is enacted to read:
31A-28-305
. Plan of operation -- Contents -- Commissioner review.
(1)
The board shall submit a plan of operation to the commissioner for approval.
(2)
The plan of operation shall include:
(a)
lines of coverage;
(b)
coverage limits;
(c)
policy forms;
(d)
covered perils;
(e)
underwriting standards, including mitigation and inspection requirements;
(f)
producer compensation;
(g)
assessment methodology;
(h)
administrative procedures; and
(i)
any other matter necessary to assure access to a plan.
(3)
The plan and amendments become effective upon the commissioner's written approval.
(4)
If the board fails to submit or maintain a compliant plan, the commissioner may adopt
rules necessary to implement this part.
(5)
The commissioner may revoke approval of a plan after notice and opportunity for
hearing and may require revisions.
Section 6. Section
31A-28-306
is enacted to read:
31A-28-306
. Licensed producers -- Required declinations.
(1)
The association may issue a plan policy only through a licensed producer.
(2)
A producer shall submit evidence that at least three admitted insurers declined coverage
for the risk before the association issues a policy.
Section 7. Section
31A-28-307
is enacted to read:
31A-28-307
. Assessments.
(1)
The association may assess member insurers to:
(a)
fund startup costs; and
(b)
meet financial obligations.
(2)
The association shall allocate assessments in proportion to each member insurer's direct
written premiums for property insurance in this state.
(3)
A member insurer may recover an assessment through a surcharge to policyholders.
(4)
An insurer may not increase base premium rates solely due to an assessment.
(5)
An assessment is not premium for purposes of Title 59, Chapter 9, Taxation of
Admitted Insurers, or producer commission calculations.
(6)
The board may defer or abate an assessment if payment would impair a member
insurer's solvency.
(7)
The association shall reallocate a deferred or abated amount among other member
insurers.
(8)
If the commissioner determines that the association is or may become unable to meet
the association's financial obligations, the commissioner shall direct the board to collect
fees in accordance with Subsection
(1)
.
Section 8. Section
31A-28-308
is enacted to read:
31A-28-308
. Enforcement.
(1)
After notice and hearing, the commissioner may suspend or revoke the certificate of
authority of a member insurer that fails to comply with this part or the plan of operation.
(2)
As an alternative to a suspension or revocation, the commissioner may impose an
administrative fine equal to the greater of:
(a)
the unpaid assessment plus interest and enforcement costs; or
(b)
$5,000.
Section 9. Section
31A-28-309
is enacted to read:
31A-28-309
. Judicial review.
A final order issued under this part is subject to judicial review in accordance with Title
63G, Chapter 4, Administrative Procedures Act.
Section 10. Section
31A-28-310
is enacted to read:
31A-28-310
. Rulemaking.
The commissioner may make rules in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act, to implement this part.
Section 11. Section
63E-1-102
is amended to read:
63E-1-102
. Definitions -- List of independent entities.
As used in this title:
(1)
"Authorizing statute" means the statute creating an entity as an independent entity.
(2)
"Committee" means the Retirement and Independent Entities Committee created by
Section
63E-1-201
.
(3)
"Independent corporation" means a corporation incorporated in accordance with
Chapter 2, Independent Corporations Act
.
(4)
(a)
"Independent entity" means an entity having a public purpose relating to the state
or its citizens that is individually created by the state or is given by the state the right
to exist and conduct its affairs as an:
(i)
independent state agency; or
(ii)
independent corporation.
(b)
For purposes of this title, the independent entities are the:
(i)
Utah Beef Council, created by Section
4-21-103
;
(ii)
Utah Dairy Commission
,
created by Section
4-22-103
;
(iii)
Heber Valley Historic Railroad Authority
,
created by Section
63H-4-102
;
(iv)
Utah Housing Corporation
,
created by Section
63H-8-201
;
(v)
Utah State Retirement Office
,
created by Section
49-11-201
;
(vi)
School and Institutional Trust Lands Administration
,
created by Section
53C-1-201
;
(vii)
School and Institutional Trust Fund Office
,
created by Section
53D-1-201
;
(viii)
Utah Communications Authority
,
created by Section
63H-7a-201
;
(ix)
Utah Capital Investment Corporation
,
created by Section
63N-6-301
;
(x)
Military Installation Development Authority
,
created by Section
63H-1-201
;
and
(xi)
Public Service Commission of Utah
,
created by Section
54-1-1
.
; and
(xii)
Access to Insurance Plan Association, created by Section
31A-28-302
.
(c)
Notwithstanding this Subsection
(4)
, "independent entity" does not include:
(i)
an institution within the state system of higher education;
(ii)
a city, county, or town;
(iii)
a local school district;
(iv)
a special district under
Title 17B, Limited Purpose Local Government Entities -
Special Districts
; or
(v)
a special service district under
Title 17D, Chapter 1, Special Service District Act
.
(5)
"Independent state agency" means an entity that is created by the state, but is
independent of the governor's direct supervisory control.
(6)
"Money held in trust" means money maintained for the benefit of:
(a)
one or more private individuals, including public employees;
(b)
one or more public or private entities; or
(c)
the owners of a quasi-public corporation.
(7)
"Public corporation" means an artificial person, public in ownership, individually
created by the state as a body politic and corporate for the administration of a public
purpose relating to the state or its citizens.
(8)
"Quasi-public corporation" means an artificial person, private in ownership, individually
created as a corporation by the state, which has accepted from the state the grant of a
franchise or contract involving the performance of a public purpose relating to the state
or its citizens.
Section 12.
Effective Date.
This bill takes effect on
May 6, 2026
.
2-13-26 9:57 AM