Utah Code § 31A-23a-501 — Utah Code / Title 31A / Chapter 31A-23a / § 31A-23a-501
§ 31A-23a-501. Licensee compensation.
Status: in_force

(1) As used in this section: (a) "Commission compensation" includes funds paid to or credited for the benefit of a licensee from: (i) commission amounts deducted from insurance premiums on insurance sold by or placed through the licensee; (ii) commission amounts received from an insurer or another licensee as a result of the sale or placement of insurance; or (iii) overrides, bonuses, contingent bonuses, or contingent commissions received from an insurer or another licensee as a result of the sale or placement of insurance. (b) (i) "Compensation from an insurer or third party administrator" means commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options, gifts, prizes, or any other form of valuable consideration: (A) whether payable in accordance with a written agreement; and (B) received from: (I) an insurer; or (II) a third party to the transaction for the sale or placement of insurance. (ii) "Compensation from an insurer or third party administrator" does not mean compensation from a customer that is: (A) a fee or pass-through costs as provided in Subsection (1)(e); or (B) a fee or amount collected by or paid to the producer that does not exceed an amount the commissioner establishes by administrative rule. (c) (i) "Customer" means: (A) the person signing the application or submission for insurance; or (B) the authorized representative of the insured actually negotiating the placement of insurance with the producer. (ii) "Customer" does not mean a person who is a participant or beneficiary of: (A) an employee benefit plan; or (B) a group or blanket insurance policy or group annuity contract the producer or affiliate sells, solicits, or negotiates. (d) (i) "Noncommission compensation" includes all funds paid to or credited for the benefit of a licensee other than commission compensation. (ii) "Noncommission compensation" does not include charges for pass-through costs incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy. (e) "Pass-through costs" include: (i) costs for copying documents to be submitted to the insurer; and (ii) bank costs for processing cash or credit card payments. (2) (a) Except as provided in Subsection (3), a licensee may receive from an insured or from a person purchasing an insurance policy, noncommission compensation. (b) Noncommission compensation shall be: (i) limited to actual or reasonable expenses incurred for services; and (ii) uniformly applied to all insureds or prospective insureds in a class or classes of business or for a specific service or services. (c) The following additional noncommission compensation is authorized: (i) compensation a surety bond's principal debtor pays, under procedures approved by a rule or order of the commissioner, to a producer of a compensation corporate surety for an extra service; (ii) compensation an insurance producer receives for services performed for an insured in connection with a claim adjustment, if the producer: (A) does not receive and is not promised compensation for aiding in the claim adjustment before the claim occurs; and (B) is also licensed as a public adjuster in accordance with Section 31A-26-203; (iii) compensation a consultant receives as a consulting fee, if the consultant complies with the requirements under Section 31A-23a-401; and (iv) a compensation arrangement that the commissioner approves after finding that the arrangement: (A) does not violate Section 31A-23a-401; and (B) is not harmful to the public. (d) All accounting records relating to noncommission compensation shall be maintained in a manner that facilitates an audit. (3) (a) A surplus lines producer may receive noncommission compensation when acting as a producer for the insured in a surplus lines transaction, if: (i) the producer and the insured have agreed on the producer's noncommission compensation; and (ii) the producer has disclosed to the insured the existence and source of any other compensation that accrues to the producer as a result of the transaction. (b) The disclosure required by this Subsection (3) shall: (i) include the signature of the insured or prospective insured acknowledging the noncommission compensation; (ii) clearly specify: (A) the amount of any known noncommission compensation; (B) the type and amount, if known, of any potential and contingent noncommission compensation; and (C) the existence and source of any other compensation; and (iii) be provided to the insured or prospective insured before the performance of the service. (4) This section does not alter the right of any licensee to recover from an insured the amount of any premium due for insurance effected by or through that licensee or to charge a reasonable rate of interest upon past-due accounts. (5) This section does not apply to bail bond producers or bail enforcement agents as defined in Section 31A-35-102. (6) A licensee may not receive noncommission compensation from an insurer, insured, or enrollee for providing a service or engaging in an act that is required to be provided or performed in order to receive commission compensation, except for the surplus lines transactions that do not receive commissions.