2006 Utah Code - 31A-23a-410 — Insurer\'s liability if insured pays premium to a licensee or group policyholder.

     31A-23a-410.   Insurer's liability if insured pays premium to a licensee or group policyholder.
     (1) Subject to Subsections (2) and (5), as between the insurer and the insured, the insurer is considered to have received the premium and is liable to the insured for losses covered by the insurance and for any unearned premiums upon cancellation of the insurance if an insurer, including a surplus lines insurer:
     (a) has assumed a risk; and
     (b) the premium for that insurance has been received by:
     (i) a licensee who placed the insurance;
     (ii) a group policyholder;
     (iii) an employer who deducts part or all of the premium from an employee's wages or salary; or
     (iv) an employer who pays all or part of the premium for an employee.
     (2) Subsection (1) does not apply if:
     (a) the insured pays a licensee, knowing the licensee does not intend to submit the premium to the insurer; or
     (b) the insured has premium withheld from the insured's wages or salary knowing the employer does not intend to submit it to the insurer.
     (3) In the case of an employer who has received the premium by deducting all or part of it from the wages or salaries of the certificate holders, the insurer may terminate its liability by giving certificate holders reasonable notice of coverage termination. The liability of the insurer for the losses covered by the insurance terminates at the later of:
     (a) the last day of the coverage period for which premium has been withheld by the employer; or
     (b) 15 days after the date the insurer mails actual notice to the certificate holder that coverage has terminated, but in the event the insurer fails to provide actual notice as required by this subsection, then the liability of the insurer for losses described in Subsection (1) shall terminate 45 days from the last date for which premium was received. While the insurer shall be liable for losses as herein provided, the provisions of this section apply only to apportion the liability for those losses described and do not operate to extend any insurance contract policy or coverage beyond its date of termination nor alter or amend provisions thereof.
     (4) Despite an employer's collection of premium under Subsection (1), the responsibility of an insurer to continue to cover the losses covered by the insurance to group policy certificate holders terminates upon the effective date of notice from the policyholder that:
     (a) coverage of a similar kind and quality has been obtained from another insurer; or
     (b) the policyholder is electing to voluntarily terminate the certificate holder's coverage and has given the employees notice of the termination.
     (5) If the insurer is obligated to pay any claims pursuant to the provisions of this section, the licensee or employer who received the premium and failed to forward it shall be obligated to the insurer for the entire unpaid premium due under the policy of insurance together with reasonable expenses of suit and reasonable attorney's fees.
     (6) If, under an employee health insurance plan, an employee builds up credit for future coverage because the employee has not used the policy protection, or in some other way, the insurer is obligated to the employee for that future coverage earned while the policy was in full effect.

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Renumbered and Amended by Chapter 298, 2003 General Session